XJ International disposes of vocational college amid operational challenges

XJ International Holdings Co., Ltd. has issued a supplemental announcement regarding the disposal of its vocational college in Guilin, Guangxi. The company, which held an 80% founder's equity interest, used a cost approach for valuation due to the college's historical loss-making position, lack of consistent earnings, and difficulty finding comparable market transactions.

The college faces significant challenges, including a land area of 100 mu that does not meet minimum requirements for higher education institutions in China. Local authorities have mandated compliance by the end of 2025, requiring the college to address a shortfall with an outstanding RMB40 million payable. Additionally, the college has an outstanding bank loan of approximately RMB52 million.

The board concluded that an income-based valuation was unsuitable and an asset-based approach would not properly value critical intangible assets like the operating license and enrollment quotas. The cost approach, primarily referencing the company's historical investment of approximately RMB15 million, was chosen to expedite the transaction and partially recover invested funds. The board deems the disposal consideration fair and reasonable, serving the best interests of the company and its shareholders.