Songyang to sell subsidiary, suspend operations amid losses

Guangdong Songyang Recycle Resources announced plans to publicly list 100% of the equity of its wholly-owned subsidiary, Shantou Songyang New Material Special Paper Co., Ltd., on the Guangdong Equity Exchange. The proposed initial listing price for the equity is 100 million yuan. An asset valuation report, as of June 30, 2025, assessed the total equity value of Shantou Songyang New Material Special Paper Co., Ltd. at 92.5647 million yuan. The decision to sell follows sustained losses and aims to reduce operating costs, with operations at the subsidiary being suspended.

The company's board approved the equity transfer at its 25th meeting on November 14, 2025, and the matter awaits shareholder approval at an extraordinary general meeting on December 2, 2025. The subsidiary's total assets as of June 30, 2025, were 407.4689 million yuan, with total liabilities of 306.1603 million yuan and owner's equity of 101.3086 million yuan. The valuation resulted in a total asset appraisal of 398.7249 million yuan, representing a decrease of 8.744 million yuan. Owner's equity was appraised at 92.5647 million yuan, a decrease of 8.744 million yuan.

Shantou Songyang New Material Special Paper Co., Ltd. has pledged its immovable property as collateral for a loan of 67.40 million yuan from Guangdong Chenghai Rural Commercial Bank Co., Ltd. The loan period is from January 26, 2025, to January 21, 2026. Guangdong Songyang Recycle Resources will provide a guarantee and commits to releasing this collateral before the equity transfer date. Additionally, the subsidiary has outstanding payables of 148 million yuan, which the buyer will assume.