Yunnan Jinggu Forestry sells stake in wood company to Chow Tai Fook Investment

Yunnan Jinggu Forestry Co., Ltd. announced the sale of a 51% stake in Huiyin Wood Industry Co., Ltd. to its controlling shareholder, Chow Tai Fook Investment Co., Ltd., for 13,336.60m yuan. The transaction, classified as a material asset reorganization, aims to divest a non-performing asset and improve the company’s financial health. The board of directors approved the transaction on November 14, 2025, and Chow Tai Fook Investment approved it on November 12, 2025. The independent financial advisor, Huachuang Securities, confirmed the transaction aligns with relevant regulations and will enhance the company’s sustained operational capability.

Huiyin Wood Industry, engaged in artificial board production, has faced significant losses and litigation risks, leading to a halt in production by August 2025. The company’s financial statements show net losses of 25,950.38m yuan in January-July 2025 and an accumulated estimated liability of 9,844.05m yuan for lending disputes. The asset sale is expected to reduce Yunnan Jinggu Forestry's asset-liability ratio and improve its financial performance.

Post-transaction, Yunnan Jinggu Forestry's net profit attributable to parent company shareholders is projected to increase to -1,307.89m yuan for January-July 2025, up from -20,592.11m yuan. The company plans to pivot to computing power services, leveraging a 51% equity gift from Chow Tai Fook Investment in Bodda Digital Technology. This strategic shift aims to secure new growth opportunities and mitigate risks associated with its traditional businesses.