Huafa subsidiary's Shenzhen acquisition faces repurchase uncertainty

Zhuhai Huafa, a wholly-owned subsidiary of Zhuhai Huafa Industrial Co., Ltd., acquired a 51% stake in Shenzhen Ronghua Real Estate Investment Co., Ltd. from Sunac Cultural Tourism Development Group Co., Ltd. in January 2023. Under the acquisition agreement, Sunac Cultural Tourism had the right to repurchase the equity and related debt by November 23, 2025.

On November 21, 2025, Zhuhai Huafa received a notification from Sunac Cultural Tourism indicating its intention to exercise the repurchase option. However, Sunac proposed renegotiating key terms such as the repurchase method, timing, and price, citing current market conditions.

The agreement stipulates that for the repurchase to be finalized, Sunac Cultural Tourism must, within 30 working days of confirming the repurchase, either secure written consent for the equity transfer from financing institutions or provide loans to the project company to settle corresponding financing debts. Full payment of the repurchase consideration is also required. Failure to meet these conditions by the agreed deadline would void the repurchase. The company noted that the details of the repurchase and its ultimate implementation remain uncertain and will be disclosed in accordance with regulatory requirements.