China Merchants Property to divest Hengyang Zhonghang stake

China Merchants Property Operation & Service (SZSE:001914) plans to sell its 60% equity in Hengyang Zhonghang Real Estate Co., Ltd. through a public listing on the Beijing Equity Exchange. The divestment aims to revitalize historical assets and fulfill commitments related to real estate project disposal.

The transferee will pay the equity transfer price and assume responsibility for clearing Hengyang Zhonghang's shareholder loans and interest owed to China Merchants Property. As of August 31, 2025, the outstanding balance of shareholder loans and interest is CNY 951,101,952.09. China Merchants Property proposes to reduce the interest by CNY 226,853,300.44, leaving a debt of CNY 724,248,651.65.

Additionally, Hengyang Zhonghang's outstanding receivable for construction and overdue interest with the Hengyang Management Committee amounts to CNY 240,593,179.13. After negotiations, a reduction of CNY 184,619,676.74 is proposed, leaving a recoverable amount of CNY 55,973,502.39. These debt adjustments are contingent on the successful completion of the equity transfer. The company anticipates a one-time reduction of approximately CNY 264 million in its 2025 net profit attributable to shareholders.

The board of directors approved the equity transfer and debt revaluation on November 11, 2025. Hengyang High-tech Holding Group Co., Ltd., which holds 40% of Hengyang Zhonghang through its subsidiary, Hengyang Baisha Investment and Development Co., Ltd., intends to bid for the 60% stake. The transaction is set to finalize upon the completion of the industrial and commercial change registration for the equity transfer.