Recently, Shunho Stock has made multiple optimization adjustments to the layout of industrial hemp industry chain from the point of its own development need, and further upgraded the cooperation in relevant business related to supercritical CO₂ extraction technology equipment and electronic bio-health to achieve effective synergy with the Company's existing research and development achievements and businesses by making full use of several parties’ advantages in their resources.
Acquisition of Shanghai Hongchi will Improve the Industrial Hemp Industry Chain
Shunho Stock has signed an Agreement on Capital Increase and Share Expansion of Shanghai Hongchi Asset Management Co., Ltd., by which it will contribute RMB31 million to make capital increase to Shanghai Hongchi. After the completion of the transaction, Shunho Stock will hold 96.88% of the equity in Shanghai Hongchi.
On May 20, 2019, Shanghai Hongchi has formally signed a Capital Increase Agreement with Guizhou Aerospace Wujiang Electromechanical Equipment Co., Ltd. (hereinafter referred to as “Aerospace Wujiang”). After the capital contribution, Shanghai Hongchi has held 10.48% of the equity in Aerospace Wujiang.
It is known that the supercritical fluid equipment technology of Aerospace Wujiang is at the industry leading level at home and abroad. At present, the technology is widely used in the extraction of industrial hemp. The investment will be helpful in improving the company's industrial hemp industry chain and enhancing its comprehensive development competitiveness.
Establish Yunnan Maxin Exploration Electronic Bio-health Products
In addition, Shanghai Luxin, Yunnan Luxin, holding subsidiaries of Shunho Stock, and Yunnan Xike have also signed a Cooperation Agreement, by which they are planning to contribute RMB22.5 million, RMB4.5 million and RMB3 million respectively to jointly establish Yunnan Maxin Biotechnology Co., Ltd. The scope of business for the joint venture company to be established includes research and development, and production of electronic products; as well as research and development, processing, and sales of electronic bio-health products (including solid spices derived from base ingredients of industrial hemp flowers and leaves, liquid electronic atomized liquids, suction-type dose administration, etc.) . After the completion of the transaction, Shunho Stock will indirectly hold 90% of the equity in the joint venture company.
It is reported that the shareholders of Yunnan Xike are Shanghai Green Vaper and Yunnan Henggang Technology Co., Ltd. At present, Yunnan Xike has had a perfect independent intellectual property rights system for new-generation low-temperature heating non-combustion products, applied for the domestic and international patents for many low-temperature heating non-combustion products and formed production differentiation for low-temperature heating non-combustion products in the current mainstream market. The disruptive new-generation low-temperature heating non-combustion atomization patent originally invented by Xike Biotech and Green Vaper Electronics independently are the combination of two strong companies, thus forming an effective technical barrier and fosse under the situation that the State is increasing its strict protection to intellectual property.
Through the cooperation, both parties can give full play to their respective resource advantages and jointly explore market opportunities for base materials extracted from industrial hemp flowers in electronic bio-health products.
