According to the Zhitong Finance App, Huali University Group (01756) announced that on December 7, 2021, Zhang Zhifan, brother of Zhang Zhifeng, the chairman of the board of directors, executive director and controlling shareholder of the company, agreed to subscribe for 0.001% of the registered capital of Guangzhou Huali Investment Co., Ltd. by injecting RMB 4,000 according to the ratio of the registered capital of Huali Investment immediately prior to the subscription. After the subscription was completed on December 7, 2021, Huali Investment was owned by Zhang Zhifeng and Zhang Zhifan respectively 99.999% (corresponding registered capital of RMB 400 million) and 0.001% (corresponding registered capital of RMB 4,000).

Huali Investment is a one-person limited liability company. According to the “Company Law of the People's Republic of China”, a one-person limited liability company cannot invest in establishing a new one-person limited liability company, and Huali Investment needs to establish different subsidiaries in order to facilitate business. Therefore, Huali Investment needs to increase the number of shareholders to achieve this goal. Huali Investment is the school organizer for the group's various Chinese operating entities. The Chinese operating entities are Guangzhou Huali University, Guangdong Huali Technician College, and Guangzhou Huali Science and Technology Vocational College. Huali Investment and China's operating entities are controlled by the company through structured contracts, and their financial results have been consolidated into the Group's consolidated financial statements.