Zhitong Finance App learned that on the evening of December 19, Xiaosong Co., Ltd. (002723.SZ) issued an announcement. Shenzhen Huaxin Chuangli Technology Industrial Development Co., Ltd. (hereinafter referred to as “Huaxin Chuangli”), the controlling shareholder of the company, had purchased 953,000 shares through self-financing on December 18, 2023 through bulk transactions. The revenue generated from this share repurchase of 733,930 yuan has been paid to listed companies.

Earlier, on December 15, Xiaosong Co., Ltd. announced that Huaxin Chuangli's actions to reduce its holdings of 953,000 shares on September 4, 2023 because Huaxin Chuangli fulfilled its debt repayment obligations, violated the relevant requirements of the China Securities Regulatory Commission's “Further Regulating Share Reduction Behavior”. Huahin Chuangli apologized for the mistake in reducing its holdings, promised to buy back the shares in violation of the regulations mentioned above as soon as possible, and return all proceeds to the listed company. Within only 2 trading days of the apology and commitment announcement, Huaxin Chuangli fulfilled its promise to repurchase shares and actively and quickly eliminate the impact of the irregularities through practical actions. This shows the attitude of Xiaosong Co., Ltd. and its controlling shareholders to maintain the “new regulations on reducing holdings” and their determination to protect the interests of the company and all shareholders.

The Zhitong Finance app learned that according to public information, shares of Xiaosong shares held by Huaxin Chuangli were judicially frozen in 2019 due to a debt dispute. In June 2022, all of them were lifted from the judicial freeze. Earlier media reports said that all of Huahin Chuangli's shares were unfrozen as a result of many rounds of patient communication and negotiation.

According to people close to Xiaosong Co., Ltd., Huaxin Chuangli has been actively working to resolve its pledged financing debt problem. Since June 2022, as can be seen from several announcements issued by Xiaosong Co., Ltd. to reduce the holding of shares by the controlling shareholder, every time the holdings have been reduced to repay its debts, and the funds reduced have not been used for other purposes. It can be seen that the purpose of every reduction in holdings is to prevent control from being auctioned off by the courts. A positive signal was also revealed in the company announcement on May 30 of this year: “Huahin Chuangli's holdings reduction capital will be used entirely to repay its pledged financing debt. After this repayment, the size of its debt will be drastically reduced, and the high percentage pledge issue will be further resolved.” It can be seen that Huahin Chuangli has made good progress in resolving the debt problem.

Market participants have analyzed that stable control will also have a positive impact on the financing capacity and business development of listed companies, guaranteeing the stable and continuous development of the company to a certain extent, thus protecting the interests of investors.

Xiaosong Co., Ltd. focuses on the R&D and manufacturing of small household appliances. Since Huaxin Chuangli, the controlling shareholder joined the company in 2018, Xiaosong Co., Ltd. has continuously transformed and reformed its main business, actively sought change, and used the listed platform to integrate high-quality resources and consolidate business development capabilities. At present, Xiaosong Co., Ltd. has formed a full industry chain manufacturing capability with “full coverage, flexibility and fast response”. It has provided products and services to 300 million users around the world, and its business covers more than 120 countries and regions around the world. The company is actively expanding the health appliance business and has successively introduced a series of healthy lifestyle appliances to the market, such as air purifiers, desktop air conditioning fans, dehumidifiers, and pet appliances. Among them, the sales volume of air purifier products has increased year by year, with a year-on-year increase of 66.63% in 2022. At the same time, the company dug deep into the health lighting circuit. During the Double Eleven period in 2023, full-spectrum floor-to-ceiling eye protection products won the “4000+ Price New Domestic Full-Spectrum Vertical Eye Protection Lamp” TOP1 in the Tmall brand.

Furthermore, Xiaosong Co., Ltd. continues to promote the entire industry chain layout of the new e-cigarette business with high standards and high quality. Currently, the e-cigarette business is being developed in North America, Europe, Southeast Asia and other regions, and the scale advantage of overseas markets is further increasing, opening up room for high growth for the company's subsequent performance development.