On July 22nd, Hundsun Technologies Inc. (SH:600570) released a indicative notice on the proposed agreement to acquire 5% shareholding in Shenzhen Ysstech Info-tech. Specifically, on July 22nd, 2024, Hundsun Technologies Inc. signed the "Share Transfer Agreement" with the relevant shareholders of Ysstech Info-tech, acquiring a total of 37.56 million shares of Ysstech Info-tech, accounting for 5.0008% of the total share capital of Ysstech Info-tech.

The transfer price of the agreement is 4.80 yuan/share, with a total amount of RMB 0.18 billion. Hundsun Technologies Inc. stated in the announcement that the stake purchase is based on the recognition of the investment value and management team of Ysstech Info-tech, and is being held for long-term investment purposes.

It is understood that previously, Hundsun Technologies Inc. and its concerted action person Shanghai Tongyi Investment Management Co., Ltd. managed a total of 59.868 million shares of Ysstech Info-tech, accounting for 7.97% of the total share capital of Ysstech Info-tech. The above four private equity funds are all fully-owned by Hundsun Technologies Inc. through a single fund trust plan.

According to the announcement, the transferor of this agreement is five natural persons, Tang Qiu, Yan Jianhong, Yan Jianbing, Huang Yi, and Zhou Yunshan, transferring shares in proportions of 3.15%, 0.95%, 0.27%, 0.23%, and 0.4%, respectively. Among them, Tang Qiu and Yan Jianhong are the controlling shareholders and actual controllers of Ysstech Info-tech, and Yan Jianbing is the concerted action person of the actual controller.

In addition, major shareholder Tang Qiu also serves as the Chairman of Ysstech Info-tech. In December last year, Tang Qiu was detained by the Liaoning Yingkou discipline inspection commission to assist investigation in related matters. He was released from detention in May this year and is now able to perform his duties as the legal representative and Chairman of the company normally. After the equity change, Tang Qiu, Yan Jianhong, and their concerted action person Yan Jianbing collectively hold 0.107 billion shares of the company, accounting for 14.31% of the company's total share capital; Hundsun Technologies Inc. and its concerted action persons hold a total of 97.428 million shares of the company, accounting for 12.9718% of the company's total share capital.

After the completion of this agreement transfer, Hundsun Technologies Inc. and its concerted parties will hold a total of 97.428 million shares of Shenzhen Ysstech Info-Tech, accounting for 12.97% of the total share capital of Ysstech Info-Tech.

It is worth mentioning that Hundsun Technologies Inc. has also promised that within six months after the transfer and registration of ownership is completed, the company will not reduce its shareholding in the listed company shares acquired through this agreement. Hundsun Technologies Inc. and its concerted action persons have no plans to reduce their shareholding in Ysstech Info-tech over the next 12 months, nor do they plan to increase their shareholding in Ysstech Info-tech. They will recommend no more than two non-independent directors and will not seek control.

According to reports, both Hundsun Technologies Inc. and Ysstech Info-tech are IT software development companies focusing on the financial industry. Hundsun Technologies Inc. was founded in 1995 and listed on the Shanghai Stock Exchange Main Board in 2003. It is committed to providing overall solutions and services for securities, futures, funds, reits, insurance, banks, exchanges, private equity and other institutions. As of the end of the first quarter of 2024, the total assets of Hundsun Technologies Inc. were RMB 13.201 billion, a year-on-year decrease of 8.03%.

Ysstech Info-tech was established in 1998 and listed on the Shenzhen Stock Exchange Growth Enterprise Board in 2014. The company focuses on research, development, and services of IT systems in the financial industry. Its core business is the application software and services for the asset management and custody business systems of financial institutions. As of the end of the first quarter of 2024, the total assets of Ysstech Info-tech were RMB 3.174 billion, a year-on-year decrease of 4.29%; operating income was RMB 0.242 billion, a year-on-year decrease of 10.86%; and net income attributable to shareholders was -88.709 million yuan, a year-on-year increase of 1.86%.

In 2024, both companies' performance was under pressure. In the first quarter of 2024, Hundsun Technologies Inc. had a net loss of RMB 36.14 million, a year-on-year decrease of 116.28%; the non-GAAP net profit was RMB 21.47 million, a year-on-year decrease of 71%. According to the recently disclosed 2024 mid-year performance forecast, it is expected that in H1 2024, Hundsun Technologies Inc. will achieve a net profit of approximately RMB 35.377 million, a year-on-year decrease of 92.07%, and a non-GAAP net profit of approximately RMB 0.141 billion, a year-on-year decrease of 46.76%. It is estimated that the impact amount of non-recurring loss on the net profit of the company in the first half of 2024 will be approximately RMB 0.106 billion, and the reason is that "the fair value change income of Ysstech Info-tech has decreased significantly compared with the same period last year".

Hundsun Technologies Inc. and Ysstech Info-tech are both IT software development companies focusing on the financial industry. Hundsun Technologies Inc. was founded in 1995 and listed on the Shanghai Stock Exchange Main Board in 2003. It is committed to providing overall solutions and services for securities, futures, funds, reits, insurance, banks, exchanges, private equity and other institutions. As of the end of the first quarter of 2024, the total assets of Hundsun Technologies Inc. were RMB 13.201 billion, a year-on-year decrease of 8.03%. Ysstech Info-tech was established in 1998 and listed on the Shenzhen Stock Exchange Growth Enterprise Board in 2014. The company focuses on research, development, and services of IT systems in the financial industry. Its core business is the application software and services for the asset management and custody business systems of financial institutions. As of the end of the first quarter of 2024, the total assets of Ysstech Info-tech were RMB 3.174 billion, a year-on-year decrease of 4.29%; operating income was RMB 0.242 billion, a year-on-year decrease of 10.86%; and net income attributable to shareholders was -88.709 million yuan, a year-on-year increase of 1.86%.

In 2024, both companies' performance was under pressure. In the first quarter of 2024, Hundsun Technologies Inc. had a net loss of RMB 36.14 million, a year-on-year decrease of 116.28%; the non-GAAP net profit was RMB 21.47 million, a year-on-year decrease of 71%. According to the recently disclosed 2024 mid-year performance forecast, it is expected that in H1 2024, Hundsun Technologies Inc. will achieve a net profit of approximately RMB 35.377 million, a year-on-year decrease of 92.07%, and a non-GAAP net profit of approximately RMB 0.141 billion, a year-on-year decrease of 46.76%. It is estimated that the impact amount of non-recurring loss on the net profit of the company in the first half of 2024 will be approximately RMB 0.106 billion, and the reason is that "the fair value change income of Ysstech Info-tech has decreased significantly compared with the same period last year".

In 2024, both companies' performance was under pressure. In the first quarter of 2024, Hundsun Technologies Inc. had a net loss of RMB 36.14 million, a year-on-year decrease of 116.28%; the non-GAAP net profit was RMB 21.47 million, a year-on-year decrease of 71%. According to the recently disclosed 2024 mid-year performance forecast, it is expected that in H1 2024, Hundsun Technologies Inc. will achieve a net profit of approximately RMB 35.377 million, a year-on-year decrease of 92.07%, and a non-GAAP net profit of approximately RMB 0.141 billion, a year-on-year decrease of 46.76%. It is estimated that the impact amount of non-recurring loss on the net profit of the company in the first half of 2024 will be approximately RMB 0.106 billion, and the reason is that "the fair value change income of Ysstech Info-tech has decreased significantly compared with the same period last year".

Perhaps due to mutual understanding between financial technology peers, Hundsun Technologies Inc. has been engaging in financial techniques with "little brother" Shenzhen Ysstech Info-Tech three years ago.

On February 18, 2021, Hundsun Technologies Inc. invested in Shenzhen Ysstech Info-Tech through agreement transfer for financial investment purposes, holding 7.18% of the stocks. After Hundsun Technologies Inc. bought in, Ysstech's stock price fluctuated upwards from a low level and rose all the way to a high point of 15.95 yuan/share on February 14, 2022. Before Ysstech's stock price entered a downward channel, Hundsun Technologies Inc. had already reduced its holdings at a high position, reducing its holdings of Ysstech on October 29, 2021 and February 23, 2022 at an average price of 9.5 yuan/share and 14.71 yuan/share, respectively. The total number of shares sold was 24.33 million, with a cumulative cash outlay of approximately 0.31 billion yuan.

Will Hundsun Technologies Inc., which previously fled from Shenzhen Ysstech Info-Tech, be able to succeed in buying at low prices and at the same time, "cut down" on expenses?

Hundsun Technologies Inc. stated that one of the company's business priorities this year is to control costs and seek benefits from management. The company will gradually transfer project-based business to newly established subsidiaries, and salary bonuses will be linked to departmental performance. From a remuneration perspective, overall costs for financial technology suppliers are lower than those for financial institutions' self-employed personnel. Based on the company's market insights and research, financial institutions may adjust their ratio of relying on self-owned and externally purchased technology, while maintaining support levels, in order to further reduce spending.