Zhongtong Finance APP news, Shenghui Clean (02521) announced that on September 3, 2024, the company's wholly-owned subsidiary, Tianyou Shenghui Green Technology (Hong Kong) Limited, signed a cooperation framework agreement with Bozhaoke Precision Manufacturing Co., Ltd. and Hong Kong Li Hua Trading investment Co., Ltd., which suggests the establishment of a joint venture company.

When the joint venture company is established, Tianyou Shenghui, Bozhaoke Precision, and Li Hua Trading will respectively own 41%, 39%, and 20% of the joint venture company. The registered capital of the joint venture company will be HKD 5 million, which will be contributed by Tianyou Shenghui, Bozhaoke Precision, and Li Hua Trading, accounting for 41% (i.e. HKD 2.05 million), 39% (i.e. HKD 1.95 million), and 20% (i.e. HKD 1 million) respectively. The group plans to allocate HKD 2.05 million from its internal resources to the joint venture company.

Since its establishment, the group has been developing its existing business in Guangdong Province. Given the increasing awareness of the public and the government on environmental, social, and governance, the potential of the recycling material market, and the role of Hong Kong, China as a springboard to enter the international market in the Greater Bay Area, the group aims to achieve the Chinese government's low-carbon emission target and seize the market opportunities in the green business by leveraging its existing environmental, social, and governance business. Through the establishment of a joint venture, the joint venture company aims to establish more than five bio-based industrial parks in Hong Kong, China, and other regions (including but not limited to Macau, Singapore, and Australia) within three years by collecting waste products and developing bio-based new materials in Hong Kong, China. Each joint venture party will make good use of its expertise and strengths, while the group will leverage its brand, funds, and supply chain management experience, and Bozhaoke Precision and Li Hua Trading will be responsible for operation, quality control, marketing, and brand building. If successful, the joint venture parties plan to expand their business model to countries and regions outside of China, including Macau, Singapore, Australia, and other countries and regions.

The board of directors believes that the joint venture company provides a good opportunity for the group to expand its existing business to the green business, enrich the group's sources of income, and bring stable and sustainable growth to the group's long-term benefits.