Zhichuan Finance and Economics APP News, Lianhua Supermarket (00980) announced on September 27, 2024, that Shanghai Doun Refined (as the buyer), a wholly-owned subsidiary of Bailian Group, has entered into equity transfer agreements with the Company (as the seller) for Jiangsu Lianhua, suggesting the sale of all equity in Jiangsu Lianhua; with the Company's subsidiary, Century Lianhua Development (as the seller), entered into an equity transfer agreement for Anhui Century Lianhua, suggesting the sale of all equity in Anhui Century Lianhua; and an equity transfer agreement with Century Lianhua Development (as the seller) for Hongkou Century Lianhua, suggesting the purchase of all equity in Hongkou Century Lianhua, for a total price of approximately 0.1455234 billion RMB. Upon completion of the equity transfer deliveries specified in the respective agreements, Jiangsu Lianhua, Anhui Century Lianhua, and Hongkou Century Lianhua will no longer be subsidiaries of the Company.

After the completion of the sale, the Company plans to enter into a management agreement with Shanghai Doun Refined, whereby the Company agrees to provide operational management services and resource support services to Jiangsu Lianhua, Anhui Century Lianhua, and Hongkou Century Lianhua, for a period of three years from the effective date of the management agreement.

The announcement states that the signing of the equity transfer agreements and the proposed sales transactions are mainly based on the overall strategic background of the Company's localization development and focus on the core business in Shanghai and Zhejiang. It also takes into full consideration factors such as the market and competitive environment of the three subsidiaries, the operational situation of the stores, network layout, and supply chain impacts. Furthermore, for the Group, it has faced significant financial performance pressure in recent years due to overall economic downturn and intensified competition in the retail industry. This transfer, along with the previous domestic share issuance, can improve the Company's performance, offering an important opportunity for medium- and long-term healthy development and a new beginning. Subsequently, the Group will further stimulate enterprise vitality and long-term competitiveness through medium- and long-term reform measures such as business sector restructuring, format transformation, commodity and supply chain reform, channel development, organizational and digital construction.