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Jing Whale News November 26th News (Reporter Sun Yu) Nanjing Business & Tourism Corp.,Ltd. restructuring plan adjustment situation is revealed.

The company announced on November 25th that Nanjing Business & Tourism Corp.,Ltd. intends to acquire 100% equity of Nanjing Huangpu Grand Hotel Co., Ltd. (referred to as Huangpu Hotel) held by its controlling shareholder Nanjing Travel Group Co., Ltd. (referred to as Nanjing Travel Group) by issuing shares and paying cash, and raise supporting funds not exceeding 80 million yuan.

It is worth noting that the latest announcement shows that Nanjing Business & Tourism Corp.,Ltd. plans to no longer acquire 49% equity of Nan Shang Operation held by Nanjing Commercial Mansion. The company stated that this is due to changes in the market environment. Insiders in the industry suggest that this may be due to the underperformance of Nan Shang Operation.

Proposed acquisition of 100% equity of Huangpu Hotel for 0.222 billion yuan

According to public information, Huangpu Hotel opened in 2003, with a building area of 31,000 square meters, consisting of a 28-story main building and a 13-story annex. Huangpu Hotel is a four-star hotel with a total of 350 business, landscape, and deluxe rooms, equipped with facilities such as self-service restaurants, banquet halls, and multipurpose halls.

According to the announcement, the operating income of Huangpu Hotel from 2022 to the first 9 months of 2024 were 57.3518 million yuan, 90.4835 million yuan, and 53.1519 million yuan respectively, with net profits of -7.906 million yuan, 5.3849 million yuan, and 4.0673 million yuan respectively.

In addition, from 2022 to the first 9 months of 2024, the average rental prices of rooms at Whampoa Hotel were 320.67 yuan, 398.87 yuan, and 387.72 yuan respectively. The room occupancy rates were 59.49%, 85.73%, 83.54% respectively, and the main business gross margin was 16.30%, 35.10%, 41.90% respectively.

According to the asset valuation report issued by North Asia Affairs, as of the valuation reference date (April 30, 2024), the valuation of 100% equity of Whampoa Hotel is 221.5854 million yuan, which is also the transaction price of this equity.

Looking at the payment method for the transaction price, 188.3476 million yuan of the consideration is paid by issuing shares at a price of 6.92 yuan per share, with the number of shares issued for this asset purchase exceeding 0.027 billion shares. The remaining 33.2378 million yuan of the consideration is paid in cash.

In terms of the situation of raising matching funds, the total amount of funds raised this time does not exceed 80 million yuan. Apart from using it to pay the cash consideration for this transaction, intermediary agency fees, and taxes, the remaining amount is intended to supplement the working capital of the listed company.

Nanjing business & tourism corp.,ltd. stated that after the completion of this restructuring, the company will add a hotel sector business, further extending the layout of the cultural tourism industry chain.

Looking at the equity structure of Nanjing Business & Tourism Corp., Ltd., as of the end of the third quarter of this year, Nanjing Tourism Group and its concerted action person Nanjing Commercial Mansion together hold a proportion of 35.03%, making them the controlling shareholder of the company. In this restructuring, Nanjing Tourism Group is subscribing to the shares issued by the listed company with assets, and its future ownership ratio will be further increased.

Regarding this restructuring, Nanjing Business & Tourism Corp., Ltd. stated that the company's asset size, revenue, and net income and other main financial indicators are expected to improve. There is no dilution of earnings per share due to this issuance of shares and cash payment for asset acquisition.

It will help Nanjing Business & Tourism Corp., Ltd. focus on its main business.

The predecessor of nanjing business & tourism corp.,ltd. was nanfang corporation established in 1978, at that time the main operation was the import and export of textiles, outfits and other products. Nanfang corporation went public on the A-share market in 2001. In 2019, it acquired a 51% stake in Qinhuai Scenery Company, starting to lay out its travel services business. With the continuous increase in the revenue share of the travel services business, in November 2023, it was officially renamed as "nanjing business & tourism corp.,ltd.".

In terms of performance, the announcement shows that in the first three quarters of this year, nanjing business & tourism corp.,ltd. achieved revenue of 0.602 billion yuan, a slight decrease of 0.55% year-on-year, with a net income attributable to the mother of 0.039 billion yuan, an increase of 5.66% year-on-year; non-GAAP net income attributable to the mother was 0.022 billion yuan, a decrease of 39.97% year-on-year. The company stated that the decrease in non-GAAP net income was mainly due to the year-on-year decline in the profit from the main operations.

In terms of the main operations, the current operating strategy of nanjing business & tourism corp.,ltd. is the dual development of "travel + trade". The core competitiveness of the travel services business is based on the national 5A-level tourist attraction "Confucius Temple-Qinhuai Scenery Belt", subsidiary Qinhuai Scenery has a 20-year franchise to operate the Qinhuai River water tour line within this attraction, being the only water sightseeing company in the area. In the first half of this year, Qinhuai Scenery's boat tour business revenue was 0.103 billion yuan, accounting for nearly 17% of the company's overall revenue.

As the only controlling listed company under Nanjing Tourism Group, nanjing business & tourism corp.,ltd. has been focusing more on the "cultural and tourism transformation" in recent years. The controlling shareholder Nanjing Tourism Group made a commitment to promote the transformation of nanjing business & tourism corp.,ltd. during the restructuring in 2019.

In addition, to address the potential issue of intra-industry competition after this restructuring, Nanjing Tourism Group entrusted nanjing business & tourism corp.,ltd. to manage its subsidiaries in the hotel sector, travel services sector, and scenic area operation sector which are currently not eligible for listing due to profitability reasons, using a "commissioned management" model.

On the evening of November 24, nanjing business & tourism corp.,ltd. released an announcement about the intention to sign a "Commissioned Management Agreement" with Nanjing Tourism Group and its subsidiaries. According to the announcement, the assets entrusted to nanjing business & tourism corp.,ltd. this time include 7 hotels, 4 companies engaged in travel services, and Nanjing Changjiang Postal Cruise Co., Ltd. mainly engaged in scenic area operation.

The announcement states that the entrusted management period is 3 years. Nanjing business & tourism corp.,ltd. stated that this move is beneficial for accelerating the pace of the listed company's cultural and tourism transformation, aligning with the interests of the listed company and all shareholders.