MEDINET GROUP (08161) plans to sell all issued shares of Heung Chuen for 14.4 million Hong Kong dollars.

MEDINET GROUP (08161) announced that on January 9, 2025, the seller (a wholly-owned subsidiary of the company) entered into a purchase agreement with the buyer, Zhao Chuangbo. The seller conditionally agreed to sell, and the buyer conditionally agreed to acquire all the issued shares of the target company for HKD 14.4 million, subject to the terms and conditions of the purchase agreement. Upon completion, the target company, Hengquan, will no longer be an indirect wholly-owned subsidiary of the company, and the financial performance of the target company will no longer be consolidated into the company's accounts. The target company, Hengquan Limited, primarily operates dental clinics providing dental services, including teeth alignment treatment, laser dental implant surgery, teeth whitening, and other general dental services. On July 12, 2018, the group acquired the target company from the buyer's controlled company, Tradewide Investments Limited. Since the acquisition, the target company's dental services business has faced significant challenges due to the impact of COVID-19. The group's dental industry has further been affected in the post-COVID era, especially with the reopening of borders leading to a influx of patients seeking dental treatment in Shenzhen. Changes in consumer behavior have negatively impacted the dental business in Hong Kong, resulting in continuous losses for the target company over the past year. The target company has incurred losses in the two fiscal years ending March 31, 2024. Therefore, the company believes that continuing to operate the dental clinics business is not feasible for the target company. The sale transaction will allow the group to realize the remaining value of the target company, reduce additional costs for providing dental services in Hong Kong, and supplement the group's cash resources to better utilize resources for developing the group's healthcare services business.