Recently, based on its own demand point for development, Shunho Stock performed a number of adjustments to optimize the layout in the industry chain of industrial hemp. By making full use of its multi-resources advantages, it has further upgraded the cooperation in industrial hemp related supercritical CO₂ extractive technical equipment and relevant businesses of electronic biological health and realized effective collaboration with the Company’s existing R&D achievements and businesses.
Acquiring Shanghai Hongchi to complete the industry chain of industrial hemp
Shunho Stock signed the Agreement on Increment in Capital and Share to Shanghai Hongchi Asset Management Co., Ltd. with Shanghai Hongchi Asset Management Co., Ltd., contributing RMB 31 million for a capital increase to Shanghai Hongchi. After the transaction, Shunho Stock will hold 96.88% of Shanghai Hongchi’s equity.
Shanghai Hongchi officially signed the Capital Increment Agreement with Guizhou Hangtian Wujiang Electromechanical Equipment Co., Ltd. ( referred to as “Hangtian Wujiang” ) on May 20, 2019, after the contribution, it will hold 10.48% of Hangtian Wujiang’s stock.
According to information, Hangtian Wujiang’s supercritical fluid technical equipment is in an industry-leading level both domestically and internationally, that the technology is widely used in the extraction of industrial hemp. The investment will contribute to the completion of the company’s industry chain of industrial hemp, enhancing its competitiveness in comprehensive development.
Establishing Yunnan Maxin to explore electronic biological health products
In addition, the holding subsidiaries of Shunho Stock - Shanghai Green Vaper and Yunnan Luxin also signed a Cooperation Agreement with Yunnan Xike, planning to respectively invest RMB 22.5 million, RMB 4.5 million and RMB 3 million to jointly set up the Yunnan Maxin Biotechnology Co., Ltd. The proposed business scope of the joint venture to be established including the development and manufacturing of electronic products, as well as the research and development, processing and sales of electronic biological health products (including solid spices derived from the base materials of industrial hemp leaves, electronic atomized liquid, inhalation administration, etc.). When the transaction is completed, Shunho Stock will indirectly hold 90% equity of the joint venture and dominate the controlling stake.
According to reports, shareholders of Yunnan Xike are Shanghai Green Vaper and Yunnan Henggang Science and Technologies Co., Ltd. Yunnan Xike now owns a well-established independent intellectual property system for the low-temperature heat-not-burn products of the new generation, and it has applied for multiple low-temperature heat-not-burn patents, forming product differentiation with the mainstream low-temperature heat-not-burn products on the market. The new-generation low-temperature heat-not-burn atomization patent is independently invented by Xike biology and Green Vaper Electronic from China. Under the more and more severe situation of protection of intellectual property rights by the State, the two parties of this revolutionary invention make a formidable combination, forming an effective technical barrier and moat.
Through the cooperation, both parties can give full play to their own resource advantages, to jointly explore the market opportunities of the base material after the industrial hemp leaves is extracted in the electronic biological health product area.
