BEST FOOD HLDG plans to sell 1.71% equity in Guangzhou Yujian Xiaomian Catering for 48 million yuan

According to the announcement from BEST FOOD HLDG (01488), the seller Qixin Holdings Limited (a wholly-owned subsidiary of the company) has entered into an agreement dated July 31, 2025, with the buyers (Mr. Du Ming, Mr. Gu Dongsheng, and Mr. Wei Chuanfa), under which the seller agrees to sell and the buyers agree to purchase the sale equity (equivalent to 1.71% equity of the target company Guangzhou Yujian Xiaomian Catering Co., Ltd.), for a total consideration of RMB 48 million. Completion will occur on August 5, 2025. Before completion, the group holds approximately 17.16% equity in the target company. After completion, the group will hold approximately 15.46% equity in the target company, which will continue to be accounted for as an associate of the group.

The target company is a leading and rapidly growing operator of modern Chinese noodle restaurants, established in Guangzhou in 2014, operating under the "Yujian Xiaomian" brand, focusing on Sichuan and Chongqing style noodles, with business spread across mainland China and Hong Kong. As of the date of this announcement, Huai'an Chuangtao Enterprise Management Partnership (Limited Partnership) (held 66.67% and 33.33% by Mr. Song Qi and Mr. Su Xuxiang respectively) holds approximately 49.04% equity, the seller holds 17.16% equity, CGVCAP1 and CGVCAP2 together hold 9.06% equity, buyer B holds 7.73% equity, while other shareholders hold between 3.01% and 6.50% equity.

The target company is a catering enterprise operating Sichuan and Chongqing style chain noodle restaurants in mainland China and Hong Kong. According to a report by Frost & Sullivan, the acceleration of urbanization in China, the increase in disposable income, and the popularity of digital ordering and delivery platforms have jointly driven the robust development of the noodle restaurant industry in China. The target company's store network has rapidly expanded from 170 stores as of December 31, 2022, to 360 stores by December 31, 2024.

The board believes that the Chinese catering industry is currently in a growth phase, with opportunities everywhere. The seller can timely recoup the initial investment cost to supplement working capital and seek new investment opportunities. Considering the amount payable by the buyers under the agreement, the company believes that disposing of a small portion of its investment in the target company to achieve considerable returns is a good move, and the proceeds are intended to be used for general working capital. Even with the sale, the company still views its stake in the target company as an important strategic investment and currently has no plans or intentions to dispose of the remaining equity in the target company. Immediately after completion, the group will still be the second-largest shareholder with approximately 15.46% equity in the target company and will continue to exert significant influence over the target company through Mr. Wang Xiaolong, who serves as a director in both the company and the target company