On February 10, Lianjian Optoelectronics issued an announcement announcing that its wholly-owned subsidiary Shenzhen Liandong Outdoor Advertising Co., Ltd. (hereinafter referred to as “Shenzhen Liandong”) will sell its wholly-owned grandson company Shanghai Youtuo Public Relations Consulting Co., Ltd. (hereinafter referred to as “Youtuo”). Public relations”) 100% equity.
According to the announcement, Shenzhen Linkage transferred its 100% stake in Youtuo Public Relations to Jiang Hao and Wang Zheng at a price of 34.5 million yuan. Jiang Hao transferred 70% of Youtuo Public Relations and Wang Zheng received 30% of Youtuo Public Relations. Equity. After the completion of this transaction, Youtuo Public Relations will not be included in the scope of the company’s consolidated statements.
It is reported that Lianjian Optoelectronics acquired 100% equity of Youtuo Public Relations through a non-public offering of shares in 2015. Later, in order to straighten out the management structure of the company’s various sectors, the company transferred 100% of the equity held by Youtuo Public Relations to Shenzhen United Action. After the equity transfer was completed, Youtuo Public Relations became the company’s wholly-owned grandson company.
According to the announcement, the main business scope of Youtuo Public Relations is the organization and planning of public relations activities, conference and exhibition services, advertising, advertising design, agency, market research, information consulting services, cultural and artistic exchange planning, and corporate image planning.
Affected by factors such as the market decline in the advertising industry, Youtuo Public Relations has suffered losses in the past two years. In 2020, affected by the new crown pneumonia epidemic, advertisers have reduced their advertising budgets, making it more difficult to recover receivables, and losses have further expanded. It is expected that related businesses will not return to normal levels in the short term.
Lianjian Optoelectronics stated that the transfer of Youtuo Public Relations is to avoid further adverse effects on the company’s normal production and operation in the follow-up of related businesses, and is in line with the company’s strategic layout of “appropriate strategic shrinkage, focus on the main business, and strengthen core capabilities”.
By stripping off some assets, Lianjian Optoelectronics will further optimize the equity structure, reduce the company’s operational risks, improve management efficiency, and focus on the development of LED core business.