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Public company info - China E-Information Technology Group Limited , 08055.HK
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China E-Information Technology Group Limited, 08055.HK - Company Profile
Chairman -
Share Issued (share) 3,935,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Other Support Services
Corporate Profile Business Summary: The Group is principally engaged in the provision of an internet platform for the facilitation of education program in Chinese medicine and other advisory and training programs. Performance for the year: For the year ended 31 December 2020, the Group recorded revenue of approximately HK$60,862,000 (2019: HK$63,124,000), representing tuition fee revenue. Gross profit for the year under review was approximately HK$30,825,000 (2019: HK$36,141,000), representing a gross profit margin of 50.6% (2019: 57.3%) for the year under review. Business Review The Group is principally engaged in the provision of an internet platform for the facilitation of education program in Chinese medicine and other advisory and training programs. On 1 July 2010, the Joint Construction of Network Education College of Beijing University of Chinese Medicine Agreement (共建北京中醫藥大學網路教育學院協議書) (“Joint Construction Agreement”) entered into between Beijing University of Chinese Medicine (北京中醫藥大學) and Hunan IIN Medical Network Technology Development Co., Ltd. (“Hunan IIN Medical”), a subsidiary of IIN Medical (BVI), was successfully renewed. In accordance with the Joint Construction Agreement, Hunan IIN Medical’s entitlement to share 60% of the profits of Distance Education College of Beijing University of Chinese Medicine (北京中醫藥大學遠程教育學院) (“Distance Education College”) is reduced to 51% profit-sharing percentage during the year 2010 while all other terms and conditions thereunder are not less favourable than those under the Joint Construction Agreement. On 14 April 2015, Hunan IIN Medical, a wholly-owned subsidiary of the Company, entered into a supplemental agreement (the “Agreement”) with the Beijing University of Chinese Medicine (北京中醫藥大學) (“BUCM”) for amending the agreement dated 29 June 2010 signed between them. Pursuant to the Agreement, Hunan IIN Medical will pass its daily business management and administrative management in respect of the Distance Education College of the Beijing University of Chinese Medicine (北京中醫藥大學遠程教育學院) (the “Distance Education College”) to BUCM. This arrangement is primarily made for the purpose of consolidating the daily business management and administrative management of the Distance Education College, so as to reduce operating costs and increase revenue, fully leverage the advantages of both parties in their respective areas, and lay a solid foundation for overall expansion in the future. As announced on 2 July 2010, the Joint Construction Agreement has expired on 30 June 2020. Due to the corresponding epidemic prevention and isolation or blockade measures for the outbreak of COVID-19 in many countries in this year, therefore, the issue of the continuation of the agreement or liquidation of the Distance Education College between Hunan IIN Medical and Beijing University of Chinese Medicine is still under discussion in the negotiation, the Group will work hard to reach the final result with Beijing University of Chinese Medicine as soon as possible. On 24 April 2020, the Company allotted and issued 183,559,543 new shares upon exercises of the conversion rights attaching to the Convertible Notes 2020 (CN2020) in principal amounts of HK$43,687,171. Subsequently, the Company did not issue new convertible notes. The Company did not grant any new share options and convertible bonds during 2020. As mentioned above regarding the Joint Construction Agreement entered into between Beijing University of Chinese Medicine (北京中醫藥大學) and Hunan IIN Medical, it was stated in the announcement dated 2 July 2010 that the Joint Construction Agreement would expire on 30 June 2020. But as various countries having implemented corresponding anti-pandemic quarantine or lockdown measures against the novel coronavirus (COVID-19) outbreak during the year, Hunan IIN Medical and Beijing University of Chinese Medicine are therefore still undergoing negotiations in relation to issues concerning the renewal of the Joint Construction Agreement or the liquidation of Distance Education College. However, the Group will strive to reach final results from negotiations with Beijing University of Chinese Medicine as soon as possible. As the COVID-19 outbreak has imposed a certain degree of impact on the operations of Earth Spa Inc Pte Ltd., therefore, in order to minimize the economic losses caused by the pandemic, the Group completed the disposal of its entire 100% equity interests in Earth Spa Inc Pte Ltd. to an independent third party in March 2020. Moreover, after the Group’s several unremitting attempts amidst the pandemic outbreak, it finally managed to sell Earth Spa Inc Pte Ltd. to the purchaser at a consideration of SGD60,000 (equivalent to approximately HK$326,000). Earth Spa Inc Pte Ltd. is principally engaged in the provision of healthcare services in Singapore. On 5 August 2019, Sinzhongyi Consultancy PTE Ltd. (新中醫諮詢服務有限公司) (“Sinzhongyi”, a wholly owned subsidiary of the Company) and Eastern Art Holdings PTE Limited (東方藝術控股私人有限公司) (“Eastern Art”) entered into a memorandum of cooperation (the “Memorandum of Cooperation”) in relation to the cooperation on the development of a traditional Chinese medicine recuperation and tourism development project in Jurong Lake District, Singapore. Subsequently, on 14 November 2019, Sinzhongyi and Eastern Art entered into a supplemental memorandum of cooperation in relation to the cooperation on the development of the Target Project (the “Supplemental Memorandum of Cooperation”). Pursuant to the Supplemental Memorandum of Cooperation, Sinzhongyi and Eastern Art will jointly invest in establishing a joint venture company (the “Joint Venture Company”) to develop the Target Project, in which Sinzhongyi and Eastern Art will hold 51% and 49% equity interest, respectively. The Target Project will be named the “Traditional Chinese Medicine Recuperation and Tourism Development Project”. The Target Project comprises the construction of a centralised traditional Chinese medicine recuperation centre, a nursing home, a traditional Chinese medicine research and development centre and talent training centre, as well as a traditional Chinese medicine museum, a botanic garden, a hotel, apartments and the relevant ancillary commercial facilities in Jurong Lake District, Singapore. It will occupy a site area of 70,000 square metres and have a total gross floor area of no less than 100,000 square metres. The Target Project will be operated by the Joint Venture Company to build an overseas education base for the remote traditional Chinese medicine education school of the Group. Further details of the establishment of the Joint Venture Company (including but not limited to the amount of capital contribution) will be determined following further negotiations between Sinzhongyi and Eastern Art. On 10 November 2020, the Company and two vendors (namely Beijing Asia Intelligence Technology Company Limited* (北京亞細亞智業科技有限公司) (“Beijing Asia Intelligence”) and Mr. Huang Jiang (黃疆) (“Huang Jiang”) respectively) entered into a memorandum of understanding in relation to the acquisition of Tianjin Mars Technology Co., Ltd.* (天津火星科技有限公司) (“Tianjin Mars Technology”) by the Company. In addition, on 18 December 2020, Beijing Hua Tuo Education Technology Company Limited* (北京華拓教育科技有限公司) (“Beijing Hua Tuo Education Technology”, a wholly-owned subsidiary of the Company) entered into an agreement with Beijing Asia Intelligence and Huang Jiang in relation to the acquisitionof the entire equity interest in Tianjin Mars Technology by the Company. The consideration of such acquisition paid by the Company was up to RMB5,000,000 (equivalent to approximately HK$5,900,000). The relevant terms of the acquisition were set out in the announcement dated 18 December 2020. Tianjin Mars Technology is engaged in the business of software technology development and consultation, computer system integration, software development and wholesale and retail of computer and foreign equipment in China. The Group is principally engaged in the provision of an internet platform for the facilitation of education program in Chinese medicine and other advisory and training programs. Beijing Hua Tuo Education Technology (a wholly-owned subsidiary of the Group) is also principally engaged in the provision of occupational education, industry certification course, skills training and education consultation. Upon completion of such acquisition, Tianjin Mars Technology will be wholly-owned by Beijing Hua Tuo Education Technology and its results will be consolidated into the Company’s accounts. As disclosed in the Company’s annual report for the year ended 31 December 2020, the Company is looking for opportunities in developing both vertically and horizontally within the Group’s existing medical education platform and expanding further into other service networks. The Board considers that the Acquisition provides the Company an opportunity to tap into the database and data storage market and enables the Company to broaden its business scope horizontally. Meanwhile, it is expected that the Acquisition can create strategic synergy with the Group’s existing business by sharing business resources and providing customers with integrated internet platform, database and data storage solution services. The Directors also believe that the Acquisition could enhance the revenue and earnings of the Group in the future. Based on the above, the Directors considered that the terms of the Acquisition are fair and reasonable, and the entering into of the Agreement is in the interests of the Company and the Shareholders as a whole. Tianjin Mars Technology has completed the procedure for the transfer of equity interests on 25 March 2021, and it becomes a wholly-owned subsidiary of the Company. On 8 December 2020, the Company entered into a memorandum of understanding (the “MOU”) with Shanghai Kunyi Investment Management Co., Ltd.(上海坤翼投資管理有限公司), Shenzhen Longhui Fund Management Co., Ltd.(深圳隆徽基金管理有限公司), Suzhou Huaxin Sunda Lichuang Investment Enterprise (L.P.)* (蘇州華信善達力創投資企業（有限合伙）), Ningbo Meishan Free Trade Port Zone Jiayi Equity Investment Fund Partnership Enterprise (L.P.)(寧波梅山保稅港區佳益股權投資基金合伙企業（有限合伙）) and Wuhu Huarong Purun Investment Center (L.P.)(蕪湖華融普潤投資中心（有限合伙）). According to the MOU, the Company intends to acquire, and the Vendors intend to dispose part or all of the issued share capital of a company incorporated in the PRC (the “Target Company”) (the “Possible Acquisition”). The Target Company is principally engaged in meeting the application needs of government transparency, government services and smart cities through major cooperation with various local broadcasting medium, as well as developing official platforms for various government-led supports and promotion work in the PRC. The number of share equity and consideration for the Possible Acquisition and the manner of payment shall be further negotiated between the Company and the Vendors and be determined in the Formal Agreement. In addition, the Company will continue to look for other attractive investments in the PRC and locally in an attempt to diversify into different business areas and to strengthen the positive cash flow and earnings for the Group in the long run. Prospects: The Group’s existing e-learning business will remain the core business and main cash generator in the near future. This business is expected to grow in a rather stable manner. Furthermore, the Group will implement certain cost-effective measures to streamline the operation so as to enhance the profitability and value of this e-learning business. The Company will continue to look for opportunities for its existing business, particularly in developing both vertically and horizontally within the Group’s existing medical education platform, expanding further into its service network, increase the shareholders’ value and reduce business risk. In addition, the Company will continue to look for other attractive investments in the PRC and locally in an attempt to diversify into different business areas to reduce the reliance upon existing e-learning business and strengthen the positive cash flow and earnings for the Group in the long run.

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