Jinjia Holdings' Move After Suspension: Entering the E-Cigarette Business

Heated Tobacco News Network reported: Jinjia Holdings, which was temporarily suspended from trading on February 24, 2014 due to the planned disclosure of a major matter, revealed its next move on February 25. It is understood that on February 25, the company signed the Cooperation Agreement on the Establishment of Shenzhen Heyuan Jinjia Electronic Technology Co., Ltd. (the “Cooperation Agreement”) with Shenzhen Heyuan Technology Co., Ltd. (“Heyuan Technology”). The two parties plan to jointly invest RMB 100 million to establish a joint venture, tentatively named Shenzhen Heyuan Jinjia Electronic Technology Co., Ltd., mainly engaged in the R&D, production, and sales of e-cigarettes.

It is reported that both parties will contribute capital according to the relevant equity ratio, with Jinjia Holdings investing RMB 51 million for a 51% stake, and Heyuan Technology investing RMB 49 million for a 49% stake. In principle, the contribution will be made in cash, but Heyuan Technology may use its existing e-cigarette product patents, production technology, and products as part of its capital contribution. After the joint venture is established, it will be responsible for developing the domestic e-cigarette business in China. During the planning and initial setup phase of the project company, Jinjia Holdings will be responsible for customer development for the domestic e-cigarette business, while Heyuan Technology will be responsible for building the product R&D and production teams.   According to the announcement, Heyuan Technology has a registered capital of RMB 3 million and is mainly engaged in the R&D, production, and sales of e-cigarettes. Its main products include disposable e-cigarettes, disposable atomizers, rechargeable e-cigarettes, electronic cigars, electronic pipes, the EGO series, low-temperature tobacco series e-cigarettes, and specialty-shaped electronic tobacco series products. The company stated that this external investment will help further optimize its current industrial structure, cultivate new business growth drivers, and align with the company’s overall development strategy and layout. It is expected to have a positive impact on the company’s future development.