ETI Carves Off Int’l Lighting Business

Redirecting focus onto the Chinese LED lighting market, Elech-Tech International (ETI) announced it will be transferring all its international lighting business assets to its Hong Kong subsidiary and sell the company to Jadestone China High-technology Industry Investment Fund (Jadestone).

ETI stated Jadestone will be acquiring 100% of shares in its Hong Kong arm for RMB 190 million (US $27.48 million).

A diagram of ETI's business arms and shares in each company. (Source: LEDinside)

Established in Cayman Islands, Jadestone is an Exempted Limited Partnership investment firm, with a funding capital of approximately HK $640 million (US $82.48 million). General Partner (GP) of Jadestone, Guoyuan Asset Management (Hong Kong) Limited, invested HK $100,000 in the firm, while remaining financing was from third party companies or Limited Partners.

ETI (HK) revenue reached RMB 480 million for 2015, while its net profits reached RMB 25.8 million. The company’s consolidated revenue for the first nine months of 2016 reached RMB 400 million.

Despite a substantial revenue increase over the last three quarters of 2016, the Hong Kong subsidiary reported a negative net worth of RMB 5.41 million.

ETI's balance sheet from fiscal year 2015 to 2016. (Source: LEDinside)

Based on its income approach assessment methods, the company’s revenue increased 3,613.57% to RMB 195 million.

ETI stated the adjustments were made to spin off its international lighting business to meet operation demands. The advantages of concentrating company resources would bolster the company’s lighting business in China, and is estimated to generate a revenue of RMB 195 million. Revenue from the acquisition business transaction will not be listed until the next accounting fiscal year, but there are still uncertainties in the takeover, stated the company.

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