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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility
for the contents of this announcement, make no representation as to its accuracy or completeness and expressly
disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the
contents of this announcement.
SUN ART RETAIL GROUP LIMITED
高鑫零售有限公司
(Incorporated in Hong Kong with limited liability)
(Stock code: 06808)
CONTINUING CONNECTED TRANSACTION
REVISION OF ANNUAL CAPS
Reference is made to the two announcements made on 12 April and 31 May 2019 (hereafter
respectively referred to as “12 April Announcement” and “31 May Announcement”) in relation
to the continuing connected transactions entered into between the Group and the Alibaba Group.
As disclosed in the 12 April Announcement, since the alliance with the Alibaba Group in
2017, the Group has been developing this long-term relationship and has carried out on-going
transactions with the Alibaba Group. In April 2019, the Company entered into a number of
master agreements with Taobao China Holding Ltd. (“Taobao China”, affiliated company of
Alibaba Group) according to the different types/nature of goods and services, details of which
were disclosed in the 12 April Announcement.
Under the category “Sale of goods and services by the Group to Alibaba Group”, the Group has
entered into the Master Supply Agreement with Taobao China to govern transactions between
the Group and Taobao China Affiliates. The Group has continued to enter into a variety of sales
arrangements with Taobao China Affiliates pursuant to the Master Supply Agreement.
In addition to the Master Supply Agreement and transactions with Taobao China Affiliates
contemplated thereunder, the Group has entered into (1) the Shanghai Runhe Supply Agreements
to govern transactions with Shanghai Runhe and Hainan Hema respectively, details of which
were announced in the 31 May Announcement; and (2) the Promotional Goods Supply
Agreement entered into between RT Mart China, Auchan China and Alipay (Hangzhou) on 19
August 2019 in relation to supply of tissue paper products, details of which were announced in
the announcement made on 19 August 2019 (the “19 August Announcement”). The transactions
under the Shanghai Runhe Supply Agreements and the Promotional Goods Supply Agreement
are aggregated with the transactions under the Master Supply Agreement under Rule 14A.81 of
the Listing Rules.
As Taobao China holds approximately 20.98% of the total issued Shares of the Company as at
the date of the present announcement and is therefore a substantial shareholder and a connected
person of the Company under Chapter 14A of the Listing Rules. Taobao China is an indirect
wholly-owned subsidiary of the Alibaba Group. Alibaba Group is therefore also a connected
person of the Company under the Listing Rules. As such, the transactions referred to above
constitute continuing connected transactions under Chapter 14A of the Listing Rules.
1Subsequent to the 12 April Announcement and 31 May Announcement, the business relationship
between the Group and the Alibaba Group has continued to develop. On such basis, the Group
currently anticipates a significant growth in the transaction amounts for the transactions
contemplated under the Master Supply Agreement. In particular, the Group began the trial of the
shared inventory arrangement pursuant to the Master Supply Agreement as a new business model
between the Group and the Alibaba Group to target the online consumer market by providing
speedy delivery of products ordered online. The Group is keen to seize the market opportunity
by expanding the scale of the shared inventory arrangement under the Master Supply Agreement.
Therefore, the Board anticipates that the Original Annual Caps will no longer be sufficient and
proposes to further revise the annual caps for the transactions contemplated under the category
“Sale of goods and services by the Group to Alibaba Group”. The entering of the Supply
Agreements and the Revised Annual Caps are subject to the independent Shareholders’ approval
at the shareholders extraordinary general meeting of the Company (“EGM”) and details of which
are set out below.
IMPLICATIONS UNDER THE LISTING RULES
Taobao China holds approximately 20.98% of the total issued Shares of the Company as at the
date of this announcement and is therefore a substantial shareholder and a connected person of
the Company under the Listing Rules. Taobao China is an indirect wholly-owned subsidiary of
the Alibaba Group, Alibaba Group is therefore also a connected person of the Company under
the Listing Rules. Accordingly, the Master Supply Agreement and the transactions contemplated
thereunder therefore constitute continuing connected transactions of the Company under Chapter
14A of the Listing Rules.
Alibaba Group controls 49% of the equity interests in Shanghai Runhe and Shanghai Runhe is
therefore an associate of Taobao China and connected persons of the Company under the Listing
Rules. Accordingly and the Northeast China Hema Supply Agreement and the transactions
contemplated thereunder therefore constitute continuing connected transactions of the Company
under Chapter 14A of the Listing Rules.
As of the date of this announcement, Hainan Hema is an indirect subsidiary of the Company
which is not an associate of Taobao China. Subject to completion of the Equity Transfer
Agreement, Alibaba will control 49% of the equity interest in Hainan Hema and will therefore
become an associate of Taobao China and a connected person of the Company under the Listing
Rules. Accordingly, the Hainan Hema Supply Agreement and the transactions contemplated
thereunder will constitute continuing connected transactions of the Company under Chapter 14A
of the Listing Rules upon completion of the Equity Transfer Agreement.
As Alipay (Hangzhou) is a subsidiary of Ant Financial, which, together with its subsidiaries,
were deemed as connected persons of the Company by the Stock Exchange in August 2019 under
Rule 14A.19 of the Listing Rules, the Promotional Goods Supply Agreement and the transactions
contemplated thereunder constitute continuing connected transactions of the Company under
Chapter 14A of the Listing Rules.
As one or more of the applicable percentage ratios as defined under Rule 14.07 of the Listing
Rules for the Revised Annual Caps under this category of the Sale of goods and services
by the Group to the Alibaba Group exceed 5% (including the assets ratio, revenue ratio and
consideration ratio as defined under Chapter 14A of the Listing Rules), the continuing connected
transactions under the Supply Agreements are subject to the reporting and announcement
requirements, annual review and the independent shareholders ’ approval requirements under
Chapter 14A of the Listing Rules.
21. BACKGROUND
Reference is made to the two announcements made on 12 April and 31 May 2019 (hereafter
respectively referred to as “12 April Announcement” and “31 May Announcement”) in
relation to the continuing connected transactions entered into between the Group and the
Alibaba Group.
As disclosed in the 12 April Announcement, since the alliance with the Alibaba Group in
2017, the Group has been developing this long-term relationship and has carried out on-going
transactions with the Alibaba Group. In April 2019, the Company entered into a number of
master agreements with Taobao China Holding Ltd. (“Taobao China”, affiliated company of
Alibaba Group) according to the different types/nature of goods and services, details of which
were disclosed in the 12 April Announcement.
Under the category “Sale of goods and services by the Group to Alibaba Group”, the Group
has entered into the Master Supply Agreement with Taobao China to govern transactions
between the Group and Taobao China Affiliates. The Group has continued to enter into a
variety of sales arrangements with Taobao China Affiliates pursuant to the Master Supply
Agreement.
In addition to the Master Supply Agreement and transactions with Taobao China Affiliates
contemplated thereunder, the Group has entered into (1) the Shanghai Runhe Supply
Agreements to govern transactions with Shanghai Runhe and Hainan Hema respectively,
details of which were announced in the 31 May Announcement; and (2) the Promotional
Goods Supply Agreement entered into between RT Mart China, Auchan China and Alipay
(Hangzhou) on 19 August 2019 in relation to supply of tissue paper products, details of which
were announced in the 19 August Announcement. The transactions under the Shanghai Runhe
Supply Agreements and the Promotional Goods Supply Agreement are aggregated with the
transactions under the Master Supply Agreement under Rule 14A.81 of the Listing Rules.
As Taobao China holds approximately 20.98% of the total issued Shares of the Company
as at the date of the present announcement and is therefore a substantial shareholder and a
connected person of the Company under Chapter 14A of the Listing Rules. Taobao China is
an indirect wholly-owned subsidiary of the Alibaba Group. Alibaba Group is therefore also a
connected person of the Company under the Listing Rules. As such, the transactions referred
to above constitute continuing connected transactions under Chapter 14A of the Listing Rules.
Subsequent to the 12 April Announcement and 31 May Announcement, the business
relationship between the Group and the Alibaba Group has continued to develop. On such
basis, the Group currently anticipates a significant growth in the transaction amounts for
the transactions contemplated under the Master Supply Agreement. In particular, the Group
began the trial of the shared inventory arrangement pursuant to the Master Supply Agreement
as a new business model between the Group and the Alibaba Group to target the online
consumer market by providing speedy delivery of products ordered online. The Group is keen
to seize the market opportunity by expanding the scale of the shared inventory arrangement
under the Master Supply Agreement. Therefore, the Board anticipates that the Original
Annual Caps will no longer be sufficient and proposes to further revise the annual caps for
the transactions contemplated under the category “Sale of goods and services by the Group
to Alibaba Group”. The entering of the Supply Agreements and the Revised Annual Caps are
subject to the independent Shareholders’ approval at the shareholders extraordinary general
meeting of the Company (“EGM”) and details of which are set out below.
32. TERMS OF AGREEMENTS
Master Supply Agreements
As disclosed in the 12 April Announcement, the principal terms of the Master Supply
Agreements are as follows:
Date : 11 April 2019
Parties : (i) The Company; and
(ii) Taobao China (on behalf of and together with
Taobao China’s Affiliates).
Term : Three (3) years commencing from 1 January 2019 and
ending on 31 December 2021, unless at any time prior
to the expiry of the Master Supply Agreement either
party gives the other party a prior notice of not less
than one (1) month to terminate the Master Supply
Agreement.
Nature of transaction : Pursuant to the Master Supply Agreement, Taobao
China (through members of Taobao China Group)
agreed to and shall procure Taobao China Affiliates
to, purchase from the Group, and the Group agreed to
supply to Taobao China Group, the Relevant Supply
Products and/or Relevant Supply Services (together
with any other services and/or products as may be
agreed in writing by the parties from time to time).
Each of the Company, Taobao China shall, and shall
procure the relevant entities within the Group and
Taobao China Group (as appropriate) to, enter into
relevant agreements (as applicable) setting out the
terms and conditions of the sales of the Relevant
Supply Products and/or the Relevant Supply Services.
4Prices and fees : The selling price for the Relevant Supply Products
and/or the Relevant Supply Services (inclusive of any
value-added tax, customs duties, other relevant taxes
payable by Taobao China Group Entities, packaging
and delivery costs included) will be determined at
the time of the particular sale based on arm’s length
negotiations with reference to (i) the selling price
charged for the same category of services and/or
products offered to independent purchasers at the time
of a particular transaction; (ii) the gross profit margin
expected by the Group in respect of the Relevant
Supply Products and/or Relevant Supply Services of
the same categories; and (iii) the price of products
and services of the same categories as the Relevant
Supply Products and/or Relevant Supply Services
generally offered on the market by independent third
parties. Payments of the transactions will be settled in
arrears, or such other manners as agreed by the parties
in accordance with the agreed timing and manners as
specified in the separate agreements to be entered into
between members of the Group and of Taobao China
Group from time to time.
Payment arrangement : The selling price of the Relevant Supply Products and/
or the Relevant Supply Services shall be settled by the
relevant Taobao Group Entity to the Group each month
on the date as agreed in the relevant agreements.
Shanghai Runhe Supply Agreements
Northeast China Hema Supply Agreement
As disclosed in the 31 May Announcement, the principal terms of the Northeast China Hema
Supply Agreement are as follows:
Date : 31 May 2019
Parties : (i) Qingdao Ruentex; and
(ii) Shanghai Runhe.
Term : Commencing from 31 May 2019 and ending on 31
December 2021, unless at any time prior to the expiry
of the Northeast China Hema Supply Agreement,
Shanghai Runhe gives Qingdao Ruentex not less than
thirty (30) days’ prior notice to terminate the Northeast
China Hema Supply Agreement.
5Nature of transaction : Pursuant to the Northeast China Hema Supply
Agreement, Shanghai Runhe agreed to appoint
Qingdao Ruentex as supplier to supply Relevant
Products to Shanghai Runhe and retail stores operated
under the “Hema” or “Hema Fresh” banner.
Prices and fees : Qingdao Ruentex shall provide quotation of the selling
prices for the Relevant Products (inclusive of any
value-added tax, customs duties, other relevant taxes,
packaging costs, insurance delivery costs included) and
the quoted selling prices are final once they are agreed
by Shanghai Runhe.
The selling price for the Relevant Products of the
particular sale is based on arm’s length negotiations
with reference to (i) the selling price charged for the
same category of services and/or products offered
to independent purchasers at the time of a particular
transaction; (ii) the gross profit margin expected by the
Group in respect of the Relevant Products of the same
categories; and (iii) the price of products and services
of the same categories as the Relevant Products
generally offered on the market by independent third
parties.
A dedicated team of the Group will monitor and
review the selling prices for the Relevant Products
regularly, in order to ensure that the transactions under
the Northeast China Hema Supply Agreement are
conducted on normal commercial terms.
Payment arrangement : The amount payable by Shanghai Runhe to Qingdao
Ruentex will be settled by Shanghai Runhe each month
after confirmation of the amount payable and the
issuance of value added tax invoice on dates as agreed
in the Northeast China Hema Supply Agreement.
6Hainan Hema Supply Agreement
As disclosed in the 31 May Announcement, the principal terms of the Hainan Hema Supply
Agreement are as follows:
Date : 31 May 2019
Parties : (i) Guangdong Ruenhua; and
(ii) Hainan Hema.
Term : Commencing from 31 May 2019 and ending on 31
December 2021, unless at any time prior to the expiry
of the Hainan Hema Supply Agreement either party
gives the other party of not less than thirty (30) days’
prior notice to terminate the Hainan Hema Supply
Agreement.
Nature of transaction : Pursuant to the Hainan Hema Supply Agreement,
Hainan Hema agreed to appoint Guangdong Ruenhua
as supplier to supply Relevant Products to Hainan
Hema and retail stores operated under the “Hema” or
“Hema Fresh” banner.
Prices and fees : Guangdong Ruenhua shall provide quotation of the
selling prices for the Relevant Products (inclusive of
any value-added tax, customs duties, other relevant
taxes, packaging costs, insurance delivery costs
included) and the quoted selling prices are final once
they are agreed by Hainan Hema.
The selling price for the Relevant Products of the
particular sale is based on arm’s length negotiations
with reference to (i) the selling price charged for the
same category of services and/or products offered
to independent purchasers at the time of a particular
transaction; (ii) the gross profit margin expected by the
Group in respect of the Relevant Products of the same
categories; and (iii) the price of products and services
of the same categories as the Relevant Products
generally offered on the market by independent third
parties.
A dedicated team of the Group will monitor and
review the selling prices for the Relevant Products
regularly, in order to ensure that the transactions under
the Hainan Hema Supply Agreement are conducted on
normal commercial terms.
7Payment arrangement : The amount payable by Hainan Hema to Guangdong
Ruenhua will be settled by Hainan Hema each month
after confirmation of the amount payable and the
issuance of value added tax invoice on dates as agreed
in the Hainan Hema Supply Agreement.
Promotional Goods Supply Agreement
As disclosed in the 19 August Announcement, the principal terms of the Promotional Goods
Supply Agreement are as follows:
Date : 19 August 2019
Parties : (i) Alipay (Hangzhou)
(ii) RT Mart China (a subsidiary of the Company);
and
(iii) Auchan China (a subsidiary of the Company).
Term : Ending upon the promotional goods having been fully
distributed to Alipay (Hangzhou)’s customers pursuant
to the promotional events in August 2019 but may be
extended to end upon the promotional goods having
been fully distributed pursuant to the promotional
events in September 2019.
Nature of transaction : Supply of promotional goods in the form of tissue
paper packs to customers upon presentation of
e-coupons issued by Alipay (Hangzhou).
Prices and fees : Alipay (Hangzhou) shall pay to RT Mart China and
Auchan China a fixed price for each e-coupons, which
price is arrived at after arm ’s length negotiation.
Customers of Alipay (Hangzhou) may exchange each
e-coupon for a specified number of tissue paper packs
from any of the physical retail stores under the RT
Mart and Auchan banners.
Payment arrangements : The parties shall settle accounts according to the actual
verified quantity of tissue paper packs redeemed. RT
Mart China and Auchan China shall issue value added
tax invoice to Alipay (Hangzhou) for payment within
30 days of confirmation of verified quantity of tissue
paper packs redeemed.
8In June 2019, the Group began the trial of the shared inventory arrangement pursuant to the
Master Supply Agreement. Under this arrangement, Alibaba’s online customers will be able
to place orders for a broad range of products, excluding garments and electronic products,
available at the Group’s physical stores for delivery within one hour or within half a day,
depending on the customers’ choices and actual location. In order to meet the delivery
requirement, the Group shares its inventory system with Tmall, a business-to-consumer
online retail platform operated by the Alibaba Group, on a real-time basis.
During the trial period, the Group began test runs for introducing the shared inventory system
and has not begun supplying products to the Alibaba Group under the arrangement. Based on
the implementation plan of the shared inventory arrangement pursuant to the Master Supply
Agreement, the Group expects its stores under its two banners to begin selling their products
on Tmall by batches by the beginning of August 2019 and to begin full scale selling by all
stores in September 2019 for one-hour delivery service. This arrangement combines the
parties’ respective online and offline capabilities in providing timely delivery of products to
customers. Given the positive result from trial of this arrangement, the Board of the Company
anticipates that the Original Annual Caps will no longer be sufficient and proposes to further
revise the annual caps for the transactions contemplated under the category “Sale of goods
and services by the Group to the Alibaba Group” subject to the independent Shareholders’
approval at the EGM.
3. HISTORICAL FIGURES
The aggregate of the transaction amounts under the category of the “Sale of goods and
services by the Group to the Alibaba Group”, being the aggregate of the transaction amounts
received by the Group from the Alibaba Group for year ended 31 December 2018 and the six
months ended 30 June 2019 amounted to approximately RMB11 million and RMB62 million,
respectively.
4. REVISION OF THE ORIGINAL ANNUAL CAPS
In view of the anticipated further growth of the transaction amount of the transactions
contemplated under the category “Sale of goods and services by the Group to Alibaba
Group”, the Board has resolved to revise the Original Annual Caps, subject to the approval
by the Independent Shareholders.
The table below sets out the Original Annual Caps and the Revised Annual Caps under the
category “Sale of goods and services by the Group to the Alibaba Group”, respectively:
For the year For the year For the year
ending 31 ending 31 ending 31
December 2019 December 2020 December 2021
Original Annual Caps 2,342,000,000 2,473,000,000 2,628,000,000
Revised Annual Caps 3,762,000,000 13,023,000,000 16,108,000,000
9Notwithstanding the proposed revision of the Original Annual Caps, the terms of the Supply
Agreements remain unchanged.
The above Revised Annual Caps are not intended, and do not purport, to be an indication of
the Group’s future performance or profitability and investors should not rely on the Revised
Annual Caps in deciding whether to invest in the Shares of the Company.
5. BASIS FOR THE REVISED ANNUAL CAPS
In determining the Revised Annual Caps under the category of the “Sale of goods and
services by the Group to the Alibaba Group”, the Board of the Company has taken into
account the following factors:
(a) the anticipated number of stores of the Group participating in the shared inventory
arrangements pursuant to the Master Supply Agreement after trial run in June 2019;
(b) the estimated number of orders and amount per order for each type of participating
stores referred to in (a) above;
(c) the implementation timeline of the shared inventory arrangement under the Master
Supply Agreement (2020 will be the first full year in which sales transactions under the
shared inventory arrangement be conducted);
(d) the anticipated number of the products and services that the Group will supply to the
Alibaba Group under the Supply Agreements; and
(e) the anticipated increase in the scale of operation of the Group.
6. REASONS FOR AND BENEFITS OF THE REVISED ANNUAL CAPS
The Company believes that the growing business cooperation between the Group and the
Alibaba Group will enable the Group to promote and increase sales of its products through
various distribution channels, including online platform which is essential in the growing
PRC retail market.
The Directors (including the independent non-executive Directors) are of the view that (i) the
entering of the Supply Agreements and the Revised Annual Caps are fair and reasonable and
are in the best interests of the Company and its Shareholders as a whole; and (ii) the entering
of the Supply Agreements and the transactions contemplated thereunder were on normal
commercial terms or better, in the ordinary and usual course of business of the Group.
107. INTERNAL CONTROL PROCEDURES ON THE PRICING BASIS OF THE
CONTINUING CONNECTED TRANSACTIONS
The Group will determine the selling price of the products and/services under the category
of “Sale of goods and services by the Group to the Alibaba Group” based on arm’s length
negotiation between the parties taking into consideration the product and/service
specifications, cost structure, profit margin, transaction volume, transaction amount, freight
terms, market condition and development strategy. The selling price of such products and/
or services to the Alibaba Group shall in any event be no less favourable to the Group than
those offered to, or quoted by independent purchasers.
A dedicated team of the Group will monitor and review the selling prices of such products
and/or services regularly, in order to ensure that the transactions under the Supply
Agreements are conducted on normal commercial terms.
8. LISTING RULES IMPLICATIONS
Taobao China holds approximately 20.98% of the total issued Shares of the Company as
at the date of this announcement and is therefore a substantial shareholder and a connected
person of the Company under the Listing Rules. Taobao China is an indirect wholly-owned
subsidiary of the Alibaba Group, Alibaba Group is therefore also a connected person of
the Company under the Listing Rules. Accordingly, the Master Supply Agreement and the
transactions contemplated thereunder therefore constitute continuing connected transactions
of the Company under Chapter 14A of the Listing Rules.
Alibaba Group controls 49% of the equity interests in Shanghai Runhe and Shanghai Runhe
is therefore an associate of Taobao China and connected persons of the Company under
the Listing Rules. Accordingly and the Northeast China Hema Supply Agreement and the
transactions contemplated thereunder therefore constitute continuing connected transactions
of the Company under Chapter 14A of the Listing Rules.
As of the date of this announcement, Hainan Hema is an indirect subsidiary of the Company
which is not an associate of Taobao China. Subject to completion of the Equity Transfer
Agreement, Alibaba will control 49% of the equity interest in Hainan Hema and will therefore
become an associate of Taobao China and a connected person of the Company under the
Listing Rules. Accordingly, the Hainan Hema Supply Agreement and the transactions
contemplated thereunder will constitute continuing connected transactions of the Company
under Chapter 14A of the Listing Rules upon completion of the Equity Transfer Agreement.
As Alipay (Hangzhou) is a subsidiary of Ant Financial, which, together with its subsidiaries,
were deemed as connected persons of the Company by the Stock Exchange in August 2019
under Rule 14A.19 of the Listing Rules, the Promotional Goods Supply Agreement and the
transactions contemplated thereunder constitute continuing connected transactions of the
Company under Chapter 14A of the Listing Rules.
11As one or more of the applicable percentage ratios as defined under Rule 14.07 of the
Listing Rules for the Revised Annual Caps under this category of the Sale of goods and
services by the Group to the Alibaba Group exceed 5% (including the assets ratio, revenue
ratio and consideration ratio as defined under Chapter 14A of the Listing Rules), the
continuing connected transactions under the Supply Agreements are subject to the reporting
and announcement requirements, annual review and the independent shareholders’ approval
requirements under Chapter 14A of the Listing Rules.
9. GENERAL INFORMATION AND EGM
The Company will convene the EGM in due course for the independent shareholders to
consider and, if thought fit, approve, confirm and ratify the entering into of the Supply
Agreements and the Revised Annual Caps.
An independent board committee has been formed to advise the independent shareholders in
respect of the entering into of the Supply Agreements and the Revised Annual Caps.
Alliance Capital Partners Limited has been appointed as the independent financial adviser to
advise the independent board committee and the independent shareholders in this regard.
Both Mr. Zhang Yong and Mr. Chen Jun, are non-executive Directors appointed by Taobao
China and therefore they are considered to have material interests in respect of the relevant
board resolutions in connection with the entering into of the Supply Agreements and the
Revised Annual Caps.
For good corporate governance, Mr. Zhang Yong and Mr. Chen Jun had voluntarily abstained
from voting on the relevant board resolution in connection with the entering into of the
Supply Agreements and the Revised Annual Caps.
Save for the aforesaid and to the best knowledge, information and belief of the Company,
none of the Directors have any material interest in the Supply Agreements and the Revised
Annual Caps for which they would be required to abstain from voting on the relevant board
resolution approving such documents pursuant to the articles of association of the Company.
10. DISPATCH OF CIRCULAR
A circular containing, among other things, details of the Revised Annual Caps, a letter
from the independent board committee and a letter of advice from the independent financial
adviser together with a notice to convene the EGM, will be despatched to the shareholders of
the Company on or before 12 September 2019.
The expected despatch date of the circular to shareholders of the Company is more than
15 Business Days after the publication of the present announcement since additional time
is required to prepare the relevant information to be included in the circular and for the
independent financial adviser to review and advise on the entering of the Supply Agreements
and the Revised Annual Caps.
1211. INFORMATION OF THE PARTIES
The Group
The principal activity of the Group is the operation of hypermarkets and E-commerce
platforms in the PRC.
Alibaba
Alibaba is a company incorporated in the Cayman Islands and its American depository shares
are listed on the New York Stock Exchange.
Alipay (Hangzhou)
Alipay (Hangzhou) is a company incorporated under the laws of PRC.
Taobao China
Taobao China is a company incorporated in Hong Kong. Taobao China is the direct holding
company of certain PRC subsidiaries relating to Taobao Marketplace, China ’s largest
mobile commerce destination, and Tmall, China’s largest third-party platform for brands and
retailers, in each case in terms of gross merchandise volume in 2017.
Shanghai Runhe
Shanghai Runhe is a company incorporated under the laws of PRC and is principally engaged
in the operation of Hema Stores.
Qingdao Ruentex
Qingdao Runetex is a company incorporated under the laws of PRC and is principally
engaged in operation of hypermarkets in the PRC.
Guangdong Ruenhua
Guangdong Ruenhua is a company incorporated under the laws of PRC and is principally
engaged in operation of hypermarkets in the PRC.
Hainan Hema
Hainan Hema is a company incorporated under the laws of PRC and is principally engaged in
operation of the Hema Stores in Hainan region in the PRC.
1312. DEFINITIONS
In this announcement, unless the context otherwise requires, the capitalised terms shall have
the meanings as set out below:
“Affiliates” in relation to a body corporate means any other body
corporate that controls, is controlled by or is under common
control with such body corporate. For the purposes of this
definition, the term “control” (including, with correlative
meanings, the terms “ controlling ”, “ controlled by ” and
“ under common control with ”), as used with respect to
any body corporate, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction
of the management and policies of such body corporate,
whether through the ownership of voting securities, by
contract, voting power or otherwise
“Alibaba” Alibaba Group Holding Limited (阿里巴巴集團控股有限公
司), a company incorporated in the Cayman Islands and the
American depositary shares of which are listed on the New
York Stock Exchange
“Alibaba Group” Alibaba, its Subsidiaries and its associates
“Alibaba Technology” 阿 里 巴 巴（ 中 國 ）網 路 技 術 有 限 公 司 ( A l i b a b a ( C h i n a )
Network Technology Co., Ltd.*), a company incorporated
under the laws of the PRC and an indirect wholly owned
subsidiary of Alibaba
“Alipay (Hangzhou)” 支付寶（杭州）信息技術有限公司 ( A l i p a y ( H a n g z h o u )
Information Technology Co., Ltd.*), a company
incorporated in the PRC and a deemed connected person of
the Company (as defined under the Listing Rules)
“Ant Financial” 浙江螞蟻小微金融服務集團股份有限公司(Ant Financial
Small and Micro Financial Services Group Co., Ltd.*), a
company established in the PRC with limited liability and a
deemed connected person of the Company (as defined under
the Listing Rules)
“associate(s)” has the meaning ascribed to it under the Listing Rules
“Auchan China” 歐尚（中國）投資有限公司(Auchan (China) Investment Co.,
Ltd.*), a company incorporated in the PRC and a subsidiary
of the Company
14“Board” the board of Directors of the Company
“Business Day” a day on which banks are open for business in the PRC
“Company” Sun Art Retail Group Limited (高鑫零售有限公司), a
company incorporated under the laws of Hong Kong on 13
December 2000 with limited liability, the shares of which
are listed on the main board of the Stock Exchange
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“Director(s)” director(s) of the Company
“Disposal” the disposal of the entire equity interest in Hainan Hema by
RT-Mart China to Shanghai Runhe pursuant to the terms and
conditions of the Equity Transfer Agreement
“EGM” the extraordinary general meeting of the Company to be
convened for the independent shareholders to approve,
confirm and ratify the entering into of the Supply
Agreements and the Revised Annual Caps
“Equity Transfer Agreement” the equity transfer agreement dated 31 May 2019 entered
into between RT-Mart China and Shanghai Runhe in relation
to the Disposal
“Group” the Company and its Subsidiaries
“Guangdong Ruenhua” 廣東潤華商業有限公司(Guangdong Ruenhua Commercial
Co., Ltd.*) a company incorporated in the PRC and a
subsidiary of the Company
“Hainan Hema” 海南盒馬網路科技有限公司(Hainan Hema Network
Technology Co. Ltd.*), a company incorporated in the
PRC and a subsidiary of the Company as of the date of this
announcement, to be transferred to Shanghai Runhe pursuant
to the Equity Transfer Agreement
“Hainan Hema Supply the master supply agreement (inclusive of the sub-commercial
Agreement” agreement) entered into between Guangdong Ruenhua and
Hainan Hema on 31 May 2019 in relation to the supply of
Relevant Products
15“Hema Stores” the retail store(s) operated by Shanghai Runhe in accordance
with the terms of the Hainan Hema Business Cooperation
Agreement or Northeast China Hema Business Cooperation
Agreement which adopts the “Hema Fresh” (“盒馬鮮生”)
business model
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Listing Rules” the Rules Governing the Listing of Securities on the Stock
Exchange
“Master Supply Agreement” the master supply agreement entered into between the
Group and Taobao China (on behalf and together with the
Taobao China Affiliates) on 11 April 2019 and amended
on 14 August 2019 according to the Supply Addendum in
relation to the supply of Relevant Supply Products and/or
the Relevant Supply Services to Taobao China Affiliates
“Northeast China Hema the master supply agreement (inclusive of the
Supply Agreement” sub-commercial agreement) entered into between Qingdao
Ruentex and Shanghai Runhe on 31 May 2019 in relation to
the supply of Relevant Products
“Original Annual Caps” the original annual caps for the aggregate transaction
amounts receivable from Alibaba Group for the category
of “Sale of goods and services by the Group to the Alibaba
Group” as announced in the announcement dated 31 May
2019
“PRC” the People’s Republic of China and for the purpose of this
announcement, it excludes Taiwan, Hong Kong and Macau
Special Administrative Region of the PRC
“Promotional Goods Supply the promotional goods supply agreement entered into
Agreement” between RT Mart China, Auchan China and Alipay
(Hangzhou) on 19 August 2019 in relation to supply of
tissue paper products
“Qingdao Ruentex” 青島潤泰事業有限公司瀋陽分公司(Qingdao Ruentex
Enterprises Co., Ltd., branch of Shenyang*), a company
incorporated in the PRC and a subsidiary of the Company
16“Relevant Supply Product(s)” fresh food products, pre-packaged food products, grocery
products, household products and any other merchandise
customarily sold in the relevant retail outlet operated by
Auchan China and RT-Mart China, and any other products
which the Group and Taobao China Group may agree
in writing from time to time under the Master Supply
Agreement
“Relevant Supply Service(s)” the relevant services to be confirmed and agreed by the
Group and Taobao China Group in writing from to time
under the Master Supply Agreement
“Revised Annual Caps” the revised annual caps for the aggregate transaction
amounts receivable from the Alibaba Group for the category
of “Sale of goods and services by the Group to the Alibaba
Group” as announced in this announcement
“RMB” Renminbi, the lawful currency of the PRC
“RT-Mart China” 康成投資 （中國） 有限公司(Concord Investment (China) Co.,
Ltd.*), a limited liability company incorporated in the PRC
and is a subsidiary of the Company
“Shanghai Runhe” 上海潤盒網路科技有限公司 (Shanghai Runhe Internet
Technology Co., Ltd.*), a limited liability company
incorporated in the PRC and is jointly held by RT-Mart
China as to 51% equity interest and Alibaba Technology as
to 49% equity interest
“Shanghai Runhe Supply the Northeast China Hema Supply Agreement and the
Agreements” Hainan Hema Supply Agreement
“Share(s)” ordinary share(s) of the Company in issue
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Subsidiary” has the meaning ascribed to it under the Listing Rules
“substantial shareholder” has the meaning ascribed to it under the Listing Rules
"Supply Addendum" the Addendum agreement entered into between the Company
and Taobao China (on behalf of and together with Taobao
China Affiliates) on 14 August 2019 in respect of the Master
Supply Agreement
17“Supply Agreements” the Master Supply Agreement, the Shanghai Runhe Supply
Agreements and the Promotional Goods Supply Agreement
“Taobao China” Taobao China Holding Limited, a company incorporated
in Hong Kong and an indirect wholly owned subsidiary of
Alibaba
“Taobao China Affiliates” Subsidiaries and Affiliates of Alibaba
“Taobao China Group” Taobao China and the Taobao China Affiliates
“Taobao China Group the relevant entity/(ies) of Taobao China Group conducting
Entity(ies)” business with and/or supplying services or goods to the
Group and which fall within the applicable scope under the
underlying agreements
“12 April Announcement” the announcement published by the Company on 12 April
2019 in relation to the entering of various agreements
entered into for the purpose of governing different categories
of connected transactions, including the Master Supply
Agreement
“31 May Announcement” the announcement published by the Company on 31 May
2019 in relation to the entering of the Shanghai Runhe
Supply Agreements
“%” per cent.
By Order of the Board
Sun Art Retail Group Limited
HUANG Ming-Tuan
Chief Executive Officer
Hong Kong, 20 August 2019
As at the date of this announcement, the Directors are:
Non-executive Directors:
Mr. ZHANG Yong (Chairman)
Mr. Edgard, Michel, Marie BONTE
Mr. Benoit, Claude, Francois, Marie, Joseph LECLERCQ
Mr. Xavier, Marie, Alain DELOM de MEZERAC
Mr. CHEN Jun
Ms. Isabelle Claudine, Françoise BLONDÉ ép. BOUVIER
Independent Non-executive Directors:
Ms. Karen Yifen CHANG
Mr. Desmond MURRAY
Mr. HE Yi
* For identification purpose only
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