Sunshine Lighting intends to transfer 15% of the equity of Zhiyiwulian, which has suffered losses for two consecutive years

On January 9, 2023, Sunshine Lighting announced that the company and Qi Xiaoming signed an "Equity Transfer Agreement", agreeing to transfer the 15% equity of Zhejiang Zhiyi IoT Technology Co., Ltd. (hereinafter referred to as "Zhiyi IoT") held by Qi Xiaoming for a price of 12 million yuan.

It is reported that Qi Xiaoming officially became the business leader of Sunshine Lighting in China in January 2021; in February 2021, Qi Xiaoming invested in the establishment of Zhiyi IoT as the main company for cooperation between Qi Xiaoming and Sunshine Lighting to reorganize, innovate and enhance the Chinese market of Sunshine Lighting.

In June 2021, Sunshine Lighting and Qi Xiaoming signed an "Investment Agreement." According to the agreement, Sunshine Lighting subscribed to invest 85 million yuan, accounting for 85% of the equity of Zhiyi IoT; Qi Xiaoming subscribed to invest 15 million yuan, accounting for 15% of the equity of Zhiyi IoT.

Sunshine Lighting has high hopes for Qi Xiaoming and Zhiyi IoT. According to the announcement issued by Sunshine Lighting at the time, the company signed an "Investment Agreement" with Qi Xiaoming in order to reorganize, innovate and enhance the Chinese market, increase investment and joint ventures in expanding the domestic market, promote reliance on innovative products, improve design capabilities and comprehensive service capabilities, rapidly increase domestic market share, and make the domestic market bigger and stronger.

But contrary to expectations, domestic lighting sales have been sluggish in the past two years, and Zhiyi IoT's short-term sales performance has dropped significantly. In 2021 and 2022, Zhiyi IoT achieved revenue of 185.4959 million yuan and 463.6078 million yuan respectively, with corresponding net profits of -23.0026 million yuan and -60.308 million yuan respectively.

Based on its future business planning, Sunshine Lighting decided to acquire minority shareholders’ interests. Sunshine Lighting pointed out that after this transaction, Zhiyi IoT will become a 100%-owned subsidiary of the company, which will help Zhiyi IoT better expand the company's business in China, reduce costs and increase efficiency, focus on business expansion, and turn losses into profits in operations, which is conducive to the company's integration of the Chinese market and the improvement of the company's operating performance.

In addition, according to the announcement issued by Sunshine Lighting on December 10, 2022, Qi Xiaoming applied to resign as the company's director, acting general manager, and executive deputy general manager due to work adjustments, and accordingly resigned as a member of the professional committees under the board of directors.