Despite earlier doubts about its industry logic and financial pressures, Eternal Asia responded forcefully on the evening of May 15 by announcing the introduction of a strategic investor after a trading halt of more than ten days. On the evening of May 15, Eternal Asia announced that its controlling shareholder, Eternal Asia Holdings, would introduce a strategic investment institution—Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as "Shenzhen Investment Holdings")—by transferring shares of the listed company. Eternal Asia Holdings would transfer 13.3% of its shares in the company to Shenzhen Investment Holdings. After mutual agreement, Eternal Asia Holdings transferred 283 million shares of Eternal Asia at a price of 6.45 yuan per share, totaling 1.82 billion yuan. Upon completion of the transfer, Shenzhen Investment Holdings would become the second-largest shareholder with a 13.3% stake, while Eternal Asia Holdings' stake would decrease to 22.85%. Shenzhen Investment Holdings is not to be underestimated. Here are seven key points to introduce it:

  1. It is 100% owned by the Shenzhen State-owned Assets Supervision and Administration Commission (SASAC), and its former chairman is now the director of the Shenzhen SASAC.

  2. Its registered capital is 23.194 billion yuan. As of the end of 2017, its total consolidated assets were 479.2 billion yuan, total liabilities were 259.3 billion yuan, operating revenue in 2017 was 46.979 billion yuan, and net profit was 14.98 billion yuan.

  3. It has an AAA credit rating in the market, with strong financing capabilities and very low capital costs.

  4. It has 34 subsidiaries, including many high-quality properties in Shenzhen such as Shenzhen Bay, the Convention and Exhibition Center, and Futian Free Trade Zone.

  5. It has a strong financial holding platform, holding stakes in Guosen Securities (33.53%), Shenzhen High-tech Investment (41.80%), SME Guarantee Group (74.53%), and Guoren Property & Casualty Insurance (formerly Xinda P&C Insurance, 41%). It is also the second-largest shareholder of Ping An of China (5.27%) and Guotai Junan Securities (6.99%).

  6. In addition to the above, its listed companies include Tongchan Lixing, Shenzhen Special Economic Zone Real Estate, Shenzhen Textile, and Yitu Information.

  7. In recent years, it has expanded rapidly, completing acquisitions of SME Guarantee Group, Xinda P&C Insurance, and Hopewell Highway Infrastructure, with total M&A investment exceeding 10 billion yuan. It can be said that Shenzhen Investment Holdings is not just an ordinary state-owned enterprise, but a large financial holding platform built by Shenzhen with strong fiscal strength. "The strategic investment in Eternal Asia by Shenzhen state-owned capital marks the beginning of Shenzhen's comprehensive launch of state-owned enterprise mixed-ownership reform in 2018. Against the backdrop of the 40th anniversary of reform and opening-up, the deepening of Shenzhen's state-owned enterprise reform may usher in a climax." On the evening of May 15, an intermediary close to the strategic investment project told reporters that in early May, the Shenzhen SASAC held a special work conference to fully launch and provide special training on mixed-ownership reform of municipal state-owned enterprises. Peng Haibin, director of the Shenzhen SASAC, attended and delivered a mobilization speech. Shenzhen will comprehensively promote mixed-ownership reform in 2018 and plans to basically complete the mixed-ownership reform of commercial enterprises by 2019. Why Eternal Asia? As early as May 2, when Eternal Asia issued a temporary trading halt announcement, it stated that the company and its controlling shareholder, Eternal Asia Investment, were planning a major matter and intended to introduce strategic investors. Although the market speculated about the upcoming strategic investor, when the answer was revealed—Shenzhen Investment Holdings, representing Shenzhen state-owned capital, acquiring the position of second-largest shareholder with 1.8 billion yuan—it still exceeded market expectations. In early May, the Shenzhen SASAC had just signaled a trend of comprehensively promoting mixed-ownership reform. Why did the first case of Shenzhen state-owned capital taking a stake in a private enterprise go to Eternal Asia? "Unexpected but reasonable." On the evening of May 15, a person in charge of an investment institution holding shares in Eternal Asia said in an interview, "The logic behind our optimism about Eternal Asia was the scarcity and strategic nature of the industry. Recently, whether from policy orientation or the upstream and downstream demand of the entire industry, it is clear that the supply chain is ushering in an important historical development opportunity. The entry of Shenzhen state-owned capital this time is also a concrete manifestation of national policy recognition and support for the development of the supply chain industry." In October 2017, the General Office of the State Council issued the "Guiding Opinions on Actively Promoting Supply Chain Innovation and Application" (hereinafter referred to as the "Opinions"), proposing to cultivate about 100 globally leading supply chain enterprises by 2020, with green supply chains and global supply chains as future goals and directions. "The direction of the Opinions coincides with Eternal Asia's consistent business structure and strategic layout. As policy support for supply chain service enterprises becomes clearer, Eternal Asia, as the current leader in the supply chain industry, will undoubtedly be a major beneficiary," the above-mentioned institution head frankly stated. "Supply chain strategy is related to the survival of enterprises, as well as the non-imitable core competitiveness of an industry, a region, and even a country," Wang Guowen, director of the Supply Chain Management Research Institute at the China Development Institute (Shenzhen), recently wrote. "Supply chain security is not only about the security of enterprises themselves, but also involves considerations of national supply chain strategy." "From the perspective of introducing state-owned capital as a strategic investor, proactively introducing a resource-complementary state-owned enterprise as the second-largest shareholder will be conducive to the development and growth of the company," a relevant person in charge of Eternal Asia told 21st Century Business Herald reporters on the evening of May 15. "The two sides will have huge cooperation potential and development space in the fields of supply chain commercial ecosystem services and supply chain financial services. In the future, we will be committed to actively implementing Shenzhen's '13th Five-Year Plan' for modern logistics, building Shenzhen into a global supply chain management center, and cultivating Eternal Asia into a globally leading supply chain service provider." According to reporters' statistics, more than 80% of supply chain enterprises nationwide are concentrated in Shenzhen. The four domestic listed companies in the supply chain service industry—Eternal Asia, Feima International, Orient International Holding, and Prolto Supply Chain—were all born in Shenzhen. In fact, before this, Eternal Asia's layout of related central platform businesses had already been laid out. On the evening of April 27, Eternal Asia announced that it would join forces with SF Express and eight other companies to build a super big data platform and jointly establish a super big data joint venture, aiming to build an open and win-win platform, promote the establishment of an efficient and collaborative modern supply chain system, and enhance the competitiveness of domestic enterprises in the international supply chain. Acceleration of Shenzhen State-Owned Enterprise Reform "The entry of Shenzhen Investment Holdings is not only to meet the company's development funding needs, but also to a certain extent to vindicate the company and the supply chain industry. This is positive and healthy for the development of the entire supply chain industry," said the above-mentioned person in charge of Eternal Asia. "Because the outside world does not have a deep understanding of the industry and the company, one-sided comparisons based on traditional industry perspectives often lead to doubts. However, the company is not in a 'barbecue' mode; it has achieved profitability every year, and the increase in business growth corresponds to an increase in working capital, which is normal cash flow. The strong entry of Shenzhen state-owned capital this time, as a project to promote mixed-ownership reform, also means that supply chain innovation and application are being recognized by all parties." The entry of Shenzhen state-owned capital into Eternal Asia is clearly a sign of the acceleration of Shenzhen's state-owned enterprise reform. Shenzhen's mixed-ownership reform, which had been dormant for years, has quietly accelerated. According to reporters, at a recent work conference held by the Shenzhen SASAC to fully launch and provide special training on mixed-ownership reform of municipal state-owned enterprises, based on the work plan for mixed-ownership reform of the entire Shenzhen municipal state-owned system formulated last year, Shenzhen will comprehensively promote mixed-ownership reform in 2018 and basically complete the mixed-ownership reform of commercial enterprises by 2019. Thus, according to the timetable, the city's state-owned assets are expected to usher in a wave of mixed-ownership reform and restructuring in 2018. "Coupled with the fact that this year marks the 40th anniversary of reform and opening-up, Shenzhen, as China's first special economic zone, is expected to usher in a new round of policy dividends. As a representative of Shenzhen's economy, the mixed-ownership reform of Shenzhen's state-owned assets will inevitably become the focus of the market," a macro strategy analyst at an old Beijing brokerage firm also expressed expectations for Shenzhen's state-owned enterprise reform to 21st Century Business Herald reporters on May 15. According to reporters, since March this year, state-owned asset supervision departments from multiple provinces and cities, including first-tier cities such as Beijing, Shanghai, and Guangzhou, have visited the Shenzhen SASAC for research. From March 8 to May 10, the Shenzhen SASAC received at least 11 research visits from relevant local state-owned asset supervision departments from Guangdong Province, Zhangjiagang, Nanjing, Guangzhou, Jiangxi Province, Shanghai's Hongkou District, Shandong Province, Beijing, and Harbin. "The research visits mainly focus on how to accelerate the reform of state-owned enterprises. In addition to exchanging experiences, many local SASACs also expressed a desire to strengthen cooperation between the two sides," a person close to the Shenzhen state-owned asset supervision department revealed to 21st Century Business Herald reporters in early May. According to statistics, the Shenzhen SASAC currently directly or indirectly controls or holds stakes in 23 listed companies, including 20 A-share listed companies and 3 H-share listed companies. This means that once the entry of Shenzhen state-owned capital into Eternal Asia through Shenzhen Investment Holdings is completed on May 15, Eternal Asia will become the 21st A-share listed enterprise under Shenzhen state-owned assets. The following is Eternal Asia's resumption announcement: Stock abbreviation: Eternal Asia Stock code: 002183 Announcement number: 2018-155 Shenzhen Eternal Asia Supply Chain Co., Ltd. Announcement on the Progress of Major Matters and Resumption of Stock Trading The board of directors and all directors of the company guarantee that the information disclosed is true, accurate, and complete, without false records, misleading statements, or major omissions. Special note: The company's stock (securities abbreviation: Eternal Asia, securities code: 002183) will resume trading from the opening of the market on May 16, 2018 (Wednesday). Risk warnings:

  1. There is a risk that the share transfer may not be implemented due to obstacles in the approval procedures;
  2. There is a risk that Shenzhen Investment Holdings may not pass its due diligence on Eternal Asia, leading to the failure of this share transfer. Shenzhen Eternal Asia Supply Chain Co., Ltd. (hereinafter referred to as the "Company" or "Eternal Asia") was suspended from trading on May 2, 2018 (Wednesday) because the company and its controlling shareholder, Shenzhen Eternal Asia Investment Holdings Co., Ltd. (hereinafter referred to as "Eternal Asia Holdings"), were planning a major matter (intending to introduce strategic investors). The company applied to the Shenzhen Stock Exchange, and the company's stock (securities abbreviation: Eternal Asia, securities code: 002183) was suspended from trading from the opening of the market on May 2, 2018 (Wednesday). The company disclosed the "Announcement on Suspension of Trading for Major Matters" (Announcement No. 2018-139) and the "Announcement on the Progress of Major Matters and Extension of Suspension" (Announcement No. 2018-140) on May 2 and May 9, 2018, respectively. I. Basic information of the major matter being planned To promote the long-term development of the company, the company's controlling shareholder, Eternal Asia Holdings, will introduce a strategic investment institution for the company by transferring shares of the listed company: Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as "Shenzhen Investment Holdings"). Eternal Asia Holdings will transfer 13.3% of its shares in the company to Shenzhen Investment Holdings. II. Basic information of the transferee
  3. Company name: Shenzhen Investment Holdings Co., Ltd.
  4. Address: 18th Floor, Investment Building, Shennan Road, Futian District, Shenzhen
  5. Legal representative: Wang Yongjian
  6. Registered capital: 23,149 million yuan
  7. Shareholder: State-owned Assets Supervision and Administration Commission of Shenzhen Municipal People's Government
  8. Business scope: Investment and merger and acquisition of financial and quasi-financial equity in banking, securities, insurance, funds, guarantees, etc.; real estate development and operation within the scope of legally obtained land use rights; investment and services in strategic emerging industries; investment, operation, and management of state-owned equity in wholly-owned, holding, and participating enterprises through restructuring, capital operation, asset disposal, and other means; other businesses authorized by the SASAC (the above business scope requires approval according to national regulations before operation) III. Progress of the major matter being planned Eternal Asia Holdings and Shenzhen Investment Holdings signed the "Share Transfer Agreement" on May 15, 2018 regarding the above share transfer (the main terms of this agreement are detailed in the "Announcement on the Main Terms of the Signed by the Controlling Shareholder" published on CNINFO (http://www.cninfo.com.cn) on May 16, 2018). After mutual agreement, Eternal Asia Holdings transferred 282,318,810 shares of Eternal Asia (accounting for 13.3% of the company's total shares) to Shenzhen Investment Holdings at a price of 6.45 yuan per share, with a total transfer price of 1,820,956,324.50 yuan. IV. Impact of the major matter on the company Shenzhen Investment Holdings is an important large-scale state-owned capital investment and operation company and financial holding company in Shenzhen, shouldering the important mission of serving Shenzhen's modernization, internationalization, and innovation-oriented city construction. It has strong capital strength, and high-end service industry is one of the key industrial clusters it focuses on building. Eternal Asia uses cutting-edge technology to serve commercial operations and is a leading enterprise in the domestic supply chain service field. The two sides have huge cooperation potential and development space in the fields of supply chain commercial ecosystem services and supply chain financial services. In the future, they will be committed to actively implementing Shenzhen's "13th Five-Year Plan" for modern logistics, building Shenzhen into a global supply chain management center, and cultivating Eternal Asia into a globally leading supply chain service provider. V. Arrangements for resumption of stock trading According to the relevant provisions of the "Shenzhen Stock Exchange Stock Listing Rules," the "Standardized Operation Guidelines for Listed Companies on the SME Board," and the "SME Board Information Disclosure Business Memorandum No. 14: Suspension and Resumption of Listed Companies," the company applied to the Shenzhen Stock Exchange, and the company's stock (securities abbreviation: Eternal Asia, securities code: 002183) will resume trading from the opening of the market on May 16, 2018 (Wednesday). The company's designated information disclosure media are "China Securities Journal," "Securities Times," "Shanghai Securities News," and CNINFO (http://www.cninfo.com.cn). All company information is subject to the information published in the above designated media. Investors are advised to pay attention to relevant announcements and be aware of investment risks. This is hereby announced. Board of Directors of Shenzhen Eternal Asia Supply Chain Co., Ltd. May 15, 2018 This article is compiled and edited by New Distribution.