Click to read the original text for details. On the evening of May 31, Sun Art Retail announced that its indirect subsidiary RT-Mart China entered into an equity transfer agreement with its associated subsidiary Shanghai Runhe, whereby Shanghai Runhe agreed to purchase and the company agreed to sell all equity in Hainan Hema (i.e., all equity held by RT-Mart China in Hainan Hema) for a consideration of $5 million. After the completion of the sale, RT-Mart China will no longer hold any equity in Hainan Hema. At the same time, since Hainan Hema will become a wholly-owned subsidiary of Shanghai Runhe, an associated subsidiary of Sun Art Retail, Hainan Hema will become a non-wholly-owned subsidiary and a connected subsidiary of Sun Art Retail. According to data, Hainan Hema was established on May 28, 2018, and is mainly engaged in the operation of Hainan Hema stores. As of December 31, 2018, the net assets and total assets of Hainan Hema were approximately RMB 24.115 million and RMB 64.173 million, respectively. During the period from May 28, 2018 to December 31, 2018, the net loss before tax and net loss after tax were approximately RMB 9.72 million and RMB 9.72 million, respectively. Sun Art Retail stated that, considering the potential business cooperation with Shanghai Hema, an indirect wholly-owned subsidiary of Alibaba, which adopted the "Hema Fresh" business model in Hainan Hema stores as disclosed in the company's announcement dated January 15, 2019, Hainan Hema was established in May 2018 as a subsidiary of RT-Mart China to operate the group's stores in Hainan Province. Since Shanghai Runhe is jointly held by RT-Mart China and Alibaba Network Technology with 51% and 49% equity respectively, the parties intended to operate Hema stores through Shanghai Runhe or its subsidiaries. However, since Shanghai Runhe was not registered until November 2018, and the Hainan Hema business cooperation agreement was only entered into by the parties in January 2019, Hainan Hema was established by the group as a subsidiary of RT-Mart China in May 2018 and has been operated by RT-Mart China since September 2018. In view of the Hainan Hema business cooperation agreement entered into in January 2019, the commencement of business cooperation and proposed transactions thereunder, and the gradual business development of Shanghai Runhe, the company believes that the sale to Shanghai Runhe, which is also a subsidiary of the company, will simplify the group's corporate structure, continue to promote the implementation of the "Hema Fresh" business model, leverage Taobao China's expertise in internet technology and digital infrastructure, and thereby create further value for the group. According to "Lianshang.com", in May 2018, Hainan Hema Network Technology Co., Ltd. was established, with legal representative Huang Mingduan. It is worth noting that the company is 100% controlled by Kangcheng Investment (China) Co., Ltd., the parent company of RT-Mart. In addition, Hainan Hema also established a Haikou Guomao branch, with legal representative Cai Biyang, who previously served as general manager of RT-Mart's East China and South China regions. The first Hema store in Hainan, Haikou Guomao store, opened on September 28, 2018, located on the 2nd floor of Wanghai International Shimao 109 Store, No. 109-9 Binhai Avenue, Haikou City, Hainan Province. The store covers an area of over 5,000 square meters and is divided into 10 areas: fruit and vegetable, meat, poultry and eggs, frozen and refrigerated, snacks, beverages, rice, flour and oil, aquatic products, dining area, seafood bar, and bakery. Fresh products are all seasonal recommendations. Previously, RT-Mart Chairman Huang Mingduan stated that RT-Mart would help Hema open stores in Northeast China and Hainan. This new format would retain Hema's supply chain features, while RT-Mart would appoint store managers and add RT-Mart's distinctive categories. It is understood that in 2004, RT-Mart announced its entry into the Hainan market and currently has three stores in Haikou: Guomao, Guoxing, and Longkunnan. Source: Lianshang Supermarket Home (ID: chaoshirenzhijia)