SINGAPORE: China Kunda Technology Holdings has entered into a sale and purchase agreement with Shenzhen City Tangjia Kitchen Appliances Company to dispose its entire 100% interest in the subsidiary, Shenzhen Shi Er Ju Quan Wu Ding Zhi Company (SEJ) for a net consideration of RMB 2.0mn.

SEJ, a wholly-owned subsidiary of China Kunda Technology, was incorporated with a registered and paid-up share capital of RMB 6.0mn. SEJ is principally engaged in the production and supply of furniture and fittings.

The Board is of the view that it is in the interest of the Group to undertake the disposal in view of the weak financial performance of SEJ.

“Our Furniture Business had been reporting losses in the last 3 financial years due to revenue contributed from the Furniture Business were lower than our expectation resulting in a depletion of reserves and cash resources of the Group,” a notice said.

“In 2021, China’s property market has weakened as a result of measures imposed by the Chinese government such as tight credit policies and a looming property tax dampen demand to curb booming property prices”.

“It resulted China’s property market suffered headwinds with home prices, sales, investment and construction all falling, weighed by weak demand and a cash crunch among developers”.

China’s property downturn is expected to continue into 2022 and it will be difficult for companies to secure potential sales orders from the housing developing projects.

After the disposal is completed, the Group will continue to assess the market demand of furniture and fittings and supply the furniture and fittings when the business opportunity arises.