Nanfang Shares (600250): Reply To Enquiry Letter To Transform Tourism Industry Through Acquisition Of Qinhuai Scenery

In July 17th, 600250.SH replied to the inquiry letter of the Shanghai Stock Exchange Regarding the disclosure of information on the issue of shares issued by the Nanjing textiles import and export Limited by Share Ltd and the collection of matching funds and related transaction plans.

The company said in its reply that in 2019 1-4, the operation of Qinhuai's scenery was good. The customers were mainly tourists from "ten li Qinhuai" as tourist destinations, and were not affected by the Qinhuai River's construction and tourism business.

The tourism group has made clear the relevant integration measures in its commitment to promote the transformation of listed companies: the first phase of the company will focus on the promotion of Nanfang shares in Nanjing's scenic spots. The company's subsidiary subsidiary, Nanjing the Qinhuai River construction and Development Co., Ltd., the Qinhuai River's cruise business, Nanjing Concord Tourism Co., Ltd., the Yangtze River Binjiang section, the cruise business and the potential integrated objects of the water tour business, will be combed and standardized within 2 years after the completion of the transaction or the right to control assets. If the laws and regulations, the state's industrial policies and regulatory requirements are met, the company will start to inject listed companies within the aforesaid years. If the law and regulations do not comply with national laws and regulations and national industrial policies and regulatory requirements, the company will initiate the abandonment of the controlling stake, the transfer of all equity interests, the sale of assets, cancellation and entrustment, and so on in the aforesaid years.

Before the transaction, the main business of listed companies is import and export trade and domestic trade business. Under the current market environment and competition situation, the listed companies' business development is limited, and enterprises are faced with certain operational risks. The listed company's controlling shareholder Tourism Group has been the integrated platform of Nanjing's tourism assets resources by the Nanjing municipal Party committee and municipal government, while Nanfang shares is the only listed company under the tourism group. The tourism group will take Nanfang shares as the securitization platform and operation platform of the operating tourism assets resources. Under the premise of compliance with laws, regulations, national industrial policies and regulatory requirements, the tourism group will gradually inject all the operating tourism assets resources or operation rights to Nanfang share, while supporting Nanfang shares to integrate the relevant tourism assets with better profitability and high standard in Nanjing. The first phase of the tourism group will focus on the promotion of Nanfang share to integrate the sightseeing tour business in Nanjing.

Based on the current transformation needs and strategic positioning, the listed companies have clearly defined the management and development strategy for the transformation of the cultural tourism industry. In the future, the listed company's parent company will be used as a controlling platform to integrate the high-quality tourism assets resources of Nanjing, and gradually build the business segments and systems covering the scenic tour services, tourism business, hotels and other cultural tourism business around the "eating, living, traveling, shopping, entertainment and entertainment" related to the global tourism.

The first stage of the transformation of listed companies to the cultural tourism industry is to become an operational platform for sightseeing tours in Nanjing's scenic spots. Because of the exclusive right to operate the water cruise project in the Qinhuai River, which is located in about 10 miles of inland waterway in the Qinhuai River, the Qinhuai scenery has the profound historical and cultural background and wide popularity, and has strong influence and attractiveness in the history of the famous 5A class tourist scenic spot in Nanjing. The Qinhuai scenery has been listed on the new third board, which has better profitability, operational ability and financial status. It can enhance the performance of listed companies to a certain extent and optimize the assets and liabilities structure of listed companies. The company has mature tourism experience and excellent operation management team, which is conducive to further integrating the other scenic spots in Nanjing. Therefore, the listed company based on the foregoing business considerations and Qinhuai scenery as the first acquisition target.

This transaction is the first step that the listed companies take to the scenic water tourism business and even the cultural tourism industry transformation and upgrading. After the completion of the transaction, the scenic water tour business will become one of the main business of the listed company. At the same time, with the operation experience of the sightseeing tour business in the scenic and mature scenic spot of Qinhuai, the listed company will gradually integrate the sightseeing tour business in Nanjing, and build a business tour of sightseeing tour covering the waters of the main scenic spots in Nanjing.

After the completion of this transaction, the company will continue to operate in line with its existing business principles, ensure the sustainable development of the existing quality businesses, and deal with high-risk and low income businesses in a timely manner. On the basis of maintaining the stability of the existing main business, we will gradually complete the industrial transformation.

The listed companies have clearly defined the management and development strategy for the transformation of the cultural tourism industry. In the future, we will take the parent company of the listed company as a control platform to integrate the high-quality tourism assets resources of Nanjing, and gradually build a business and business system covering the scenic spots, tourism, business and hotels. The first stage is to integrate the sightseeing tour business in Nanjing. The company will adjust the company's main business step by step based on this positioning. If the company deals with the assets of the original main business in the future, it will perform the corresponding examination and approval procedures in accordance with relevant laws and regulations.