XI’AN, China, Sept. 7, 2017 /PRNewswire/ — Future FinTech Group Inc. (NASDAQ: FTFT) (“Future FinTech” or “the Company” – News), a financial technology company and integrated producer of fruit-related products, today announced that Hedetang Foods (China) Co., Ltd., one of the Company’s wholly owned subsidiaries, signed a Shareholder Investment Agreement with Shaanxi Yinlian Huijin Investment Management Co., Ltd. to jointly invest and establish Zhonglian Hengxin Assets Management Co., Ltd. (“Zhonglian Hengxin”), which furthers the Company’s transformation into a fintech enterprise.
“We are pleased to announce this agreement as it further extends our footprint into the fintech sector and offers substantial opportunities for growth in asset management in China,” said Mr. Hongke Xue, Chief Executive Officer of Future FinTech. “We believe that our strategic approach to create sustainable value from our entry into fintech will create a high margin business that will enable us to capitalize upon China’s growth by utilizing sophisticated financial technologies. This augments our previous expansion into global trading and investments, e-commerce and big data which we believe offers synergies for all of our businesses,” Mr. Hongke Xue concluded.
The business scope of Zhonglian Hengxin has been approved by both the State Administration for Industry and Commerce of the People’s Republic of China and the Shaanxi Administration for Industry and Commerce. The business scope of Zhonglian Hengxin is to purchase and dispose of non-performing assets of financial enterprises and non-financial institutions. The main businesses include the acquisition and disposition of non-performing assets, enterprise reorganization by merger and acquisition, credit and debt liquidation, management of private equity investment fund by entrustment, and private placements and investment management.
Zhonglian Hengxin will establish seven departments: (1) the General Management Department, (2) the Financial Management Department, (3) the First Business Department, (4) the Second Business Department, (5) the Audit and Supervision Department, (6) the Risk Management Department, and (7) the Innovation and Investment Department. The Company will focus on developing an effective operating strategy for this business and is intent upon providing innovative solutions to facilitate the effective use of economic resources while optimizing regional finance economies. The registered capital of Zhonglian Hengxin is to be RMB 100 million, to be contributed before December 31, 2017, where the Company holds a 55% ownership interest in the new fintech enterprise through its indirectly owned subsidiary of Hedetang Foods (China) Co., Ltd.
As shown in the China Financial Stability Report (2017), until the end of 2016, the non-performing loan (“NPL”) balance of banking financial institutions has been RMB 2.19 trillion with an NPL ratio of 1.91%, which has been on the increase up to June 2017. Zhonglian Hengxin will comprehensively assess the marketplace and seek to develop financial solutions utilizing innovative and sophisticated tools, aiming at becoming an innovative company to revitalize NPLs and financial assets through fintech, and in so doing, help in the reconstitution and development of China’s economy.