Hong Kong-listed gaming investor LET Group (formerly Suncity Group) has announced an agreement to sell off its subsidiary leasing mall space in mainland China’s Zhejiang Province. The sale, priced at HK$21.4 million (US$2.7 million), will fund the group’s “existing developments,” including its hotel and casino projects in Manila, Russia, and Vietnam. Despite incurring a loss on disposal, LET Group sees this as an opportunity to refocus its resources and avoid further capital injection into the subsidiary due to ongoing losses and intense competition from online platforms.
Sale of Subsidiary:
LET Group has agreed to sell its subsidiary, Dongyang Xinguang Pacific Industrial Company Limited, currently leasing mall space in Zhejiang Province, mainland China. The sale proceeds of HK$21.4 million (US$2.7 million) will be directed to fund the group’s existing developments.
Loss on Disposal:
The sale represents a loss on disposal of HK$1.5 million (US$192,000). Despite this, LET Group views it as an opportunity to realize its investment, focus on its existing businesses, and avoid further working capital injection into the subsidiary, which has been facing a loss-making situation and intense competition from online platforms.
Financial Situation of the Subsidiary:
The subsidiary reported losses of RMB 641,000 (US$87,775) in 2022 and RMB 2.3 million (US$314,950) through August 2023. The decision to sell the subsidiary aligns with LET Group’s strategy to offload less profitable assets and concentrate on the most profitable business segments.
LET Group’s sale of the subsidiary in mainland China is part of its strategy to optimize its business portfolio, focus on profitable ventures, and fund its ongoing developments in various regions, including the Philippines, Russia, and Vietnam.