HongkeXue (CEO of SkyPeople) stated that acquisition of Quangouting was an important step for the company and will lead a diverse business.
SkyPeople Fruit Juice, Inc. (NASDAQ: SPU) (“SkyPeople” or “the Company”), a producer of fruit juice concentrates, fruit juice beverages and other fruit-related products, today announced that on March 13, 2017, the Board of Directors approved Future World Trading (Hong Kong) Limited’s, a wholly owned subsidiary of the company, acquisition of Shaanxi Quangoutong E-commerce Inc. (“Quangoutong”), an e-commerce company and a wholly owned subsidiary of SkyPeople International Holdings Group Limited, which is the major shareholder of the Company. The relevant agreement was signed on March 16, 2017. Quangoutong owns certain permits and licenses from local governments in China to conduct certain on-line financial service businesses in China. The purchase price for Quangoutong will be nominal as it has divested itself of several of its traditional businesses and all of its assets and debts. The FinTech industry is an emerging sector that utilizes computer programs and innovative technology to support the delivery of payment and financial services.
“The acquisition of Quangoutong is an important strategic move for the Company as it is based on the Company’s development plan, which is to diversify our business to include lighter asset businesses in addition to our more capital intensive operations,” said Mr. Hongke Xue, Chief Executive Officer of SkyPeople. “We believe that a healthy flow of capital is essential to all modern enterprises, and our entry into the FinTech space is intended to strengthen our own business, reinforce and develop strong partnering collaborations and capitalize upon an emerging high technology sector.”
The Company believes that the acquisition of Quangoutong will bring an innovative business development and sales model to SkyPeople, including a rewards points system that has cooperation agreements with other alliances. The reward points systems can be applied to SkyPeople’s subsidiaries, including but not limited to Hedetang, its consumer fruit juice products business, and Hede Jiachuan, its food products concern. The Company also plans to use Quangoutong to apply online third party payment license with Chinese government to upgrade our distribution and sale system to better integrate internet and our traditional business.
SkyPeople also believes that it will benefit from Quangoutong’s advanced sales model such as its large-scale product customization business, which is designed to facilitate strategic cooperation among companies and platforms, and in so doing, to boost sales. Meanwhile, the Company will continue to develop its risk control and operation standardization processes in the FinTech industry and will work to improve and advance its competitive positioning in the space.