Wuxi Life International Holdings Group Limited announced on 28 July 2026 that its indirect PRC subsidiary, Zhejiang Wuxi Information Technology Service Co., Ltd. (“Wuxi Information”), will enter into a set of variable interest entity (VIE) agreements with Nanjing Pingou Youxuan Technology Co., Ltd. (“OPCO”) and the Company’s controlling shareholder, Mr. Liu Guanzhou (“PRC Equity Owner”). The structure is intended to give the Group effective control of OPCO, the proposed operator of the forthcoming “Pingou” mobile application in mainland China.
“Pingou” is positioned as an integrated e-commerce and social-commerce platform offering six core services: (1) self-operated product sales, (2) third-party merchant marketplace, (3) livestreaming, (4) online community interaction and content sharing, (5) social-networking functions, and (6) advertising. Operating these businesses requires four licences—EDI, ICP, Multi-party Communication and Network Culture Operation—several of which restrict or prohibit foreign ownership. The VIE structure enables Wuxi Life to comply with PRC foreign investment rules while retaining economic benefits and operational control.
Key contracts include:
• Exclusive Business Cooperation Agreement – Wuxi Information becomes OPCO’s sole service provider, collecting service fees equal to 100% of OPCO’s net profit after tax; the term is open-ended and may be terminated only by Wuxi Information.
• Exclusive Purchase Right Agreement – Wuxi Information can acquire all OPCO equity and assets for a nominal HK$1 when PRC law permits, ensuring future ownership transfer flexibility.
• Equity Pledge Agreement – Mr. Liu pledges 100% of OPCO equity to Wuxi Information as security for all VIE obligations.
• Ancillary authorisation, confirmation and spouse undertaking letters – secure voting rights, succession arrangements and mitigate potential conflicts.
Upon execution, OPCO’s financials will be fully consolidated into Wuxi Life’s accounts under HKFRS 10.
Regulatory considerations:
• As OPCO is wholly owned by Mr. Liu—also Wuxi Life’s controlling shareholder—the VIE transactions constitute continuing connected transactions under Chapter 20 of the GEM Listing Rules.
• The Stock Exchange has granted waivers from the customary three-year term limit and annual cap requirements, subject to conditions including annual INED review, auditor confirmation and Independent Shareholder approval.
• An extraordinary general meeting will be convened; Mr. Liu and his associates must abstain from voting. An Independent Board Committee (all INEDs) and Merdeka Corporate Finance Limited have been appointed to advise Independent Shareholders.
Strategic rationale:
The VIE arrangement allows Wuxi Life to tap China’s fast-growing online retail and livestreaming sectors, secure multiple revenue streams and centralise user data and operations, while complying with PRC regulatory constraints. The Board believes the structure is “narrowly tailored” and in the best interests of the Company and all shareholders.