Fanhua Announces Execution of a Term Sheet to Acquire Majority Interests in Zhongrong Smart Finance Information Technology Co., Ltd.
November 24 2022 - 2:00AM
Fanhua Inc. (“Fanhua” or the “Company”) (Nasdaq: FANH), a leading
independent financial services provider in China, today announced
that it has signed a term sheet (the “Term Sheet”) with the
existing shareholders of Zhongrong Smart Finance Information
Technology Co., Ltd. (“Zhongrong”) to acquire 57.73% equity
interests of Zhongrong in an all-stock transaction. The transaction
is expected to be completed in January 2023, subject to certain
customary conditions, including completion of satisfactory due
diligence.
Pursuant to the Term Sheet, the proposed
transaction will involve the issuance of up to 62 million new
ordinary shares of Fanhua, representing 5.44% of its enlarged share
capital, in exchange for 57.73% of the equity interests of
Zhongrong.
Established in 2018, Zhongrong is a leading
managing general agency in China. Zhongrong offers life insurance
products through a network of nearly 300 non-affiliated regional
insurance agencies. In 2021, the gross written premiums of its life
insurance business reached RMB1.4 billion, of which the first-year
premiums were approximately RMB730 million.
Mr. Hu Yinan, Chairman and CEO of Fanhua,
commented on the proposed transaction, “With our experience and
resources accumulated in the past two decades, Fanhua is committed
to building a public infrastructure platform to support all types
of independent insurance intermediaries and independent agents to
operate and thrive under a unified compliance framework, by
providing them with access to a full spectrum of products and
services, leading technology and digital operation capacities,
professional training systems and services as well as capital
support.”
“As a leading managing general agency in China,
Zhongrong has unique advantages in compliance and quality
management. The acquisition of Zhongrong is expected to greatly
enhance the compliance and quality management capabilities of
Fanhua’s platform and rapidly increase our market influence. It
also marks an important step forward in accelerating the expansion
of our platform’s foothold, contributing to the sustainable,
high-quality growth of the life insurance agency channel in
China.”
About Fanhua Inc.
Fanhua Inc. is a leading independent financial
services provider. Through our online platforms and offline sales
and service network, we offer a wide variety of financial products
and services to individuals, including life and property and
casualty insurance products. We also provide insurance claims
adjusting services, such as damage assessments, surveys,
authentications and loss estimations, as well as value-added
services, such as emergency vehicle roadside assistance.
Our online platforms include: (i) Lan Zhanggui,
an all-in-one platform which allows our agents to access and
purchase for their policy holders a wide variety of insurance
products, including life insurance, auto insurance, accident
insurance, travel insurance and standard health insurance products
from multiple insurance companies on their mobile devices; (ii)
Baowang (www.baoxian.com), an online entry portal for comparing and
purchasing short term health, accident, travel and homeowner
insurance products and (iii) eHuzhu (www.ehuzhu.com), a non-profit
online mutual aid platform in China.
As of September 30, 2022, our distribution and
service network consisted of 697 sales outlets covering 23
provinces, autonomous regions and centrally-administered
municipalities and 100 service outlets covering 31 provinces.
For more information about Fanhua Inc., please
visit http://ir.fanhuaholdings.com/.
Forward-looking Statements
This press release contains statements of a
forward-looking nature. These statements, including the statements
relating to the Company’s future financial and operating results,
are made under the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these
forward-looking statements by terminology such as “will,”
“expects,” “believes,” “anticipates,” “intends,” “estimates” and
similar statements. Among other things, management’s quotations and
the Business Outlook section contain forward-looking statements.
These forward-looking statements involve known and unknown risks
and uncertainties and are based on current expectations,
assumptions, estimates and projections about Fanhua and the
industry. Potential risks and uncertainties include, but are not
limited to, those relating to its ability to attract and retain
productive agents, especially entrepreneurial agents, its ability
to maintain existing and develop new business relationships with
insurance companies, its ability to execute its growth strategy,
its ability to adapt to the evolving regulatory environment in the
Chinese insurance industry, its ability to compete effectively
against its competitors, quarterly variations in its operating
results caused by factors beyond its control and macroeconomic
conditions in China, future development of COVID-19 outbreak and
their potential impact on the sales of insurance products. Except
as otherwise indicated, all information provided in this press
release speaks as of the date hereof, and Fanhua undertakes no
obligation to update any forward-looking statements to reflect
subsequent occurring events or circumstances, or changes in its
expectations, except as may be required by law. Although Fanhua
believes that the expectations expressed in these forward-looking
statements are reasonable, it cannot assure you that its
expectations will turn out to be correct, and investors are
cautioned that actual results may differ materially from the
anticipated results. Further information regarding risks and
uncertainties faced by Fanhua is included in Fanhua’s filings with
the U.S. Securities and Exchange Commission, including its annual
report on Form 20-F.
For more information, please contact:
Investor Relations
Tel: +86 (20) 8388-3191
Email: qiusr@Fanhuaholdings.com
Source: Fanhua Inc.
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