Baiwang Co., Ltd. (6657) has released supplemental information regarding a connected transaction involving a convertible loan agreement with Huanqiu Zhilian and Baiwangyun Overseas, as well as an associated capital increase. The company provided further insight into its valuation approach, selection of comparable companies, and due diligence processes.

The announcement explains that four comparable publicly listed companies operating in software and services were used—Aisino Co., Ltd., Fujian Boss Software Corp., Baiwang Co., Ltd. (6657) itself, and Servyou Software Group Co., Ltd.—following criteria including market focus and business operations in enterprise finance or tax digitalization. The valuation ultimately adopted a leading EV/S multiple, citing the Target Company’s start-up stage, high revenue growth projections, and unprofitability to date as reasons for excluding metrics such as P/E or EV/EBIT. The announcement also notes that selection of 2026 estimated revenues is based on signed backlog orders and a clear business model targeting government governance technology, tax compliance technology, and data fintech in Africa/Middle East and Asia/Pacific emerging markets.

Directors conducted legal and financial due diligence, including on-site visits and contract reviews, to verify revenue recognition and evaluate the Target Company’s structure, contracts, and finances. The company also highlighted its rationale for securing a Repurchase Option and Warrant in relation to future potential transactions. Additionally, Baiwang Co., Ltd. underscores that any subsequent use of these rights may constitute discloseable and/or connected transactions under applicable listing rules and would require compliance with relevant regulations.