Hisense Home Appliances Group Co., Ltd. (ASX: HISENSE HA) has completed the transfer of its entire equity stake in Guangdong Kelon Jiake Electronics Co., Ltd., a move that raises questions about pricing fairness and the true nature of the transaction. The subsidiary, previously 82% owned by Hisense Home Appliances and 18% by Hisense Rongsheng (Guangdong) Refrigerator Co., Ltd., has now changed hands to natural person Hu Zhenyu and Guangxi Pilot Free Trade Zone Longyao Engineering Co., Ltd., with Longyao holding 90% and Hu holding 10%.

The equity transfer was actually executed in September 2025, yet the industrial and commercial registration change only took effect a year later. The company’s 2025 annual report briefly noted: "The Group transferred its 100% equity interest in Guangdong Kelon Jiake Electronics Co., Ltd. in September 2025, losing control from that point onward. The disposal consideration was 1 million yuan, with the Group's share of net assets at the loss-of-control date amounting to 333,600 yuan. The difference of 666,400 yuan was recorded as investment income for the period."

In simple terms, Hisense Home Appliances sold a subsidiary with a registered capital of 61 million yuan for just 1 million yuan, booking a modest 666,400 yuan gain. Kelon Jiake, however, is no ordinary entity—it has been a longstanding air-conditioning supplier to major state-owned telecom operators including China Mobile, China Tower, China Telecom, and China Unicom, with individual winning bids reaching tens of millions of yuan.

In 2025, China Mobile issued a large-scale air-conditioning procurement order worth 162.3 million yuan for 24,975 units. Kelon Jiake emerged as the biggest winner: it was the second-ranked candidate in Package 1 with a 23% share, and in Package 2—the largest in value—it secured first place with a bid of 62.196 million yuan, taking a 40% share. On August 8, 2025, in China Tower’s 2025 base station air-conditioning procurement, Kelon Jiake ranked third with a winning amount of 51.9533 million yuan, while fellow Hisense-affiliated Qingdao Hisense Network Energy Co., Ltd. took first place with 90.5426 million yuan.

Given annual winning bids exceeding 100 million yuan and a multi-year track record as a supplier to multiple central state-owned enterprises, the question of whether the 1 million yuan transfer price fairly reflects the subsidiary’s value remains unresolved. No details have been disclosed regarding the company’s annual revenue and net profit figures, nor whether any independent appraisal was conducted prior to the transaction.

What makes the deal even more puzzling is that despite the complete handover of control, the subsidiary’s key personnel and office address remain unchanged. Industrial and commercial records show Li Jia is still the legal representative, executive director, and manager of Kelon Jiake—a role she assumed on November 10, 2023, succeeding Sun Changchun. Li Jia also serves as a director of Qingdao Hisense Jinlong Holding Co., Ltd. and Qingdao Hisense Financial Investment Co., Ltd., and as a supervisor for several other Hisense-affiliated companies such as Qingdao Xixin Microelectronics Technology Co., Ltd. and Qingdao Hisense Laser Display Co., Ltd. Her career history includes roles as a finance department supervisor at Hisense Home Appliances Group, a supervisor at Hisense Group’s financial management department, deputy general manager of financial management at Guangdong Hisense Refrigerator Marketing Co., Ltd., and general manager of the finance department at Hisense Marketing Management Co., Ltd.

The supervisor of Kelon Jiake, Liang Hongtao, is likewise still a Hisense employee. Liang has held her supervisory position since 2018, even as the company’s leadership changed hands multiple times. She is also the third-largest contributor to a Hisense employee shareholding platform called Qingdao Yuan Yongxing Investment Center (Limited Partnership), with a subscribed capital contribution of 5.6331 million yuan, representing 5.5196%.

The transfer also did not alter the company’s registered office. Kelon Jiake remains at No. 8 Ronggang Road, Ronggui, Shunde District, Foshan—the same address as Hisense Rongsheng (Guangdong) Refrigerator Co., Ltd. and Kelon Tower. While the registration change updated the shareholders, business entity type, and business scope, the address stayed put.

On the acquiring side, Guangxi Pilot Free Trade Zone Longyao Engineering Co., Ltd., which took 90% of Kelon Jiake, is owned by three natural persons: Huang Xuanli (also the actual controller and legal representative), Shen Yi, and Zhang Conghai. Notably, after gaining control of Kelon Jiake, Longyao’s own equity structure shifted from Huang and Hu Zhenyu holding 99% and 1% respectively to Huang, Shen, and Zhang holding 48.7%, 37.8%, and 13.5%.

With a subsidiary that supplies air-conditioning to multiple central telecom operators and lands single deals worth tens of millions of yuan, why would Hisense Home Appliances offload it for just 1 million yuan? Why do Hisense employees continue to occupy the legal representative, manager, and supervisor roles after control has been fully ceded? Is this a genuine commercial transaction or a nominal transfer engineered to serve other purposes? Hisense Home Appliances’ handling of this deal leaves a trail of unanswered questions.