Addentax Group Acquires Stake in Fresh Food Marketing Firm
SHENZHEN, China – January 13, 2025 – Addentax Group Corp. (NASDAQ: ATXG), an integrated service provider, has announced a strategic investment in Well Information Technology Corporation. The Company acquired a 2.5% equity stake in Well InfoTech for $750,000 in cash.
The investment consists of 3,750,000 common shares in Well InfoTech, a Nevada-incorporated company headquartered in Hangzhou, China. Well InfoTech specializes in providing comprehensive marketing solutions, both online and offline, for the fresh food industry.
Market Focus
Well InfoTech primarily serves fresh food store owners and management personnel across major Chinese cities including Hangzhou, Beijing, and Heilongjiang. Their focus is on enhancing visibility and profitability for fresh food businesses through digital tools and traditional marketing techniques.
This investment marks a departure from Addentax’s core businesses of garment manufacturing and logistics, signaling a strategic move into the rapidly digitalizing fresh food retail market in China. Addentax’s management believes that their investment in Well InfoTech will give the company access to a high-growth sector. However, the investment has resulted in mixed reactions from financial analyst. Some positives for the deal is the strategic nature of the investment in a growing sector, as well as the company’s strong liquidity position. Conversely, the deal has a number of negatives, including the minority stake acquired by the company, which provides little control over the operations of the firm. Additionally, financial industry professionals feel the valuation of Well InfoTech is too high, with the cost paid by Addentax being a significant capital allocation for the company relative to it’s market cap, which could strain the company’s financial flexibility.
This deal is subject to risks, including the company’s ability to realize some or all of the benefits from the purchase of the shares. Investors should also be aware of the risks and uncertainties presented as detailed in Addentax’s filings with the U.S. Securities and Exchange Commission.
About Addentax Group Corp.
Addentax Group Corp. is an integrated service provider specializing in garment manufacturing, logistics services, and property management and subleasing.
Forward-Looking Statements
This report contains forward-looking statements. These statements are based on current expectations and projections about future events. Actual results may differ materially.
