Hongyang-KY (Supplementary Announcement): Subsidiary Yangzhou Hongyang Board Resolution to Acquire Equity
Hongyang-KY's subsidiary, Yangzhou Hongyang Technology Development Co., Ltd., announced its board resolution to acquire 100% equity of Yangzhou Hongyu Electronic Technology Co., Ltd. from a related party for RMB 88.18 million. The acquisition aims to secure production facilities, eliminate rental risks, and reduce long-term rental expenses, reinforcing business stability.
📋 Article Processing Timeline
- 📰 Published: August 14, 2025 at 09:00
- 🔍 Collected: May 9, 2026 at 08:00 (6431h 0m after Published)
- 🤖 AI Analyzed: May 9, 2026 at 08:16 (16 min after Collected)
1. Type of merger and acquisition (e.g., merger, division, acquisition, or share transfer): Acquisition
2. Date of occurrence of the event: 114/8/14
3. Name of participating M&A company (e.g., merging with another company, newly established company after division, name of company whose shares are acquired or transferred): Yangzhou Hongyu Electronic Technology Co., Ltd.
4. Transaction counterparty (e.g., another merging company, company transferred after division, transaction target for acquiring or transferring shares): Fang Xinyi (100% shareholder of Hongyu Electronic Technology Co., Ltd.)
5. Is the transaction counterparty a related party: Yes
6. Relationship between the transaction counterparty and the company (e.g., invested company with XX% shareholding by our company), and explain the reason for selecting the related party as the target for acquisition or share transfer, and whether it affects shareholder rights: The transaction counterparty is a company director (100% shareholder of Hongyu Electronic Technology Co., Ltd.); the reason for selecting a related party as the acquisition target is that the company holds land and buildings for a production base, which can eliminate the risk of future rental interruptions. Furthermore, the transaction price was determined with reference to expert opinions. It is assessed that it can reduce rental expenses and stabilize operations in the long term, thus having no significant adverse impact on shareholder rights.
7. Purpose and conditions of the M&A, including reasons for M&A, consideration conditions, and payment timing (Note 7): To effectively reduce or eliminate the risk of production interruption and consider the needs of the company's sustainable development, our company's subsidiary Yangzhou Hongyang intends to purchase 100% equity of Hongyu Electronic from related party Ms. Fang Xinyi, and dissolve the company after the equity transfer. Our company's subsidiary Yangzhou Hongyang Technology Development Co., Ltd. resolved by board resolution to purchase shares at a price not exceeding RMB 90 million; it intends to negotiate with Ms. Fang Xinyi to use the demolition compensation as a down payment and contract payment, and pay the remaining equity acquisition price in installments with its own funds over a period of five years; and will report to the general company's board of directors on August 26, 114, and execute related operations after the extraordinary shareholders' meeting resolution on September 15, 114.
According to the above relevant resolution conditions, the supervisor representative of our company's subsidiary Yangzhou Hongyang Technology Development Co., Ltd. and related party Ms. Fang Xinyi signed the equity transfer agreement on September 18, 114, for a total price of RMB 88.18 million.
The first installment, totaling RMB 55 million, will be paid from the remaining demolition compensation obtained from Huaixi Town; and subsequent installments will be paid in equal portions over five years starting from the next month after the first installment is completed, with interest added at an annual rate of 2.5%.
8. Expected benefits after M&A: Eliminating the risk of production interruption is the main benefit of this transaction. After this transaction is approved, our company will obtain the land use rights of approximately 60 mu originally owned by Hongyu Electronic and the ownership of its above-ground buildings of approximately 60,000 square meters. Through legal ownership, we avoid the risk of production interruption due to lease expiration or the landlord selling land and buildings. Furthermore, obtaining ownership can reduce monthly rental expenses, and after the 5-year deferred payment period, no rental expenses will be incurred, which will positively contribute to the company's long-term sustainable operations.
9. Impact of M&A on net value per share and earnings per share: Short-term impact assessment: This case belongs to organizational restructuring under common control. Since the consideration paid is higher than the book value of Hongyu Electronic's net assets, the difference has reduced retained earnings, slightly decreasing net value per share. After this M&A, the rental expenses originally paid by the subsidiary and the rental income of the acquired company will be fully offset in the consolidated financial statements, and depreciation expenses for the acquired assets and interest expenses for the installment payments of this M&A price will be recognized instead; because the original rental expenses and the new depreciation and interest have a substitution effect, there is no significant adverse impact on earnings per share in the short term.
Long-term impact assessment: After the five-year installment payment period, there will be no related interest expenses. After the production base's land and buildings become self-owned, in addition to strengthening the stability of the production base, it can also avoid the risk of future lease expiration and rent increases; furthermore, the idle portion of the real estate acquired in this M&A already generates rental income, which will have a positive impact on both net value per share and earnings per share in the long term.
10. Type of M&A consideration and source of funds: The first installment of RMB 55 million will be paid from the remaining demolition compensation; and after the first installment is completed, subsequent installments will be paid with self-owned funds in equal portions over five years starting from the next month, with interest added at an annual rate of 2.5%.
11. Share exchange ratio and its calculation basis: Not applicable
12. Is there an unreasonable opinion from an accountant, lawyer, or securities underwriter for this transaction: No
13. Name of accounting firm or law firm or securities underwriter: Yangzhou Hanrui Certified Public Accountants (General Partnership)
14. Name of accountant or lawyer: Qin Yongjun, Chang Zhihui
15. Accountant or lawyer's practicing certificate number: Approval document for establishment: Su Cai Hui [2012] No. 37; Accounting firm number: 32100036
16. Independent expert's opinion on the reasonableness of the share exchange ratio, cash, or other assets distributed to shareholders for this M&A (I. Including the method, principles, or calculation methods used to determine the public acquisition price and comparison with internationally common market value method, cost method, and discounted cash flow method. II. Comparison of the acquired company's financial status, profitability, and price-earnings ratio with listed peers. III. If the public acquisition price refers to the valuation report of a valuation institution, the content and conclusions of the valuation report should be explained. IV. If the acquirer's financing repayment plan uses the assets or shares of the acquired company or the surviving company after merger as collateral, the impact assessment on the financial and business soundness of the acquired company or the surviving company after merger should be explained) (Note 7): 1. Since the assets and liabilities of the evaluated company can be reasonably identified according to accounting policies, business operations, etc., appropriate and specific valuation methods can be selected for each asset and liability during the valuation process, and the operating conditions for implementing these valuation methods are met. This valuation can choose the asset-based approach. According to the purpose of this valuation and the characteristics of the valuation object, as well as the applicable conditions of the valuation method, the asset-based approach is selected for valuation. 2. The evaluated company has been established since November 3, 2014, to date. Keywords: Material Information
2. Date of occurrence of the event: 114/8/14
3. Name of participating M&A company (e.g., merging with another company, newly established company after division, name of company whose shares are acquired or transferred): Yangzhou Hongyu Electronic Technology Co., Ltd.
4. Transaction counterparty (e.g., another merging company, company transferred after division, transaction target for acquiring or transferring shares): Fang Xinyi (100% shareholder of Hongyu Electronic Technology Co., Ltd.)
5. Is the transaction counterparty a related party: Yes
6. Relationship between the transaction counterparty and the company (e.g., invested company with XX% shareholding by our company), and explain the reason for selecting the related party as the target for acquisition or share transfer, and whether it affects shareholder rights: The transaction counterparty is a company director (100% shareholder of Hongyu Electronic Technology Co., Ltd.); the reason for selecting a related party as the acquisition target is that the company holds land and buildings for a production base, which can eliminate the risk of future rental interruptions. Furthermore, the transaction price was determined with reference to expert opinions. It is assessed that it can reduce rental expenses and stabilize operations in the long term, thus having no significant adverse impact on shareholder rights.
7. Purpose and conditions of the M&A, including reasons for M&A, consideration conditions, and payment timing (Note 7): To effectively reduce or eliminate the risk of production interruption and consider the needs of the company's sustainable development, our company's subsidiary Yangzhou Hongyang intends to purchase 100% equity of Hongyu Electronic from related party Ms. Fang Xinyi, and dissolve the company after the equity transfer. Our company's subsidiary Yangzhou Hongyang Technology Development Co., Ltd. resolved by board resolution to purchase shares at a price not exceeding RMB 90 million; it intends to negotiate with Ms. Fang Xinyi to use the demolition compensation as a down payment and contract payment, and pay the remaining equity acquisition price in installments with its own funds over a period of five years; and will report to the general company's board of directors on August 26, 114, and execute related operations after the extraordinary shareholders' meeting resolution on September 15, 114.
According to the above relevant resolution conditions, the supervisor representative of our company's subsidiary Yangzhou Hongyang Technology Development Co., Ltd. and related party Ms. Fang Xinyi signed the equity transfer agreement on September 18, 114, for a total price of RMB 88.18 million.
The first installment, totaling RMB 55 million, will be paid from the remaining demolition compensation obtained from Huaixi Town; and subsequent installments will be paid in equal portions over five years starting from the next month after the first installment is completed, with interest added at an annual rate of 2.5%.
8. Expected benefits after M&A: Eliminating the risk of production interruption is the main benefit of this transaction. After this transaction is approved, our company will obtain the land use rights of approximately 60 mu originally owned by Hongyu Electronic and the ownership of its above-ground buildings of approximately 60,000 square meters. Through legal ownership, we avoid the risk of production interruption due to lease expiration or the landlord selling land and buildings. Furthermore, obtaining ownership can reduce monthly rental expenses, and after the 5-year deferred payment period, no rental expenses will be incurred, which will positively contribute to the company's long-term sustainable operations.
9. Impact of M&A on net value per share and earnings per share: Short-term impact assessment: This case belongs to organizational restructuring under common control. Since the consideration paid is higher than the book value of Hongyu Electronic's net assets, the difference has reduced retained earnings, slightly decreasing net value per share. After this M&A, the rental expenses originally paid by the subsidiary and the rental income of the acquired company will be fully offset in the consolidated financial statements, and depreciation expenses for the acquired assets and interest expenses for the installment payments of this M&A price will be recognized instead; because the original rental expenses and the new depreciation and interest have a substitution effect, there is no significant adverse impact on earnings per share in the short term.
Long-term impact assessment: After the five-year installment payment period, there will be no related interest expenses. After the production base's land and buildings become self-owned, in addition to strengthening the stability of the production base, it can also avoid the risk of future lease expiration and rent increases; furthermore, the idle portion of the real estate acquired in this M&A already generates rental income, which will have a positive impact on both net value per share and earnings per share in the long term.
10. Type of M&A consideration and source of funds: The first installment of RMB 55 million will be paid from the remaining demolition compensation; and after the first installment is completed, subsequent installments will be paid with self-owned funds in equal portions over five years starting from the next month, with interest added at an annual rate of 2.5%.
11. Share exchange ratio and its calculation basis: Not applicable
12. Is there an unreasonable opinion from an accountant, lawyer, or securities underwriter for this transaction: No
13. Name of accounting firm or law firm or securities underwriter: Yangzhou Hanrui Certified Public Accountants (General Partnership)
14. Name of accountant or lawyer: Qin Yongjun, Chang Zhihui
15. Accountant or lawyer's practicing certificate number: Approval document for establishment: Su Cai Hui [2012] No. 37; Accounting firm number: 32100036
16. Independent expert's opinion on the reasonableness of the share exchange ratio, cash, or other assets distributed to shareholders for this M&A (I. Including the method, principles, or calculation methods used to determine the public acquisition price and comparison with internationally common market value method, cost method, and discounted cash flow method. II. Comparison of the acquired company's financial status, profitability, and price-earnings ratio with listed peers. III. If the public acquisition price refers to the valuation report of a valuation institution, the content and conclusions of the valuation report should be explained. IV. If the acquirer's financing repayment plan uses the assets or shares of the acquired company or the surviving company after merger as collateral, the impact assessment on the financial and business soundness of the acquired company or the surviving company after merger should be explained) (Note 7): 1. Since the assets and liabilities of the evaluated company can be reasonably identified according to accounting policies, business operations, etc., appropriate and specific valuation methods can be selected for each asset and liability during the valuation process, and the operating conditions for implementing these valuation methods are met. This valuation can choose the asset-based approach. According to the purpose of this valuation and the characteristics of the valuation object, as well as the applicable conditions of the valuation method, the asset-based approach is selected for valuation. 2. The evaluated company has been established since November 3, 2014, to date. Keywords: Material Information