[Abstract] On the evening of November 8, 2023, Guomao Shares, the general reducer industry leader located in Wujin District, Changzhou, announced that it intends to acquire 65% of the equity of Motuo Intelligent Transmission (Jiangsu) Co., Ltd. with 200 million yuan in cash, and the company has signed the “Equity transfer Intention Agreement” with relevant parties.

Modori Transmission was established in August 2014, located in Qidong, Jiangsu Province, the main business is precision planetary reducer research and development, production and sales.

Precision planetary reducer is usually used with servo motors, widely used in laser cutting machines, CNC machine tools, robots/manipulators, lithium battery equipment, photovoltaic equipment, printing equipment and other high-end equipment fields.

After years of technology development and process accumulation, Modoli transmission has mature and advanced high-precision planetary reducer production technology and process plan.

In 2016, Modoli set up a French joint venture company, Reckon Drives International, to promote its products to overseas high-end customers.

PCI-5154

Modoli Transmission attaches great importance to technological innovation and R&D investment, and has been rated as a high-tech enterprise, a small giant enterprise in Nantong City, and a small and medium-sized enterprise in Jiangsu Province.

The performance commitment period set by the transaction will be three consecutive fiscal years from 2023 to 2025. The counterparty promises that the accumulated net profit of the target company in 2023, 2024 and 2025 shall not be less than 21 million yuan, 44 million yuan and 72 million yuan respectively.

The announcement shows that if the equity transfer is completed, Guomao shares will further improve the general reducer product series, and quickly enter the field of precision planetary reducer with the help of Motuo, and increase the layout in the downstream laser cutting machine, CNC machine tools, robots/manipulators and other industrial automation fields.

At the same time, the target company’s products and the company’s existing business, especially the harmonic reducer business, have a certain synergistic effect in the industry, which is conducive to strengthening the industrial interaction with downstream customers. In addition, the company’s existing mature marketing network is conducive to the future business development of the target company.