On March 4, Shanghai Haid Control System Co., LTD. (Stock code: 002184 Securities for short: HaID Control) disclosed the announcement on receiving the Shenzhen Stock Exchange to suspend the review of the company’s issuance of shares to purchase assets and raise matching funds. Hyd Controls intends to purchase 75% of Shanghai Xingzhida Automation Technology Co., Ltd. through the issuance of shares and the payment of cash, and at the same time, the Company intends to raise matching funds through the issuance of shares to not more than 35 qualified specified investors (hereinafter referred to as the “Reorganization”).

PM891K02 On February 29, 2024, the Company received a notice from the Shenzhen Stock Exchange that due to the expiration of the period of validity of the financial information recorded in the Company’s reorganization application documents, it needs to submit a supplementary submission, and the Shenzhen Stock Exchange suspended the review of the Company’s reorganization in accordance with the relevant provisions of the Review Rules for the Material Assets Reorganization of Listed Companies of the Shenzhen Stock Exchange.

Hyde Control said that the suspension of the audit will not have a material adverse impact on the company’s reorganization. The company is making every effort to coordinate the intermediary agencies to implement the extended audit and other related work, complete the financial information update as soon as possible and apply for the resumption of audit in a timely manner. The Company will fulfill the information disclosure obligation in a timely manner according to the progress of the matter.

It is worth noting that the reorganization of Haide Control still needs to PM891K02 be approved by the Shenzhen Stock Exchange, and the China Securities Regulatory Commission agrees to register the decision before it can be implemented. There is uncertainty as to whether the matter will pass the review and registration, and when it will eventually pass the review and registration.

On December 18, 2023, Haide Control announced that the company intends to purchase 75% of Xingzhida’s equity held by Shen Chang and other eight parties by issuing shares and paying cash, and the transaction consideration is determined to be 127,830.00 yuan. Of this, 26.40% of the transaction price was paid in cash and 73.60% was paid in the form of shares issued. The pricing base date of the issue of shares is the announcement date of the resolution of the tenth meeting of the eighth Board of Directors, and the final issue price is 11.66 yuan/share, and the total number of shares is 80,686,104.

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In addition, Hyde will also raise matching funds totaling not more than RMB 69,700.00 million, mainly for the payment of the cash consideration of the transaction and to supplement the company’s working capital. The performance of the target company is committed to a net profit of no less than 170 million yuan, 180 million yuan and 190 million yuan in the three fiscal years of 2023, 2024 and 2025, respectively. If the performance is not up to standard, the counterparty will pay compensation in the form of cash or shares. At the same time, if the performance of the target company is exceeded, the management team and core personnel will receive performance awards.

Prior to this transaction, Haide Control mainly carried out research and development, production and sales of hardware and software products, system integration and solutions mainly characterized by industrial automation control technology, industrial information technology and their integration technology. The business includes product solutions for equipment manufacturers, system solutions for intelligence in factories and infrastructure, and special equipment for new energy power using PM891K02 power electronics technology, which is also in the field of automation.

Xingzhida is a solution provider in the field of industrial automation, the main business includes industrial automation product sales business and industrial automation system integration business, downstream covering new energy vehicles, photovoltaic, consumer electronics, medical equipment and semiconductor and other advanced manufacturing industries.

After the completion of the acquisition, Haidel will effectively integrate the target company’s capacity reserves in products and supply chains, combine the target company’s market advantages and experience accumulation in manufacturing customers such as new energy vehicles, photovoltaic, consumer electronics, medical equipment and semiconductors, and realize the extension of the industrial automation industry service chain through the effective integration of technology research and development and market demand. Further enhance customer service capabilities to achieve complementary advantages. This transaction will deepen the positive impact of market dividends generated by the transformation and upgrading of domestic manufacturing on listed companies and target companies, form an amplification effect, and further enhance the main business operation capabilities of listed companies.