Shandong Xinhua Pharmaceutical Company Limited (SEHK:719) entered into a sale and purchase agreement to acquire 33% stake in Shandong Xinhua Wanbo Chemical Industrial Co., Ltd from Hualu Holding Co., Ltd for CNY 19.4 million on October 11, 2019. Under the terms of transaction, Shandong Xinhua Pharmaceutical Company Limited had paid CNY 2 million at the submission of the bidding application. The security deposit will be counted in and applied to set off part of the consideration. Shandong Xinhua Pharmaceutical Company Limited shall within 5 business days from the date of the agreement make a payment of CNY 17.4 million in cash one-off to the bank account. Upon completion, Shandong Xinhua Pharmaceutical Company Limited will hold 73% stake in Shandong Xinhua Wanbo Chemical Industrial Co., Ltd. Shandong Xinhua Pharmaceutical Company Limited will pay 1% of the consideration to Hualu Holding Co., Ltd as termination fee. For the year ended December 31, 2018, Shandong Xinhua Wanbo Chemical Industrial Co., Ltd had revenue of CNY 100.9 million, total assets of CNY 67.7 million, operating profit of CNY 6.1 million, net income of CNY 4.3 million and net assets of CNY 38.3 million. The transaction is subject to the consideration to Hualu Holding Co., Ltd will be paid upon approval of the competent authorities in respect of the supervision and administration of state-owned assets of People's Republic of China. The transaction has been approved by competent authorities in respect of the supervision and administration of state-owned assets of People's Republic of China. Chung Rui Assets Appraisal Co., Ltd. acted as valuer in the transaction. Shandong Xinhua Pharmaceutical Company Limited (SEHK:719) completed the acquisition of 33% stake in Shandong Xinhua Wanbo Chemical Industrial Co., Ltd from Hualu Holding Co., Ltd in October 2019.