Shanghai Pret Composites Co., Ltd. (SZSE:002324) agreed to acquire Hangzhou Xinyang Fine Chemical Co., Ltd., Qidong Jinmei Chemistry Co.,Ltd., Fujian Disheng Technology Co., Ltd., Hangzhou Disheng Import & Export Co., Ltd., and Ningbo Free Trade Zone Dikai Trade Co., Ltd. from Ningbo Dixin Meida Investment Partnership Enterprise (Limited Partnership), Pan Xingping, Wang Ying, Zhou Zhiqiang and Pan Xingjiang for CNY 1.1 billion on September 12, 2019. As per the transaction, Shanghai Pret Composites Co., Ltd. shall pay CNY 586.3 million in cash and remaining through issuance of 66.024 million shares. Shanghai Pret Composites Co., Ltd. shall pay CNY 210.82 million cash and 31.31 million shares to Pan Xingping, CNY 142.41 million in cash and 28.82 million shares to Wang Ying, CNY 2.233 million in cash and 0.66 million shares to Zhou Zhiqiang, CNY 1.769 million in cash and 0.523 million shares to Pan Xingjiang and CNY 15.853 million in cash and 4.691 million shares to Ningbo Dixin Meida Investment Partnership Enterprise (Limited Partnership). As on March 10, 2020, Shanghai Pret Composites Co., Ltd. shall pay CNY 695.5 million in cash and remaining through issuance of 78.32 million shares. Shanghai Pret Composites Co., Ltd. shall pay CNY 210.83 million cash, issued 31.32 million shares and 0.51 million bonds to acquire Pan Xingping, CNY 142.42 million in cash, 28.83 million shares and 0.47 million bonds to Wang Ying, CNY 2.25 million in cash, 0.66 million shares and issue 0.01 million bonds to Zhou Zhiqiang, CNY 1.77 million in cash, 0.52 million shares and 0.008454 million bonds to Pan Xingjiang and CNY 15.95 million in cash, 0.47 million shares and issue 0.08 million bonds to Ningbo Dixin Meida Investment Partnership Enterprise (Limited Partnership). Shanghai Pret Composites Co., Ltd. will issue shares or convertible bonds to raise the funds for financing the cash portion of consideration of the transaction.

For the period ended December 31, 2018, Qidong Jinmei Chemistry Co.,Ltd. has reported total assets of CNY 250.23 million, total liabilities of CNY 36.04 million, total equity of CNY 214.19 million, revenue of CNY 177.37 million, total profit of CNY 12.79 million and net profit of CNY 10.05 million, Fujian Disheng Technology Co., Ltd. has reported total assets of CNY 71.65 million, total liabilities of CNY 24.07 million, total equity of CNY 47.58 million, total and net loss of CNY 1.97 million, Hangzhou Disheng Import & Export Co., Ltd has reported total assets of CNY 82.61 million, total liabilities of CNY 64.66 million, total equity of CNY 17.95 million, revenue of CNY 136.69 million, total profit of CNY 1.08 million and net profit of CNY 0.85 million, Ningbo Free Trade Zone Dikai Trade Co., Ltd. has reported total assets of CNY 7.04 million, total liabilities of CNY 4.61 million, total equity of CNY 2.43 million, revenue of CNY 9.56 million, total profit of CNY 0.57 million and net profit of CNY 0.52 million and Hangzhou Xinyang Fine Chemical Co., Ltd. has reported total assets of CNY 98.12 million, total liabilities of CNY 15.02 million, total equity of CNY 83.09 million, revenue of CNY 144.98 million, total profit of CNY 20.57 million and net profit of CNY 14.77 million.

Transaction has been approved by internal decision-making body of Ningbo Dixin Meida Investment Partnership Enterprise (Limited Partnership), respective shareholders of Qidong Jinmei Chemistry Co.,Ltd., Fujian Disheng Technology Co., Ltd., Hangzhou Disheng Import & Export Co., Ltd., Ningbo Free Trade Zone Dikai Trade Co., Ltd., and Hangzhou Xinyang Fine Chemical Co., Ltd. and Board of Directors of Shanghai Pret Composites Co., Ltd. on September 12, 2019. The transaction is subject to approval from secondary directorate of Shanghai Pret Composites Co., Ltd., Approval from the Company's shareholders and China Securities Regulatory Commission. On August 7, 2020, China Securities Regulatory Commission reviewed the Shanghai Pret Composites acquisition of assets through the issuance of convertible bonds and shares and cash and raising of supporting funds in the 32nd Work Conference of 2020. According to the results, the Shanghai Pret Composites acquisition of assets through the issuance of convertible bonds and shares and cash and raising of supporting funds was not approved. Li Weimin, Quan Hongtao and Zeng Mingqian of China Dragon Securities Co., Ltd. acted as financial advisor, Chen Jie and Li Wenting of Shanghai Guangfa Law Firm acted as legal advisor, Cao Lei, Guo Jingyu and Guan Junjun of Zhonghua Certified Public Accountants LLP acted as accountant to Shanghai Pret Composites.