Hubei Shengmu Technology Co., Ltd agreed to acquire Liuzhou Hongsheng Collagen Casing Co., Ltd. from Shenzhou Yiqiao Information Service Co., Ltd. (SZSE:000606) for approximately CNY 130 million on September 27, 2017. In related transactions, Shenzhou Yiqiao Information Service Co., Ltd. will sell stakes in Qinghai Mingjiao Company Limited, Qinghai Mingnuo Capsule Co., Ltd., and Guangdong Mingyang Gelatin Co., Ltd. As per the terms of the transaction, consideration will be paid as follows. Within seven working days after the agreement has been approved by the board of directors of Shenzhou Yiqiao Information Service Co., Ltd., Hubei Shengmu Technology Co., Ltd shall pay a 60% of the consideration to Shenzhou Yiqiao Information Service Co., Ltd and shall pay a 60% of the arrearage amount to Shenzhou Yiqiao Information Service Co, Ltd which shall be used as a guarantee. After the entry into force of this agreement, the aforesaid guarantee shall be automatically converted into the consideration for the equity transfer and the repayments of the arrears of the corresponding amount paid by Hubei Shengmu Technology Co., Ltd. After approval from the shareholders' meeting, Hubei Shengmu Technology Co will pay to Shenzhou Yiqiao extant 40% of the payment of arrearage before the transfer of the underlying equity . . At the same time, after the shareholders' general meeting but before the transfer of the underlying equity, Hubei Shengmu shall pay to Shenzhou Yiqiao follow-up arrears actually incurred to Shenzhou Yiqiao as of before September 1, 2017. If, before December 31, 2017, the transfer of equity occurs and Hubei Shengmu receives the "Investment Payment Payment Application" sent by Shenzhou Yiqiao Hubei Shengmu shall, before December 31 2017, pay the remaining 40% of the consideration for the equity transfer; If, before December 31, 2017, the transfer of equity does not occur, Hubei Shengmu shall, on the actual delivery date, receive the " Invest payment application" and pay within 5 working days the remaining 40% of the equity transfer consideration. For the year 2016, Liuzhou Hongsheng Collagen Casing Co., Ltd reported total assets of CNY 157.86 million, net assets of CNY 126.01 million, revenues of CNY 34.01 million and operating loss of CNY 1.09 million. On September 27, 2017, Hubei Shengmu Technology Co., Ltd. held the shareholders’ meeting and approved this transaction. On September 28, 2017, Shenzhou Yiqiao Information Service Co., Ltd. held the 13th session of the 7th directorate and approved this transaction. This transaction needs approval from the shareholders’ meeting of the Shenzhou Yiqiao Information Service Co., Ltd. The shareholders of Shenzhou Yiqiao Information Service Co., Ltd. approved the transaction during the 3rd extraordinary general meeting on November 22, 2017. Feng Henian and Du Cunbing of Minsheng Securities Co.,Ltd. acted as financial advisor, Wang Li, Guo Weifeng and Cao Qi of Beijing DHH Law Firm DeHeng Law Offices acted as legal advisor and Yangjiantao, Gu Renrong,Tong Chenglu, Zhao Xiumei and Yao Jihong of Ruihua Certified Public Accountants, LLP acted as an accountant for Shenzhou Yiqiao Information Service Co., Ltd. in the transaction. Liu Hong, Zheng Ming and Guo Xianyi of Wanlong (Shanghai) Assets Appraisal Co., Ltd. acted as appraiser in the transaction. Hubei Shengmu Technology Co., Ltd completed the acquisition of Liuzhou Hongsheng Collagen Casing Co., Ltd. from Shenzhou Yiqiao Information Service Co., Ltd. (SZSE:000606) on December 27, 2017.