Zhongyeda Electric Co., Ltd. (SZSE:002441) signed an agreement to acquire 70% stake in Gongkong Network (Beijing) Information Technology Co., Ltd. from a group of sellers for CNY 210 million on June 3, 2015. Zhongyeda Electric will acquire 8.41 million shares of Gongkong Network (Beijing) Information Technology Co., Ltd. The group of sellers includes Zhejiang Paradise Silicon Valley Dawn Venture Investment Limited Company selling 11.11% stake for CNY 33.3 million. Sun Huixin will sell 42.18% stake, Ma Xiaogang will sell 4.76% stake, Pan Yingzhang will sell 5.55% stake, Miao Jianfeng will sell 2.3% stake, Li Xiaoyong will sell 1.76% stake and Zhao Qin will sell 2.34% stake.

After the transaction, Gongkong Network (Beijing) Information Technology Co., Ltd will operate as a subsidiary of Zhongyeda Electric, Sun Huixin will hold 17.3% stake, Ma Xiaogang will hold 3.17% stake, Pan Yingzhang will hold 2.38% stake, Miao Jianfeng will hold 1.66% stake, Li Xiaoyong will hold 3.21% stake and Zhao Qin will hold 1% stake. Zhongyeda Electric plans to use internal funds of CNY 210 million to fund the transaction.

Gongkong Network (Beijing) Information Technology Co., Ltd reported total assets of CNY 67.46 million, total liabilities of CNY 24.33 million, total shareholders' equity of CNY 43.13 million, revenues of CNY 40.86 million, operating profit of CNY 3.04 million and net profit of CNY 7.96 million in 2014. The transaction does not require the approval from the stockholders. The Board of Zhongyeda Electric approved the transaction on June 4, 2015.

As of June 24, 2015, Zhongyeda Electric Co., Ltd. has already made a total share transfer payment of CNY 79.41 million to Zhejiang Paradise Silicon Valley Dawn Venture Investment Limited Company and individuals Sun Huixin, Ma Xiaogang, Pan Yingzhang, Miao Jianfeng, Li Xiaoyong, Zhao Qin. Zhejiang Paradise Silicon Valley Dawn Venture Investment Limited Company transferring 1.34 million shares and Sun Huixin, Ma Xiaogang, Pan Yingzhang, Miao Jianfeng, Li Xiaoyong, Zhao Qin transferred 1.85 million shares. After the completion of the share transfer, Zhejiang Paradise Silicon Valley Dawn Venture Investment Limited Company will no longer owns any shares; the total stake owned by Sun Huixin, Ma Xiaogang, Pan Yingzhang, Miao Jianfeng, Li Xiaoyong, Zhao Qin is at 72.26%, with the Zhongyeda Electric Co., Ltd. owning a 26.47% stake. According to the provision of agreement, Sun Huixin, Ma Xiaogang, Pan Yingzhang, Miao Jianfeng, Li Xiaoyong, and Zhao Qin will transfer 5.23 million before January 31, 2016.

As on January 29, 2016, the second equity transfer to be completed before February 29, 2016. Should both parties are unable to complete the second equity transfer by said date, each party can sign an amended agreement revising the date of completion for the second equity transfer. As on February 3, 2016, Zhongyeda Electric Co Ltd partially completed the acquisition of 30.01% stake in gongkong (Beijing) Information Technology. The parties will complete the second equity transfer by installments with the final installment to be made on or before June 30, 2016. Should both parties are unable to complete the second equity transfer by said date, each party can sign an amended agreement revising the date of completion for the second equity transfer. As on March 7, 2016, Zhongyeda Electric Co Ltd partially completed the acquisition of 50.01% stake in gongkong (Beijing) Information Technology.