Shanghai Kangheng Environment Co., Ltd. signed the agreement to acquire Guangdong Sitong Group Co., Ltd. (SHSE:603838) in a reverse merger transaction on August 22, 2018. Under the terms of the transaction, Guangdong Sitong Group Co., Ltd. intends to use its assets and liabilities in order to replace them with 100% stake of Shanghai Kangheng Environment Co., Ltd. The final price of the assets to be disposed in the transaction was CNY 802.1 million and the final price of the assets to be replaced was CNY 8.5 billion. The difference between the two amounting to CNY 7.7 billion will be satisfied by Guangdong Sitong Group Co., Ltd. through issuance of 851.54 million shares at CNY 9.04 per share. The controlling shareholder of Guangdong Sitong Group Co., Ltd. will change after the transaction. The final issue price and the transaction need to be approved by shareholders meeting of Guangdong Sitong Group Co., Ltd. and China Securities Regulatory Commission. A meeting of shareholders of Guangdong Sitong Group Co., Ltd. will be held on September 10, 2018 to discuss the transaction. As of September 5, 2018, the meeting of shareholders will be held on September 14, 2018. As of September 11, 2018, the meeting of shareholders will be held on September 19, 2018. The Board of Directors of Guangdong Sitong Group Co., Ltd. and shareholders of Shanghai Kangheng Environment Co., Ltd. approved the transaction on August 22, 2018. Kong Xiangxi, Cheng Yihong and Shao Jie of Huatai United Securities Co., Ltd. acted as the financial advisors, Tao Xudong and Xu Sheng’ao of Jun He Law Offices acted as the legal advisors, Hu Xuewen and Wu Zhou of Jiangsu Talent CPA Co., Ltd.and Liao Chaoli, He Chunhai and Wu Ruiling of ShineWing Certified Public Accountants Co., Ltd. acted as the accountants to Guang Dong Sitong Group Co., Ltd. Shanghai Kangheng Environment Co., Ltd. cancelled the acquisition of Guangdong Sitong Group Co., Ltd. (SHSE:603838) in a reverse merger transaction on March 5, 2019. The transaction is cancelled due to changes in market environment.