Tangshan Jinkong Industry Incubator Group Co., Ltd. signed an equity transfer agreement to acquire 26% stake in Shanghai KangDa New Materials Co., Ltd. (SZSE:002669) from Lu Qiting, Xu Hongshan and Chu Wenbin for approximately CNY 860 million on November 4, 2018. The offer per share is CNY 13.7. Lu Qiting held 37.5 million shares and will transfer 30.5 million shares, Xu Hongshan held approximately 27 million and will transfer 21.9 million shares and Chu Wenbin held 12.6 million shares and will transfer 10.2 million shares of Shanghai KangDa New Materials Co., Ltd. Under the terms of the agreement, Lu Qiting, Xu Hongshan and Chu Wenbin undertake that, under the premise that Tangshan Jinkong Industry Incubator Group Co., Ltd. does not interfere with the normal operation of Shanghai KangDa New Materials Co., Ltd., it will continue to operate on the basis of the existing business policies, plans, models and management teams. The audited net profit of Shanghai KangDa New Materials Co., Ltd. should be in 2018 and 2019 which is the performance commitment period, respectively, CNY 100 million and CNY 140 million. As of the November 4, 2018, Tangshan Jinkong Industry Incubator Group Co., Ltd. has already created a co-management account and has remitted an advance payment of CNY 150 million. Within 3 days since delivery of underlying equity of Shanghai KangDa New Materials Co., Ltd., a total of CNY 644.2 million will be paid, within 3 days since the organizational structure and personnel adjustments stipulated in the agreement are completed and Tangshan Jinkong Industry Incubator Group Co., Ltd. provides the complete tax payment certificate for all taxes such as personal income tax payable by Lu Qiting, Xu Hongshan and Chu Wenbin for the transfer of the shares, a total of CNY 128.8 million will be paid, the remaining 10% of the share transfer price, which is CNY 85.9 million shall be deemed as performance guarantee payment of Lu Qiting, Xu Hongshan and Chu Wenbin in regard to the commitments and obligations stated under the agreement. If Lu Qiting, Xu Hongshan and Chu Wenbin have not violated the obligations, representations, guarantees and commitments under this agreement, Tangshan Jinkong Industry Incubator Group Co., Ltd. shall in the last year of the performance commitment period referred to in the agreement (i.e. 2019), issue the performance guarantee payment within 3 working days after the corresponding audit firm has issued a standard unqualified audit report confirmed by Lu Qiting, Xu Hongshan and Chu Wenbin. The deal is subject to military affairs review procedures, approval of the State Administration for Science, Technology and Industry for National Defence, confirmation of no objection by Shenzhen Stock Exchange. As on November 2, 2018, the State-owned Assets Supervision and Administration Commission of Hebei Province issued approval for the deal. November 4, 2018.Tangshan Jinkong Industry Incubator Group Co., Ltd. completed the acquisition of 26% stake in Shanghai KangDa New Materials Co., Ltd. (SZSE:002669) from Lu Qiting, Xu Hongshan and Chu Wenbin on January 10, 2019.