Letong Chemical Co.,LTD (SZSE:002319) entered into a preliminary plan to acquire 100% stake in Zhejiang Qichen Technology Co., Ltd and 45% stake in Hunan Sunny Technology Engineering Co., Ltd. for approximately CNY 610 million on October 27, 2020. After appraisal, the appraised value of all shareholders' equity of Zhejiang Qichen is CNY 282 million. Based on the above evaluation results, after friendly negotiation between the parties to the transaction, the parties agreed to refer to the evaluation results to determine the price of CNY 275 million Out of which CNY 29 million was paid in cash and CNY 249 will be paid by issuing shares of 41,068,447. For Hunan Sunny Technology the purchase price is at CNY 230 million and the company will pay cash of CNY 131 million and issue 17,170,284 shares. Letong Chemical Co.,LTD (SZSE:002319) will acquire 100% stake in Zhejiang Qichen Technology Co., Ltd from Shenzhen Dacheng Asset Management Co., Ltd. and 7 individuals including Guo Hu and 45% stake in Hunan Sunny Technology Engineering Co., Ltd from University of South China and 27 individuals including Ge Yuhua for CNY 230 million. The stakes will be acquired through share issuance and cash payment. Consideration includes RMB 155.34 million in cash and issue of 54.66 million common shares. Zhejiang Qichen Technology Co., Ltd holds 55% stake in Hunan Sunny Technology Engineering Co., Ltd. Following the transaction, Letong Chemical Co.,LTD will directly and indirectly own 100% stake in Hunan Sunny Technology Engineering Co., Ltd. As of June 30, 2020, Zhejiang Qichen Technology Co., Ltd reported total assets and total owner's equity of CNY 54 million. For the year ended 2019, Zhejiang Qichen Technology Co., Ltd reported operating profit of CNY 6.6 million and net profit of CNY 6.6 million. As of June 30, 2020, Hunan Sunny Technology Engineering Co., Ltd. reported total assets of CNY 172.6 million and total owner's equity of CNY 111 million. For the year ended 2019, Hunan Sunny Technology Engineering Co., Ltd reported revenue of CNY 122.9 million and net profit of CNY 29.2 million. The transaction plan has been reviewed and approved at the 11th meeting of the fifth board of directors of the listed company and the 10th meeting of the fifth board of supervisors, This transaction has been approved in principle by the Hunan Provincial Department of Education. The transaction needs to be approved by the shareholders' meeting of the listed company, China Securities Regulatory Commission and other regulatory authority. As of June 29, 2021, the transaction was approved by Letong's first extraoridnary general meeting of shareholders. As of September 16, 2022, the Merger, Acquisition and Reorganization Examination Committee of Listed Companies of the CSRC reviewed the Letong Chemical Co., Ltd.'s acquisition of assets through the issuance of shares and cash and raising of supporting funds in the 15th Work Conference of 2022. According to the results, the Letong Chemical Co., Ltd.'s acquisition of assets through the issuance of shares and cash and raising of supporting funds was not approved.

Lai Changyuan and Xu Haiping of JZ Securities Co., Ltd acted as financial advisor, Luo Yuan and Zhang Lidan, Wang Liming of Shu Jin Law Firm and Liu Mingxue, Yang Gaoke of Moore Stephens Da Hua acted as accountant to Letong Chemical Co., Ltd in transaction.

Letong Chemical Co.,LTD (SZSE:002319) cancelled the acquisition of 100% stake in Zhejiang Qichen Technology Co., Ltd and 45% stake in Hunan Sunny Technology Engineering Co., Ltd. on January 30, 2023.