Listed on: Shenzhen Stock
Stock Code：300277 Stock ID：Hirisun Exchange (SZSE)
Listed on: Shenzhen Stock
Stock Code：200771 Stock ID：Hangqilun B Exchange (SZSE)
Plan for Hangzhou Hirisun Technology Inc.
Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Acquirer Acquiree
Hangzhou Hirisun Technology Incorporated.
Hangzhou Turbine Power Group Co., Ltd.
Building 1, No. 608, Kangxin Road,
Room 206-6, Dongqing Building, No. 60, Qingchun
Linping District, Hangzhou City, Zhejiang
Road, Gongshu District, Hangzhou City, Zhejiang Province
Province
November 2024
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Statement
I. The M&A Parties and all directors, supervisors and senior executives thereof give a pledge on
the authenticity, accuracy and integrity of the plan and abstract thereof, and bear legal liability for
false records, misleading statements or major omissions therein, if any.
II. Till the signing date of the plan, all the work in connection with the transaction is yet to
complete, and some data concerned in the plan are not audited by an accounting firm prescribed
by the Securities Law. So discrete use of relevant information is advised for investors. Boards and
all board members of Hirisun and HTC give a pledge on the authenticity and rationality of
relevant data cited from the plan. Upon the completion of all the transaction-related work, Hirisun
and HTC shall otherwise convene a board meeting, to deliberate on other unsettled matters
regarding the transaction and prepare a report on stock-for-stock merger. Meanwhile, they shall
perform relevant procedures for board deliberation. The audited historical financial data, financial
data for reference and valuation will be disclosed in the report on stock-for-stock merger.
III. The dominant shareholders and all directors, supervisors and senior executives of the M&A
Parties make a commitment, If the transaction is investigated by judicial authorities or investigated
by the China Securities Regulatory Commission due to the suspected false records, misleading
statements or major omissions in the information disclosed or provided by the company/person,
before the conclusion of the investigation, the company/person shall not transfer the shares
directly and indirectly owned by Hailianxun and Hangqilun, and shall submit the written
application for suspension of transfer and the stock account to the board of directors of Hailianxun
and Hangqilun within two trading days after receiving the notice of investigation, and the board of
directors of Hailianxun and Hangqilun shall apply for locking on behalf of the company/person to
the stock exchange and securities registration and settlement institution; if the locking application
is not submitted within two trading days, the board of directors of Hailianxun and Hangqilun shall
be authorized to directly report the company/person’s identity information and account
information to the stock exchange and securities registration and settlement institution after
verification and apply for locking; if the board of directors of Hailianxun and Hangqilun fails to
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
report the company/person’s identity information and account information to the stock exchange
and securities registration and settlement institution, the stock exchange and securities registration
and settlement institution shall be authorized to directly lock the relevant shares. If the
investigation conclusion finds that there are illegal and irregular circumstances, the
company/person promises to lock the shares voluntarily for the compensation arrangement of
relevant investors.
IV. Upon the completion of the transaction, the Surviving Company shall be solely held
accountable for any changes to their operations and revenues, while investment risks thus incurred
shall be borne by investors. The investors shall consult with their own stock brokers, attorneys,
accountants or other advisors, if they have any questions about the plan and abstract thereof.
V. The transaction-related matters stated in the plan and abstract thereof do not represent
substantial judgment, acknowledgment or approval of the CSRC, SZSE and other regulators on
the transaction-related matters; nor shall they indicate the pledge of the CSRC and SZSE on the
authenticity, accuracy or integrity on the plan and abstract thereof. The validation and completion
of the transaction-related matters specified in this plan and abstract thereof are yet to be verified,
approved or registered by the boards of the M&A Parties, SZSE, CSRC and other approval
authorities. . Any decisions or opinions made by the approval authorities regarding the
transaction-related matters are not indicative of substantial judgment or guarantee on the value of
investment or return of investors from shares of the M&A Parties or the Surviving Company.
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Contents
Statement..........................................................................................................................
Contents ...........................................................................................................................
Definitions........................................................................................................................
Notification of Material Matters ......................................................................................
Notification of Major Risks .............................................................................................
Chapter I Overview of Transaction..................................................................................
Chapter II Acquirer's Basic Information ..........................................................................
Chapter III Acquiree's Basic Information ........................................................................
Chapter IV Particulars of Transaction Agreement ...........................................................
Chapter V Risk Factors ....................................................................................................
Chapter VI Miscellaneous................................................................................................
Chapter VII Opinions of Independent Directors and Related Service Providers about
the Transaction .................................................................................................................
Chapter VIII Statement and Commitment .......................................................................
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Definitions
In this plan, unless otherwise specified, terms below are defined as follows:
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of
Plan, this Plan Refers to Hangzhou Turbine Power Group Co., Ltd. & Related Party
Transaction
Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of
Report of Stock-for-stock
Refers to Hangzhou Turbine Power Group Co., Ltd. & Related Party
Merger
Transaction
Hangzhou Hirisun Technology Inc., formerly known as Shenzhen
Acquiring Party, Acquirer,
Refers to Hirisun Technology Inc., Shenzhen Hirisun Technology Co., Ltd.,
Hirisun
Hirisun Information Network Technology (Shenzhen) Co., Ltd.
Acquired Party, Acquiree, Hangzhou Turbine Power Group Co., Ltd. , formerly known as
Refers to
HTC Hangzhou Turbine Co., Ltd.
M&A Parties, Parties Refers to Hirisun and HTC
Stock-for-stock Merger,
The transaction in which Hirisun issues A-shares to all HTC
Merger, Restructuring, Refers to
shareholders, for the purpose of stock-for-stock merger of HTC
Transaction
Hirisun upon the completion of stock-for-stock merge，The surviving
Surviving Company Refers to
company will subsequently change its company name
Hangzhou Capital Refers to Hangzhou State-owned Capital Investment and Operation Co., Ltd.
Hangzhou Financial
Refers to Hangzhou Financial Investment Group Co., Ltd.
Investment (HFI)
State-owned Assets
Supervision and State-owned Assets Supervision and Administration Commission of
Refers to
Administration Hangzhou Municipal Government
Commission of Hangzhou
Hangzhou Turbine Co., Ltd., formerly known as Hangzhou Turbine
Turbine Holdings Refers to Power Group Co., Ltd., and Hangzhou Turbine Power (Group) Co.,
Ltd.
Hangzhou Steam Turbine Machinery Equipment Co., Ltd. (HTM), a
Machinery Company Refers to
subsidiary within merger range of HTC
All shareholders registered at Shenzhen Branch of China Securities
Stock-for-stock
Refers to Depository and Clearing Corporation Limited (CSDC) after closing
Shareholders or Targets
on the date of record of stock-for-stock merger
The act in which shareholders proportionally convert HTC shares held
Stock-for-stock Refers to
into A-shares issued by Hirisun for the stock-for-stock merger
Hirisun shareholders who give valid dissenting votes against
Hirisun’s Dissenting
Refers to proposals of the merger plan and proposals of the merger agreement
Shareholders
made by and between the parties at the Hirisun shareholders’ meeting
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
convened for the voting of the stock-for-stock merger, and retain
shares with the right to dissent till the date of exercising the right of
claim for acquisition, while carrying out relevant declaration
procedures within the prescribed timeframe
HTC shareholders who give valid dissenting votes against proposals
of the merger plan and proposals of the merger agreement made by
and between the parties at the HTC shareholders’ meeting convened
HTC’s Dissenting
Refers to for the voting of the stock-for-stock merger, and retain shares with the
Shareholders
right to dissent till the date of exercising the cash-based option, while
carrying out relevant declaration procedures within the prescribed
timeframe
The right conferred to HTC’s dissenting shareholders in the
stock-for-stock merger. HTC’s dissenting shareholders that declare
Right of Claim for
Refers to exercising the right may require the provider of cash-based option to
Acquisition
be transferred HTC’s shares in whole or part within period of
declaration, by means of cash
The right conferred to HTC’s dissenting shareholders in the
stock-for-stock merger. HTC’s dissenting shareholders that declare
Cash-based Option Refers to exercising the right may require the provider of cash-based option to
be transferred HTC’s shares in whole or part within period of
declaration, by means of cash
Hangzhou Capital shall grant Hirisun’s dissenting shareholders the
Provider of Right of Claim right of claim for acquisition, which will be identified and made
Refers to
for Acquisition public prior to the shareholders' meeting held for deliberation of the
merger
Provider of Cash-based Hangzhou Capital, in this transaction, Hangzhou Capital provides the
Refers to
Option acquisition request right to Hirisun’s dissenting shareholders
Reporting period for right Hangzhou Capital, in this transaction, Hangzhou Capital provides the
Refers to
of claim for acquisition cash option to Hangzhou Turbine's dissenting shareholders
HTC's dissenting shareholders may request for a period for exercising
Reporting period for
Refers to related cash-based option, during which, the M&A Parties shall
cash-based option
otherwise determine and announce through negotiation
On the very day, the provider of right of claim for acquisition shall be
transferred shares of Hirisun's dissenting shareholders in whole or part
Date of Exercising the
for exercising the right of claim for acquisition, while paying cash
Right of Claim for Refers to
consideration to such dissenting shareholders. The date will be
Acquisition
otherwise agreed upon by the parties of the merger through
negotiation and made public
Date of Exercising Refers to On the very day, the provider of cash-based option shall be transferred
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Cash-based Option shares of HTC's dissenting shareholders in whole or part for
exercising the cash-based option, while paying cash consideration to
such dissenting shareholders. The date will be otherwise agreed upon
by the parties of the merger through negotiation and made public
Ratio of Stock-for-stock The number of A-shares issued by Hirisun per HTC share exchanged
Refers to
Merger in the stock-for-stock merger
On the very day, all HTC shareholders registered at the securities
depository and clearing agency (including the provider of cash-based
Date of record of option registered at the securities depository and clearing agency on
Refers to
stock-for-stock merger the day) shall proportionally convert HTC shares held into A-shares
issued by Hirisun in whole. The date will be otherwise agreed upon by
the parties of the merger through negotiation and made public
On the very day, shareholders shall proportionally convert all HTC
Date of Stock-for-stock
shares held into A-shares issued by Hirisun. The date will be
Merger, Date of Exercising Refers to
otherwise agreed upon by the parties of the merger through
Stock-for-stock Merger
negotiation and made public
Date of exercising stock-for-stock merger or any other date otherwise
Delivery Date Refers to
agreed upon by the parties
Base Date for Pricing the
The notice date of the first board resolution of Hirisun and HTC for
Stock-for-stock Merger, Refers to
deliberation of the transaction-related matters
Base Date for Pricing
Total amount/volume of stock transactions within some trading days,
Average Price of Stock
with distribution of cash dividends or stock dividends, capital reserves
Transaction, Average Price Refers to
converted into capital stock, allotment of shares, and other ex-right or
of Transaction
ex-dividend adjustments incurred during the period
Agreement on
Agreement on Stock-for-stock Merger between Hangzhou Hirisun
Stock-for-stock Merger, Refers to
Technology Inc. and Hangzhou Turbine Power Group Co., Ltd.
Merger Agreement
The period between the signing date of agreement on stock-for-stock
Interim Period Refers to
merger
The date on which the Surviving Company completes relevant
procedures for change of industrial and commercial registration
Completion Date of Merger Refers to
regarding the stock-for-stock merger or the date on which HTC
completes procedures for cancellation of industrial and commercial
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
registration, whichever is later
State Council Refers to State Council of the People's Republic of China
Engine and turbine project Refers to Aero engine and steam turbine projects
Competent Authority of
State-owned Assets Agency of state-owned assets supervision and administration with
Refers to
Supervision and authority for approval of the transaction
Administration
State Administration of
Science, Technology and State Administration of Science, Technology and Industry for
Refers to
Industry for National National Defence, PRC
Defence
CSRC, SRC Refers to China Securities Regulatory Commission
SZSE, Exchange Refers to Shenzhen Stock Exchange
Company Law Refers to Company Law of the People's Republic of China
Securities Law Refers to Securities Law of the People's Republic of China
Measures for the
Measures for the Administration of Material Asset Restructuring by
Administration of Refers to
Listed Companies
Restructuring
Listing Rules of Shenzhen Stock Exchange, ChiNext Listing Rules of
Listing Rules Refers to
Shenzhen Stock Exchange,
Compilation Rules for Information Disclosure by Companies Offering
Rules No.26 Refers to Securities to the Public No.26 - Material Asset Restructuring of Listed
Companies
Article 12, Article 13, Article 31, Article 44, Article 45 in the
Measures for the Administration of Initial Public Offering
Registration, Rules for Contents and Formats of Information
Applicable Opinions No.17 Refers to
Disclosure by Companies of Initial Public Offering No.57 -
Prospectus Article 7 Applicable Opinions in Relevant Provisions -
Applicable Opinions in Laws of Securities and Futures No.17
Yuan, Ten Thousand Yuan, RMB Yuan, RMB Ten Thousand Yuan, RMB One Hundred Million
Refers to
One Hundred Million Yuan Yuan
HKD, Hong Kong dollar Refers to Legal tender in Hong Kong
Note: In this plan, some totals may differ from sums of all figures added up by mantissa, owing to
rounding off.
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Notification of Material Matters
The investors are strongly recommended to carefully read full text of this plan and pay special
attention to what's follows:
I. Overview of the transaction plan
The restructuring and integration of HTC and Hirisun through share exchange and absorption
merger is an important measure to implement the guiding ideology of the CPC Central Committee
and the State Council to deepen the reform of state-owned enterprises, which will help improve
the industrial layout of state-owned listed companies, improve asset quality and operational
efficiency, and realize the preservation and appreciation of state-owned assets. Meanwhile,
theTransaction is also a positive response to the State Council and the China Securities Regulatory
Commission to encourage mergers and acquisitions and mergers between listed companies, which
will help promote the internal quality of listed companies, shape the image externally, improve the
asset quality and operational efficiency of listed companies, thereby enhancing the sustainable
profitability of listed companies and enhancing the investment value of listed companies. After the
delivery date, Hirisun will go through the industrial and commercial change registration
procedures related to the company's name and registered capital, and HTC will cancel its legal
personality. After the merger, the surviving company will adopt a new company name, and a series
of measures will be taken to establish a new corporate governance structure, management
structure, development strategy and corporate culture in accordance with the applicable laws and
regulations at that time and the main business of the surviving company after the merger.
The transaction is carried out as follows: Hirisun issues A-shares for stock-for-stock merger of
HTC, wherein Hirisun is the acquirer and HTC is the acquiree. In other words, Hirisun issues
A-shares to all HTC shareholders involved in the stock-for-stock merger, in exchange for HTC
shares held by such shareholders.
Upon the completion of stock-for-stock merger, HTC will be delisted and disqualified from
being a corporation, while Hirisun will inherit and take on all HTC's assets, liabilities, businesses,
human resources, contracts and all the other rights and obligations. Hirisun will request for listing
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
and circulating A-shares issued by Hirisun for the stock-for-stock merger on SZSE ChiNext market.
II. Merger plan
1. Both parties of share exchange and merger
The merger party of this share exchange absorption merger is Hirisun, and the absorbed merger
party is HTC.
2. Method of share exchange and absorption merger
Hirisun will issue A shares as consideration to all the share exchange shareholders of HTC, and
absorb and merge HTC through share exchange, and the shares held by all the shareholders of
HTC will be converted into A shares of Hirisun in accordance with the share exchange ratio.
As the merger party and surviving company of this merger, Hirisun will inherit and undertake all
the assets, liabilities, business, personnel and all other rights and obligations of HTC; As the
merged party of this merger, HTC will terminate its listing and cancel its legal personality.
3. The type and par value of the shares to be issued in exchange for shares
The type of shares issued by Hirisun as a result of this merger is domestically listed RMB
ordinary shares (A shares), with a par value of 1.00 yuan per share.
4. The object of the share exchange and the registration date of the merger
The issuance object of this merger is all shareholders of HTC registered after the market close on
the equity registration date of the merger implementation, that is, on the equity registration date
of the implementation of the merger, the shareholders of HTC who have not declared, partially
declared, have no right to declare or invalidly declare the exercise of the cash option, as well as
the provider of the cash option (if it has actually paid cash consideration to the shareholders who
exercise the cash option and transferred the shares of HTC), and all the shares held by the share
exchange object will be converted into A shares issued by Hirisun due to the merger in
accordance with the share exchange ratio.
The board of directors of the two parties will separately negotiate and announce the equity
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
registration date for the implementation of the merger after the transaction is approved by the
Shenzhen Stock Exchange (hereinafter referred to as the "Shenzhen Stock Exchange") and the
China Securities Regulatory Commission agrees to register.
5. The exchange price and the exchange ratio
The pricing benchmark date of the merger is the date of the announcement of the first board
resolution of the two parties. Taking into account factors such as historical stock price, operating
performance, market capitalization, etc., in accordance with the relevant provisions of the
"Restructuring Management Measures", and after negotiation between the two parties of the
merger, the exchange price of Hirisun is determined to be 9.56 yuan per share according to the
average stock trading price of the 20 trading days before the pricing benchmark date. The
average stock trading price of HTC is HK$7.77 per share according to the average stock trading
price of 20 trading days before the pricing benchmark date, which is equivalent to RMB 7.11 per
share by converted according to the median price of RMB to Hong Kong dollar announced by
the People's Bank of China on October 25, 2024 (HK$1 = 0.91496 RMB) that is the trading day
before HTC share suspension.
It’s finally determined that the exchange price of HTC is to give a premium of 34.46% on this
basis, and the exchange price of HTC = the average trading price of HTC * (1 + premium rate) =
9.56 yuan / share, and the number of shares of Hirisun that can be exchanged for each 1 share of
HTC = the exchange price of HTC / the exchange price of Hirisun. According to the above
formula, the exchange ratio between HTC and Hirisun is 1:1, that is, every 1 share of HTC can
be exchanged for 1shares of Hirisun share.
From the pricing benchmark date of the merger to the implementation date of the share exchange
(both dates inclusive), the share exchange ratio shall not be adjusted under any other
circumstances, except for the distribution of cash dividends, stock dividends, capital reserve
conversion to share capital, allotment and other ex-rights and dividends by either party to the
merger, or in the event that the exchange price needs to be adjusted in accordance with the
requirements of relevant laws, regulations or regulatory authorities.
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
6. The number of shares to be issued in exchange for shares
Up to now, the total share capital of HTC is 1,175,009,597 shares, and the shares of HTC
participating in this share exchange are 1,175,009,597 shares. Calculated with reference to the
share exchange ratio, the total number of shares issued by Hirisun for this share exchange is
1,175,009,597 shares.
If either of the two parties to the merger has any ex-rights and dividends such as cash dividends,
stock dividends, capital reserve conversion to share capital, allotment and other ex-rights and
dividends from the pricing benchmark date to the share exchange date (both dates inclusive), or
the stock repurchase and cancellation of HTC, the number of shares issued by the
above-mentioned exchange shall be adjusted accordingly.
The A-shares of Hirisun obtained by the share exchange shareholders of HTC shall be integers.
If the amount obtained by multiplying the HTC shares held by the exchange ratio is not an
integer, then one share will be issued to each shareholder in descending order according to the
mantissa after the decimal point until the actual number of shares exchanged matches the
planned number of shares. If there are more shares with the same ending than the remaining
number, the computer system will randomly distribute them until the actual number of shares
exchanged matches the planned number of shares to be issued.
7. The place of listing of the shares issued by the exchange of shares
The A-shares issued by Hirisun for this share exchange will be applied for listing and circulation
on the Growth Enterprise Market of the Shenzhen Stock Exchange.
8. Disposal of shares held by shareholders whose rights are restricted in share exchange
For the shares of HTC that have been pledged, frozen by the judiciary or restricted by laws and
regulations from transferring, such shares will be converted into shares of Hirisun when they are
exchanged, and the pledge, judicial freezing status or other rights restrictions originally set on
the shares of HTC will continue to be valid on the corresponding shares of Hirisun in exchange.
9. The interest protection mechanism of Hirisun dissenting shareholders
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
In order to protect the interests of Hirisun shareholders and reduce the impact of Hirisun 's stock
price fluctuations on investors after the merger, in accordance with the relevant provisions of
"The Company Law" and the "Articles of Association of Hangzhou Hirisun Technology Co.,
Ltd.", Hirisun 's dissenting shareholders will be given the appraisal rights in this merger.
(1) Dissenting shareholders of Hirisun
The dissenting shareholders of Hirisun who have the right to exercise appraisal rights refer to the
shareholders of HTC who have voted valid against at the shareholders’’ meeting to all the
relevant proposals on the merger plan and the sub-proposals voted on one by one and on the
relevant proposals on the merger agreement signed by the two parties to the merger, and have
continued to hold the shares representing the objection rights until the implementation date of
the appraisal rights request of the dissenting shareholders of Hirisun, and meanwhile have
performed the relevant reporting procedures within the specified time.
(2) The provider of the appraisal rights
Hangzhou State-owned Capital Investment and Operation Co., Ltd. (hereinafter referred to as
"Hangzhou Capital"), as the provider of the appraisal rights, provides the appraisal rights to the
dissenting shareholders of Hirisun. Dissenting shareholders of Hirisun shall no longer assert the
right to claim the appraisal rights from Hirisun or any shareholder of Hirisun who agrees to the
merger. After the Transaction is registered by the China Securities Regulatory Commission, the
provider of the appraisal rights promised to unconditionally accept the shares held by the
dissenting shareholders of Hirisun who had successfully declared the exercise of the appraisal
rights on the implementation date of the appraisal rights claim, and pay the corresponding cash
consideration to the dissenting shareholders of Hirisun according to the price of the appraisal
rights claim.
(3) The price of the appraisal rights claim
The price of the appraisal rights request of the dissenting shareholders of Hirisun is the average
trading price of the A-shares in the 20 trading days before the suspension of the Hirisun A-shares
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
(i.e., the 20 trading days before the pricing benchmark date), that is, 9.56 yuan per share.
If the distribution of cash dividends, stock dividends, capital reserve to share capital, allotment
and other ex-rights and dividends occurs from the pricing benchmark date to the implementation
date of the appraisal rights request (both dates inclusive), the appraisal rights price shall be
adjusted accordingly.
(4) The price adjustment mechanism for appraisal rights
1) Adjustment object
The object of adjustment is the price of the appraisal rights of the dissenting shareholders of
Hirisun.
2) The conditions under which the price adjustment plan will take effect
(1) The state-owned assets authority approves the price adjustment plan;
(2) The general shareholders' meeting of Hirisun deliberated and approved the price adjustment
plan;
(3) The general shareholders' meeting of HTC deliberated and approved the price adjustment
plan.
3) The period in which the price can be adjusted
From the announcement date of the resolution of the merger deliberated and approved in the
Hirisun general shareholders' meeting to the date before the China Securities Regulatory
Commission agreed to register the Transaction.
4) Trigger condition
From the announcement of the first board resolution of Hirisun to the time when the China
Securities Regulatory Commission agrees to register the Transaction, if any of the following two
circumstances occur, the board of directors of Hirisun has the right to hold a meeting within the
price adjustment period to consider whether to make an adjustment to the price of the appraisal
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
rights:
A. The Growth Enterprise Index(399006. SZ) has a closing point drop of more than 20% in at
least 10 out of 20 consecutive trading days prior to any trading day compared to the closing
point of the previous trading day before the suspension of trading on the A-share market of
Hirisun ; And prior to the trading day, the daily trading average price of Hirisun A-shares has
fallen by more than 20% in at least 10 consecutive trading days compared to the trading average
price of Hirisun A-shares in the 20 trading days before the suspension of trading (i.e. the 20
trading days before the pricing benchmark date);
Or
B. Wind Information Technology Service Index (866311. WI) has a closing point drop of more
than 20% in at least 10 of the 20 consecutive trading days prior to any trading day compared to
the closing point of the trading day before the suspension of the A-share trading of Hirisun; And
prior to the trading day, the daily average trading price of Hirisun A-shares had fallen by more
than 20% in at least 10 out of 20 consecutive trading days compared to the average trading price
of Hirisun A-shares in the 20 trading days before the suspension of trading (i.e. the 20 trading
days before the pricing benchmark date).
5) Adjustment mechanism and price adjustment benchmark date
The board of directors of Hirisun shall convene a meeting of the board of directors within 20
trading days from whichever date is later-the date to the first achievement of the trigger
conditions for price adjustment and the date on which the effective conditions of the price
adjustment plan are met, and deliberate and decide whether to adjust the price of the appraisal
rights of the dissenting shareholders of Hirisun in accordance with the price adjustment plan.
During the price adjustment period, Hirisun will only adjust the price of the dissenting
shareholder's appraisal rights once. If Hirisun has convened a meeting of board of directors to
review and decide to adjust the price of the dissenting shareholder's appraisal rights, and the
price adjustment condition is triggered again, no further adjustment will be made;; If the board
of directors has convened a meeting to deliberate and decide not to adjust the price of the
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
appraisal rights of the dissenting shareholder, and the price adjustment condition is triggered
again, no further adjustment will be made.
The benchmark date for price adjustment is the next trading day after the date of achievement of
the above-mentioned trigger conditions. The adjusted price of the appraisal rights of dissenting
shareholders is the average trading price of the stock in the 20 trading days prior to the
benchmark date of the price adjustment.
(5) Exercise of the appraisal rights
After the transaction is registered with the China Securities Regulatory Commission, Hirisun
will determine the equity registration date for the implementation of the appraisal rights. The
dissenting shareholders who exercise the appraisal rights may obtain the cash consideration paid
by the provider of the appraisal rights according to the price of the appraisal rights on the
implementation date of each share of the appraisal rights that they have validly declared, and at
the same time transfer the corresponding shares to the name of the provider of the appraisal
rights. The provider of the appraisal rights shall acquire all the shares of Hirisunon the
implementation date of the appraisal rights exercised by the dissenting shareholders of Hirisun,
and pay the cash consideration accordingly.
The following conditions must be met at the same time for the registered dissenting shareholders
of Hirisun to exercise the appraisal rights: (1) as far as the shareholders of Hirisun are concerned,
they have cast valid negative votes on the relevant proposals on the merger plan and the
sub-proposals voted on one by one at the general shareholders' meeting of Hirisun on the merger
plan and on the relevant proposals on the merger agreement signed by the two parties to the
merger; (2) From the record date of the shareholders' meeting at which Hirisun deliberated on
the merger, as a validly registered shareholder of Hirisun, continue to hold the shares
representing the right of opposition until the implementation date of the appraisal rights; (3)
Successfully perform the relevant declaration procedures within the filing period of the appraisal
rights claim. Shareholders who meet the above conditions are only entitled to exercise the
appraisal rights of shares for which they have cast a valid negative vote. If the dissenting
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Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
shareholders of Hirisun sell their shares (including but not limited to being forcibly deducted by
the judiciary) after the registration date of the general shareholders' meeting of the merger of
Hirisun's share exchange and absorption, the number of shares entitled to exercise the appraisal
rights shall be reduced accordingly; If the dissenting shareholders of Hirisun purchase shares
after the registration date of the shareholders' meeting of the merger of Hirisun's share exchange
and absorption, the number of shares entitled to the appraisal rights shall not increase, and such
shares shall not enjoy the appraisal rights.
The dissenting shareholders of Hirisun of the register who hold the following shares shall not
have the right to assert the appraisal rights of the shares they hold: (1) the shares of Hirisun with
rights restrictions, such as the shares that have been pledged or set with other third-party rights
or are restricted by laws and regulations such as judicial freeze; (2) its legal holder undertakes in
writing to give up the appraisal rights of shares of the dissenting shareholder; and (3) other
shares that are not subject to the exercise of the appraisal rights under applicable law.
Dissenting shareholders who have submitted Hirisun's shares as collateral for margin trading
must transfer Hirisun's shares from the securities company's customer credit guarantee account
to their ordinary securities account before the equity registration date of the appraisal rights
request before they can exercise the appraisal rights. Dissenting shareholders of Hirisunwho
have carried out the agreed repurchase securities transaction must complete the early repurchase
procedures in a timely manner before they can exercise the appraisal rights before the equity
registration date of the appraisal rights claim.
The relevant taxes and fees arising from the exercise of the appraisal rights shall be borne by the
dissenting shareholders of Hirisun who exercise the appraisal rights. The provider of the
appraisal rights and other entities shall bear the responsibility in accordance with relevant laws,
regulations, regulatory authorities, and securities registration and settlement institutions. If there
is no clear regulation on this by laws, regulations, regulatory authorities, and securities
registration and settlement institutions, the parties shall negotiate and resolve it in accordance
with market practices.
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If the merger proposal fails to obtain permit or approval from the general shareholders' meeting
or relevant regulatory or government departments by both parties, resulting in the ultimate
inability to implement the merger, the dissenting shareholders of Hirisun cannot exercise their
appraisal rights, nor can they claim any compensation or indemnification from the merging
parties.
After the transaction is approved and registered by the China Securities Regulatory Commission,
Hirisun will separately announce the detailed arrangements for the appraisal rights request plan
of Hirisun dissenting shareholders (including but not limited to the declaration, settlement and
delivery of the appraisal rights), and will disclose information in a timely manner in accordance
with laws, regulations and the provisions of the Shenzhen Stock Exchange.
10. Mechanism for protecting the interests of dissenting shareholders of HTC
In order to protect the interests of the shareholders of HTC and reduce the impact of the
fluctuation of the stock price of HTC on investors after the merger, in accordance with the
relevant provisions of The Company Law and the Articles of Association of Hangzhou Turbine
Power Group Co., Ltd., the dissenting shareholders of HTC will be given the cash option right in
this merger.
(1) Dissenting shareholders of HTC
The dissenting shareholders of HTC who have the right to exercise the cash option refer to the
shareholders who participated in the general shareholders' meeting held by HTC and voted valid
against to all the merger plan and the sub-proposals voted on one by one and to the relevant
proposals on the merger agreement signed by the two parties in the merger, and have continued
to hold the shares representing the objection right until the implementation date of the cash
option of the dissenting shareholders of HTC, and at the same time perform the relevant
declaration procedures within the specified time.
(2) The provider of the cash option
Hangzhou Capital, as the provider of the cash option, provides the cash option to the dissenting
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shareholders of HTC. The dissenting shareholders of HTC shall no longer claim the cash option
from HTC or any shareholder of HTC who agrees to the merger. After the Transaction is
registered with the China Securities Regulatory Commission, the provider of the cash option
shall undertake unconditionally to accept the shares held by the dissenting shareholders of HTC
who successfully declared the exercise of the cash option on the implementation date of the cash
option, and pay the corresponding cash consideration to the dissenting shareholders of HTC
according to the cash option price.
(3) The price of the cash option
The cash option price of the dissenting shareholders of HTC is the average trading price of
B-shares for the 20 trading days before the suspension of trading of HTC's B-shares (i.e. 20
trading days before the pricing benchmark date), that’s HK$7.77 per share, which is equivalent
to RMB 7.11 per share by converted according to the median price of RMB to Hong Kong dollar
announced by the People's Bank of China on October 25, 2024 (HK$1 = 0.91496 RMB) that is
the trading day before HTC share suspension. If there are ex-rights and dividends such as cash
dividends, stock dividends, conversion of capital reserve to share capital, and allotment from the
pricing benchmark date to the implementation date of the cash option (both dates inclusive), the
cash option price will be adjusted accordingly.
(4) the price adjustment mechanism for cash option
1) Adjustment object
The object of adjustment is the cash option price of dissenting shareholders of HTC.
2) The conditions under which the price adjustment plan will take effect
(1) The state-owned assets authority approves the price adjustment plan;
(2) The shareholders' meeting of Hirisun deliberated and approved the price adjustment plan;
(3) The shareholders' meeting of HTC deliberated and approved the price adjustment plan.
3)The period in which the price can be adjusted
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From the announcement date of the resolution of the merger deliberated and approved in the
HTC general shareholders' meeting to the date before the China Securities Regulatory
Commission agreed to register the Transaction.
4) Trigger condition
From the announcement of the first board resolution of HTC to the time when the China
Securities Regulatory Commission agrees to register the Transaction, if any of the following two
circumstances occur, the board of directors of HTC has the right to hold a meeting within the
price adjustment period to consider whether to make an adjustment to the price of the cash
option:
A. Shenzhen Stock Exchange Composite Index (399106. SZ) has a closing point drop of more
than 20% in at least 10 out of 20 consecutive trading days prior to any trading day compared to
the closing point of the previous trading day before the suspension of trading on the HTC's B
shares; And prior to the trading day, the daily trading average price of HTCB-shares has fallen
by more than 20% in at least 10 consecutive trading days compared to the trading average price
of HTCB-shares in the 20 trading days before the suspension of trading (i.e. the 20 trading days
before the pricing benchmark date);
Or
B. Wind Electrical Equipment Industry Index (882210.HK) WI) has a closing point drop of more
than 20% in at least 10 of the 20 consecutive trading days prior to any trading day compared to
the closing point of the trading day before the suspension of the HTC's B shares; And prior to the
trading day, the daily average trading price of HTC's B shares-shares has fallen by more than 20%
in at least 10 out of 20 consecutive trading days compared to the average trading price of HTC's
B shares in the 20 trading days before the suspension of trading (i.e. the 20 trading days before
the pricing benchmark date).
5) Adjustment mechanism and price adjustment benchmark date
The board of directors of HTC shall convene a meeting of the board of directors within 20
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trading days from whichever date is later-the date to the first achievement of the trigger
conditions for price adjustment and the date on which the effective conditions of the price
adjustment plan are met, and deliberate and decide whether to adjust the price of the cash option
of the dissenting shareholders of HTC in accordance with the price adjustment plan. During the
price adjustment period, HTC will only adjust the price of the dissenting shareholder's cash
option once. If HTC has convened a meeting of board of directors to review and decide to adjust
the price of the dissenting shareholder's cash option, and the price adjustment condition is
triggered again, no further adjustment will be made; If the board of directors has convened a
meeting to deliberate and decide not to adjust the cash option price of the dissenting
shareholders, and the price adjustment condition is triggered again, no further adjustment will be
made.
The benchmark date for price adjustment is the trading day following the date on which the
above-mentioned trigger conditions are fulfilled. The adjusted cash option price of dissenting
shareholders of HTC is the average stock trading price of the 20 trading days before the
benchmark date of the price adjustment.
(5) Exercise of the cash option
After the Transaction is registered by the China Securities Regulatory Commission, HTC will
determine the equity registration date for the implementation of the cash option. Dissenting
shareholders of HTC who exercise the cash option may obtain the cash consideration paid by the
cash option provider at the cash option price on the implementation date of each share of HTC
validly declared, and at the same time transfer the corresponding shares to the name of the cash
option provider. The provider of the cash option shall acquire all the shares of HTC exercising
the cash option by the dissenting shareholders of HTC on the implementation date of the cash
option, and pay the cash consideration accordingly. The shares of HTC acquired by the cash
option provider through the cash option will be converted into A shares issued by Hirisun for the
merger in accordance with the share exchange ratio on the implementation date of the merger
plan.
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The following conditions must be met at the same time for the registered dissenting shareholders
of HTC to exercise the cash option: (1) they have cast valid negative votes on the relevant
proposals on the merger plan and the sub-proposals voted on one by one at the general
shareholders' meeting of HTC on the merger plan and on the relevant proposals on the merger
agreement signed by the two parties to the merger; (2) From the record date of the shareholders'
meeting at which HTC deliberated on the merger, as a validly registered shareholder of HTC,
continue to hold the shares representing the right of opposition until the implementation date of
the cash option; (3) Successfully perform the relevant declaration procedures within the cash
option reporting period. Shareholders who meet the above conditions are only entitled to
exercise the cash option in respect of their share declarations for which they have cast a valid
negative vote. If the dissenting shareholders of HTC sell their shares after the registration date of
the equity registration date of the shareholders' meeting of the HTC share absorption merger
(including but not limited to being judicially compulsorily deducted, etc.), the number of shares
entitled to the cash option shall be reduced accordingly; If the dissenting shareholders of HTC
purchase shares after the registration date of the equity registration date of the shareholders'
meeting of the HTC share absorption merger, the number of shares entitled to the cash option
shall not increase, and such shares shall not enjoy the cash option.
The dissenting shareholders of HTC who hold the following shares are not entitled to exercise
the cash option in respect of the shares they hold: (1) the shares of HTC with rights restrictions,
such as shares that have been pledged or set with other third-party rights or restricted by laws
and regulations such as judicial freeze; (2) its legal holder undertakes in writing to give up the
shares of the cash option of the dissenting shareholders of HTC; and (3) other shares that are not
subject to the exercise of the cash option under applicable law. The above-mentioned shares that
are not entitled to claim the cash option will be converted into shares issued by Hirisun in
accordance with the exchange ratio on the exchange date.
Dissenting shareholders of HTC who have submitted the shares of HTC as collateral for margin
financing and securities lending transactions must transfer the shares of HTC from the credit
guarantee account of the securities company to their ordinary securities account before the
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equity registration date of the cash option before they can exercise the cash option. Dissenting
shareholders of HTC who have carried out the agreed repurchase securities transaction must
complete the early repurchase procedures in a timely manner before the equity registration date
of the cash option before exercising the cash option.
The relevant taxes and fees arising from the exercise of the cash option shall be borne by the
dissenting shareholders of HTC exercising the cash option, the provider of the cash option and
other entities shall bear the responsibility in accordance with the relevant laws, regulations,
regulatory authorities and the provisions of the securities registration and clearing institutions. If
there is no clear regulation on this by laws, regulations, regulatory authorities, and securities
registration and settlement institutions, the parties shall negotiate and resolve it in accordance
with market practices.
If the merger proposal fails to obtain permit or approval from the general shareholders' meeting
or relevant regulatory or government departments by both parties, resulting in the ultimate
inability to implement the merger, the dissenting shareholders of HTC cannot exercise the cash
option, nor can they claim any compensation or indemnification from the merging parties.
After the transaction is approved and registered by the China Securities Regulatory Commission,
HTC will separately announce the detailed arrangements for the cash option plan of HTC
dissenting shareholders (including but not limited to the declaration, settlement and delivery of
the cash option), and will disclose information in a timely manner in accordance with laws,
regulations and the provisions of the Shenzhen Stock Exchange.
11. Transitional arrangements
During the transition period, in order to achieve a smooth transition of business, if it is truly
necessary, if either party needs the cooperation of the other party in the course of business
development (including but not limited to providing relevant materials, issuing explanations,
jointly reporting to the competent authorities, etc.), the other party shall actively cooperate in
this regard.
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During the Transition Period, the merging parties shall, and shall procure that each of their
subsidiaries: (1) continue to operate independently in the ordinary course of business in
accordance with past operational management and operating methods, and will not engage in
any unusual transactions or incur any unusual debts; (2) to do its best to maintain all assets that
make up the main business in good condition, and to maintain all good relationships with
government authorities, customers, employees and other relevant parties; (3) Make, sort out and
keep their respective documents and materials, and pay relevant taxes and fees in a timely
manner.
During the transition period, either party to the merger shall take the initiative to respond to the
reasonable requests of the other party and provide the other party with relevant assets, financial
account books, meeting minutes, material claims and debts and other relevant documents in a
timely manner. If it is truly necessary, if one party needs the cooperation of the other party in the
course of business development (including but not limited to providing relevant materials,
issuing explanations, jointly carrying out declarations to the competent authorities, etc.), the
other party shall actively cooperate in this regard.
12. Arrangements for the transfer or delivery of the relevant assets involved in
theTransaction
(1) Delivery conditions
After the merger agreement takes effect, the merger will be closed on the closing date. The
merging parties shall complete the delivery obligations agreed under the merger agreement on
the delivery date and sign the asset delivery confirmation document.
(2) Asset delivery
Since the date of closing, the ownership of all assets of HTC (including but not limited to all
properties, trademarks, patents, franchises, projects under construction and other assets) and the
related rights, interests, liabilities and obligations shall be enjoyed and assumed by Hirisun. HTC
agrees to assist Hirisun in handling the change procedures for the transfer of all stipulated
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properties of HTC (i.e., for any property, the law provides special procedures for the creation or
transfer of such property rights or rights related to such property, including but not limited to
land, real estate, vehicles and vessels, trademarks, patents, etc.) from HTC to the name of
Hirisun. If the formal transfer procedures cannot be performed due to the change of registration
procedures and other reasons, it will not affect the rights and obligations of Hirisun to the
above-mentioned assets.
After the completion of the merger, the equity of the subsidiary currently held by HTC belongs
to the surviving company, and it is changed to a subsidiary of the surviving company. The
subsidiary of HTC (if any) belongs to the surviving company and is registered as a subsidiary of
the surviving company.
(3) Debt inheritance
Except for the debts that are repaid in advance based on the creditor's request for early
repayment within the statutory time limit, all outstanding debts of the merger parties will be
inherited by Hirisun after the closing date of the merger.
(4) Contract succession
After the closing date of the share exchange and absorption merger, the contract subject of the
rights, obligations and rights and interests of HTC under all valid contracts/agreements signed
by HTC is changed to Hirisun.
(5) Data handover
HTC shall hand over all its bank account information, reserved seals and all seals of HTC to
Hirisun on the delivery date. HTC shall, from the date of delivery, hand over to Hirisun any and
all documents that have a significant impact on its subsequent operations.
(6) Share transfer
On the date of the share exchange, Hirisun shall register the A shares issued to the shareholders
of HTC as consideration for the merger to the shareholders of HTC. The shareholders of HTC
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have become shareholders of Hirisun since the date when the new shares are registered in their
names.
13. Disposal of creditor's rights and debts involved in the Transaction
Since the date of delivery, Hirisun has inherited and undertaken all the assets, liabilities, business,
personnel, contracts, qualifications and all other rights and obligations of HTC.
Hirisun and HTC will perform the creditor notification and announcement procedures in
accordance with the provisions of relevant laws and regulations, and will, according to the
requirements of their respective creditors within the statutory time limit, in accordance with the
provisions of relevant applicable laws and regulations, independently or urge third parties to
repay their debts in advance or provide additional guarantees for their respective creditors. If the
relevant creditors fail to claim early repayment or providing security from the merging parties
within the aforesaid statutory period, the unpaid debts will be inherited by Hirisun after the
closing date.
14. Employee placement
After the completion of the share exchange and absorption merger, the management and
employees of Hirisun will continue to retain their original jobs in accordance with the labor
contract signed with Hirisun. All registered employees of HTC will be accepted by the surviving
company and properly arranged. All rights and obligations of HTC as the employer of its
existing employees will be enjoyed and assumed by Hirisun from the closing date.
Before the relevant shareholders' meetings to consider the merger, the two parties will hold a
staff representative meeting or a staff meeting respectively to review the employee placement
plan involved in the merger.
15. Arrangement for rolling over undistributed profits
In addition to the profit distribution plan approved by the respective general shareholders'
meetings of the two parties, the accumulated undistributed profits of Hirisun and HTC as of the
implementation date of the share exchange shall be jointly enjoyed by the new and old
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shareholders of the surviving company according to their shareholding ratios.
III. The transaction constitutes a related party transaction
In the transaction, Hirisun's dominant shareholder is Hangzhou Capital, and actual controller is
State-owned Assets Supervision and Administration Commission of Hangzhou; HTC's dominant
shareholder is Turbine Holdings, and actual controller is State-owned Assets Supervision and
Administration Commission of Hangzhou. In accordance with provisions on the related party and
related party transaction in the Listing Rules and ChiNext Listing Rules, the transaction constitutes a
related party transaction between Hirisun and HTC.
Concerning matters of the related party transaction, related directors of Hirisun and HTC have
evaded voting.
IV. The transaction constitutes material asset restructuring
According to Hirisun's and HTC's 2023 audit reports and transaction amount, the transaction
constitutes material asset restructuring, specifically calculated as follows:
In RMB 10,000
Operating
Item Total assets Net assets
revenue
Acquiree (HTC) 1,592,768.01 592,423.80 789,927.59
Transaction amount 1,123,309.17
Acquirer (Hirisun) 69,399.92 21,303.49 48,930.79
Acquiree/acquirer 2,295.06% 2,780.88% 1,614.38%
Transaction amount/acquirer 1,618.60% - 2,295.71%
Criterion for material asset restructuring in the Measures 50% and >RMB 50% and >RMB
50%
for the Administration of Restructuring 50 million 50 million
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Operating
Item Total assets Net assets
revenue
Whether to meet the criterion for material asset
Yes Yes Yes
restructuring
Note: The net assets in the table refer to owners' Equity attributable to parent company in the audited
consolidated statements for the latest accounting year.
In accordance with Measures for the Administration of Restructuring, the transaction
constitutes material asset restructuring.
V. The transaction is expected to constitute restructuring and listing
Before the transaction, HTC's dominant shareholder is Turbine Holdings, and there was no
change of power of control in the latest 36 months. Upon the completion of the transaction, HTC
will be delisted and disqualified from being a corporation.
Within 36 months before the transaction, Hirisun's dominant shareholder was altered from HFI
to Hangzhou Capital. In February 2024,HFI voluntarily transferred all 99,830,000 shares of Hirisun
held (representing 29.80% of Hirisun's total capital stock) to Hangzhou Capital. Till the signing date
of the plan, HFI no longer held shares of Hirisun, and Hangzhou Capital held 99,830,000
non-selling-restricted tradable shares of Hirisun, accounting for 29.80% of Hirisun's total capital
stock. Hirisun's dominant shareholder is thus altered from HFI to Hangzhou Capital.
According to Hirisun's and HTC's 2023 audit reports, HTC's related financial data account for
over 100% of Hirisun's, meeting the criterion for restructuring and listing prescribed in Article 13 of
the Measures for the Administration of Restructuring. Therefore, the transaction is expected to
constitute restructuring and listing.
VI. Effects of the transaction on the surviving company
(I) Effects of the transaction on main business of the surviving company
Prior to this transaction, HTC mainly designs and manufactures industrial turbines, gas
turbines and other rotating industrial turbine machinery and equipment, and provides related
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supporting services, the main products include industrial steam turbines, gas turbines, etc., which
are mainly used in oil refining, chemical industry, fertilizer, building materials, metallurgy, electric
power, light industry, environmental protection and other industrial fields. Hirisun is mainly
engaged in the power information construction business, and provides related technical and
consulting services, and its power information solutions can be widely used in all links of the
power industry chain, including power generation, transmission, substation, distribution, power
consumption and dispatching.
After the implementation of the Transaction, the surviving company will inherit and
undertake all the assets, liabilities, business, personnel, contracts and all other rights and
obligations of HTC, forming a business pattern of industrial turbine machinery business as the
main business and power information business as the supplement. The surviving company will
integrate the industrial resources of both parties, further optimize the company's industrial layout,
and effectively enhance the core competitiveness and sustainable profitability of the surviving
company.
(II) Effects of the transaction on equity structure of the surviving company
Before the transaction, HIrisun's total capital stock is 335,000,000 shares, while HTC's total
capital stock is 1,175,009,600 shares. Irrespective of subsequent ex-right or ex-dividend and other
effects on the M&A Parties, Hirisun issues a total of 1,175,009,600 shares for the stock-for-stock
merger, calculated by stock-for-stock ratio of 1:1. Irrespective of the effects of right of claim for
acquisition and cash-based option, upon the completion of the stock-for-stock merger, HTC holds
45.68% of the shares of the surviving company and is the direct controlling shareholder of the
surviving company. Hangzhou Capital directly holds 6.61% of the shares of the surviving
company, and controls a total of 52.29% of the shares of the surviving company through HTC, and
is the indirect controlling shareholder of the surviving company. Hangzhou SASAC controls a
total of 52.29% of the shares of the surviving company and is the actual controller of the surviving
company.
Before and after the transaction, Hirisun's shareholders and holding ratios are listed as follows:
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In shares 10,000
Before the stock-for-stock merger After the stock-for-stock merger
Number of shares
Shareholder Number of shares Holding
held (10,000 Holding ratio
held ratio
shares)
Hangzhou State-owned Capital
9,983.00 29.80% 9,983.00 6.61%
Investment and Operation Co., Ltd.
Hangzhou Turbine Holdings Co., Ltd. - - 68,971.59 45.68%
Subtotal shares held by dominant
shareholders and persons acting in 9,983.00 29.80% 78,954.59 52.29%
concert
Other shareholders 23,517.00 70.20% 72,046.37 47.71%
Total 33,500.00 100.00% 151,000.96 100.00%
(III) Effects of the transaction on key financial indicators of the surviving company
After the implementation of the transaction, Hirisun will inherit and take on all HTC's assets,
liabilities, businesses, human resources, contracts and all the other rights and obligations. The M&A
Parties will find their business put into exhaustive integration, and the surviving company will shape
a business pattern featuring industrial turbine business taking the center stage, complete with
electric power information business. Besides, The business and operating scale of the surviving
company will be further expanded, and the total assets and operating income will be increased.
Upon the completion of the work of the transaction-related audit and valuation, the M&A
Parties will, in accordance with statistics in relevant audit reports and reports for reference and
review, make quantitative analysis on key financial indicators of the surviving company before and
after the transaction, followed by detailed analysis on the effects of the transaction on the financial
status and profitability of the surviving company in the report for stock-for-stock merger.
(IV) The transaction will not make the surviving company ineligible for stock listing
Upon the completion of the transaction, the equity structure of the surviving company is as
shown in the plan's "Notification of Material Matters" - "VI. Effects of the transaction on the
surviving company" - "(II) Effects of the transaction on the equity structure of the surviving
company".
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Upon the completion of the transaction, the capital stock of the surviving company will exceed
400 million shares, and the public and shareholders put together will account for no less than 10% of
the capital stock of the surviving company, thus not making the surviving company ineligible for
stock listing.
VII. Mechanism for protection of interest of creditors
Upon the completion of the stock-for-stock merger, HTC will be delisted and disqualified from
being a corporation, while Hirisun will inherit and take on all HTC's assets, liabilities, businesses,
human resources, contracts and all the other rights and obligations.
Pursuant to relevant laws and regulations, Hirisun and HTC will carry out procedures of
notification and announcement to creditors, and depending on requirements raised by respective
creditors within statutory period, repay the debt in advance or otherwise provide guarantee for
respective creditors, or urge third party to do so. Within the statutory period, if relevant creditors
make no claim for repaying the debt in advance or providing guarantee to the M&A Parties, related
outstanding debt will be borne by Hirisun upon the completion of the stock-for-stock merger.
VIII. Completed and outstanding transaction-related procedures
(I) Obtained approval for the transaction
1. The transaction has been approved through deliberation at the fourth interim session of the
sixth board of directors of Hirisun in 2024;
2. The transaction has been approved through deliberation at the tenth session of the ninth
board of directors of HTC.
(II) Pending approval for the transaction
Pending ratification or approval procedures for the transaction are listed as follows, including
but not limited to:
1. The formal transaction plan shall be adopted by the boards of directors of Hirisun and HTC
through deliberation;
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2. The formal transaction plan shall be adopted by the boards of shareholders of Hirisun and
HTC through deliberation;
3. With consent of Hirisun's board of shareholders, Hangzhou Capital will be exempted from
increasing shares of Hirisun by means of offer;
4. The transaction shall be approved by competent authority of state-owned assets supervision
and administration;
5. The transaction shall be examined and approved by SZSE and put on file by CSRC;
6. The stock-for-stock merger shall be approved, permitted or accepted by other related
competent authorities prescribed by laws and regulations (if any).
The transaction shall not be carried out until it is ratified, approved, or accepted and put on file
as stated above. There is uncertainty about whether and when the transaction is ratified, approved or
accepted and put on file as stated above, thus investors should be on the alert for investment risks.
IX. Important commitments made by the transaction-related parties
Party of
Matter of commitment Particulars
commitment
1. The Company gives a pledge: all the transaction-related materials
provided to all intermediaries are authentic, accurate and intact
original written materials or duplicates and information; such
duplicates or photocopies are consistent with relevant original
materials or original copies; all the documents bear authentic
signature or seal and contain no false records, misleading statements
or major omissions whatsoever.
Statement and 2. The Company gives a pledge: the statement and confirmation
commitment of issued for the transaction is authentic, accurate and intact, and
Hirisun authenticity, accuracy and contains no false records, misleading
integrity of information 3. Depending on the process of the transaction, if related documents
provided and relevant information are further needed, the Company ensures
that such documents and information be provided in time, with
guarantee on the authenticity, accuracy and integrity of such
information.
4. If the given or disclosed information in the transaction relates to
any false records, misleading statements or major omissions, and
causes losses to the Company or investors, the Company will bear
liability of compensation by law.
Hirisun's Statement and 1. I myself give a pledge: all the transaction-related materials
directors, commitment of provided to all intermediaries are authentic, accurate and intact
supervisors authenticity, accuracy and original written materials or duplicates and information; such
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Party of
Matter of commitment Particulars
commitment
and senior integrity of information duplicates or photocopies are consistent with relevant original
executives provided materials or original copies; all the documents bear authentic
signature or seal and contain no false records, misleading statements
or major omissions whatsoever.
2. I myself give a pledge: the statement and confirmation issued for
the transaction is authentic, accurate and intact, and contains no false
records, misleading statements or major omissions whatsoever.
3. Depending on the process of the transaction, if related documents
and relevant information are further needed, I myself ensure that such
documents and information be provided in time, with guarantee on
the authenticity, accuracy and integrity of such information.
4. If the given or disclosed information in the transaction relates to
any false records, misleading statements or major omissions, and
causes losses to Hirisun or investors, I will bear liability of
compensation by law.
5. If the disclosed or given information in the transaction relates to
any false records, misleading statements or major omissions, as a
result of which, I am investigated and put on file by the judiciary or
inquired and put on file by the CSRC, shares of Hirisun shall not be
transferred before conclusions are drawn. And within two trading
days upon the receipt of notice on case investigation, suspended stock
accounts and relevant written request shall be handed over to the
board of Hirisun, which will then, on my behalf, apply for locking to
the stock exchange and securities depository and clearing agency; if
no application for locking is filed in within two trading days, the
mandated board of Hirisun shall verify and submit my personal
identity information and account information to the stock exchange
and securities depository and clearing agency in application for
locking; if the board of Hirisun fails to submit my personal identity
information and account information to the stock exchange and
securities depository and clearing agency, the stock exchange and
securities depository and clearing agency shall be authorized to lock
relevant shares. In case of any breaches of laws or regulations found
in the conclusion of investigation, I myself pledge to lock shares for
use subject to arrangements for compensation to relevant investors.
Statement on the plan for 1. From the date of resumption of trading till the completion of the
reduction of shares from transaction, I myself shall not reduce Hirisun's shares held, nor do I
the date of restructuring have any plans for reduction of Hirisun's shares.
and resumption of trading
till the completion of 2. In violation of the commitment, I myself will bear relevant legal
merger liability.
1. In the latest five years, the Company and all directors, supervisors
and senior executives thereof were put under no criminal or
administrative penalty (except for those apparently irrelevant with the
securities market); they involved no major civil lawsuit or arbitration
Hirisun and in connection with any economic disputes; and they were not
directors, investigated and put on file by the judiciary on suspicion of crime or
supervisors Statement on law abiding inquired and put on file by the CSRC on suspicion of breach against
and senior and integrity laws or regulations.
executives 2. In the latest five years, the Company and all directors, supervisors
thereof and senior executives thereof encountered no administrative
regulation measures of the CSRC or disciplinary sanctions of the
stock exchange for failing to repay large debt or to honor promises.
3. In the latest twelve months, the Company and all directors,
supervisors and senior executives thereof were not denounced in
public by the stock exchange or committed other dishonest acts, nor
32
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
did they have other records of bad conduct.
In violation of the confirmed contents above, the Company and all
directors, supervisors and senior executives thereof will bear relevant
legal liability of their own accord.
Till the issue date of the statement, the Company and all agencies
under control of the Company, directors, supervisors and senior
Statement of no executives of the Company were not investigated and put on file or
occurrence of inquired and put on file on suspicion of insider trading in connection
circumstances in Article with the transaction. Nor were they imposed any administrative
12 of Guide to Regulation penalty by CSRC or held accountable for criminal liability by the
of Listed Companies No.7 judiciary by law on suspicion of insider trading regarding material
- Regulation of asset restructuring in the latest 36 months.
Suspicious Stock In all, the Company and all agencies under control of the Company,
Transactions Regarding directors, supervisors and senior executives of the Company were not
Material Asset under circumstances prescribed in Article 12 of Guide to Regulation
Restructuring by Listed of Listed Companies No.7 - Regulation of Suspicious Stock
Companies Transactions Regarding Material Asset Restructuring by Listed
Companies: Not engaged in material asset restructuring by listed
companies.
1. The Company gives a pledge: all the transaction-related materials
provided to all intermediaries are authentic, accurate and intact
original written materials or duplicates and information; such
duplicates or photocopies are consistent with relevant original
materials or original copies; all the documents bear authentic
signature or seal and contain no false records, misleading statements
or major omissions whatsoever.
2. The Company gives a pledge: the statement and confirmation
Statement and issued for the transaction is authentic, accurate and intact, and
commitment of contains no false records, misleading statements or major omissions
HTC authenticity, accuracy and whatsoever.
integrity of information
3. Depending on the process of the transaction, if related documents
provided
and relevant information are further needed, the Company ensures
that such documents and information be provided in time, with
guarantee on the authenticity, accuracy and integrity of such
information.
4. If the given or disclosed information in the transaction relates to
any false records, misleading statements or major omissions, and
causes losses to the Company or investors, the Company will bear
liability of compensation by law.
1. I myself give a pledge: all the transaction-related materials
provided to all intermediaries are authentic, accurate and intact
original written materials or duplicates and information; such
duplicates or photocopies are consistent with relevant original
materials or original copies; all the documents bear authentic
HTC's Statement and signature or seal and contain no false records, misleading statements
directors, commitment of or major omissions whatsoever.
supervisors authenticity, accuracy and
and senior integrity of information 2. I myself give a pledge: the statement and confirmation issued for
executives provided the transaction is authentic, accurate and intact, and contains no false
records, misleading statements or major omissions whatsoever.
3. Depending on the process of the transaction, if related documents
and relevant information are further needed, the Company ensures
that such documents and information be provided in time, with
guarantee on the authenticity, accuracy and integrity of such
33
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
information.
4. If the given or disclosed information in the transaction relates to
any false records, misleading statements or major omissions, and
causes losses to HTC or investors, I will bear liability of
compensation by law.
5. If the disclosed or given information in the transaction relates to
any false records, misleading statements or major omissions, as a
result of which, I am investigated and put on file by the judiciary or
inquired and put on file by the CSRC, shares of HTC and Hirisun
shall not be transferred before conclusions are drawn. And within two
trading days upon the receipt of notice on case investigation,
suspended stock accounts and relevant written request shall be
handed over to the boards of HTC and Hirisun, which will then, on
my behalf, apply for locking to the stock exchange and securities
depository and clearing agency; if no application for locking is filed
in within two trading days, the mandated board of Hirisun shall verify
and submit my personal identity information and account information
to the stock exchange and securities depository and clearing agency in
application for locking; if the boards of HTC and Hirisun fails to
submit my personal identity information and account information to
the stock exchange and securities depository and clearing agency, the
stock exchange and securities depository and clearing agency shall be
authorized to lock relevant shares. In case of any breaches of laws or
regulations found in the conclusion of investigation, I myself pledge
to lock shares for use subject to arrangements for compensation to
relevant investors.
Statement on the plan for
1. From the date of resumption of trading till the completion of the
reduction of shares from
transaction, I myself shall not reduce HTC's shares held, nor do I have
the date of restructuring
any plans for reduction of HTC's shares.
and resumption of trading
2. In violation of the commitment, I myself will bear relevant legal
till the completion of
liability.
merger
1. In the latest five years, the Company and all directors, supervisors
and senior executives thereof were put under no criminal or
administrative penalty (except for those apparently irrelevant with the
securities market); they involved no major civil lawsuit or arbitration
in connection with any economic disputes; and they were not
investigated and put on file by the judiciary on suspicion of crime or
inquired and put on file by the CSRC on suspicion of breach against
laws or regulations.
2. In the latest five years, the Company and all directors, supervisors
HTC and Statement on law abiding and senior executives thereof encountered no administrative
directors, and integrity regulation measures of the CSRC or disciplinary sanctions of the
supervisors stock exchange for failing to repay large debt or to honor promises.
and senior
executives 3. In the latest twelve months, the Company and all directors,
thereof supervisors and senior executives thereof were not denounced in
public by the stock exchange or committed other dishonest acts, nor
did they have other records of bad conduct.
In violation of the confirmed contents above, the Company and all
directors, supervisors and senior executives thereof will bear relevant
legal liability of their own accord.
Statement of no Till the issue date of the statement, the Company and all agencies
occurrence of under control of the Company, directors, supervisors and senior
circumstances in Article executives of the Company were not investigated and put on file or
34
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
12 of Guide to Regulation inquired and put on file on suspicion of insider trading in connection
of Listed Companies No.7 with the transaction. Nor were they imposed any administrative
- Regulation of penalty by CSRC or held accountable for criminal liability by the
Suspicious Stock judiciary by law on suspicion of insider trading regarding material
Transactions Regarding asset restructuring in the latest 36 months.
Material Asset
Restructuring by Listed In all, the Company and all agencies under control of the Company,
Companies directors, supervisors and senior executives of the Company were not
under circumstances prescribed in Article 12 of Guide to Regulation
of Listed Companies No.7 - Regulation of Suspicious Stock
Transactions Regarding Material Asset Restructuring by Listed
Companies: Not engaged in material asset restructuring by listed
companies.
1. The Company gives a pledge to Hirisun, HTC and all
intermediaries involved in the transaction: all the transaction-related
materials provided to all intermediaries are authentic, accurate and
intact original written materials or duplicates and information; such
duplicates or photocopies are consistent with relevant original
materials or original copies, with legal procedures performed and
legal authorization obtained for signing or sealing the documents; all
the documents bear authentic signature or seal and contain no false
records, misleading statements or major omissions whatsoever.
2. The Company gives a pledge: the statement and confirmation
issued for the transaction is authentic, accurate and intact, and
contains no false records, misleading statements or major omissions
whatsoever.
3. Depending on the process of the transaction, if related documents
and relevant information are further needed, the Company ensures
that such documents and information be provided in time, with
guarantee on the authenticity, accuracy and integrity of such
information.
4. If the given or disclosed information in the transaction relates to
Statement and any false records, misleading statements or major omissions, and
commitment of causes losses to Hirisun, HTC or investors, the Company will bear
Hangzhou
authenticity, accuracy and liability of compensation by law.
Capital
integrity of information
provided 5. If the disclosed or given information in the transaction relates to
any false records, misleading statements or major omissions, as a
result of which, the Company is investigated and put on file by the
judiciary or inquired and put on file by the CSRC, the Company will
not transfer, directly or indirectly, shares of Hirisun or HTC before
conclusions are drawn. And within two trading days upon the receipt
of notice on case investigation, suspended stock accounts and
relevant written request shall be handed over to the boards of Hirisun
and HTC, which will then, on my behalf, apply for locking to the
stock exchange and securities depository and clearing agency; if no
application for locking is filed in within two trading days, the
mandated boards of Hirisun and HTC shall verify and submit the
Company's identity information and account information to the stock
exchange and securities depository and clearing agency in application
for locking; if the boards of Hirisun and HTC fail to submit the
Company's identity information and account information to the stock
exchange and securities depository and clearing agency, the stock
exchange and securities depository and clearing agency shall be
authorized to lock relevant shares. In case of any breaches of laws or
regulations found in the conclusion of investigation, the Company
gives a pledge to lock shares for use subject to arrangements for
compensation to relevant investors.
35
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
Statement on the opinions 1. In principle, the Company approves the transaction.
of principle about the
2. From the date of resumption of trading till completion of the
restructuring and plans for
transaction, the Company shall not directly or indirectly reduce held
reduction of shares from
shares of Hirisun or HTC. Nor shall the Company have any plans for
the date of restructuring
direct or indirect reduction of shares of Hirisun or HTC.
and resumption of trading
till the completion of In violation of the commitment, the Company will bear relevant legal
merger liability.
Till the issue date of the statement, the Company and all agencies
under control of the Company, directors, supervisors and senior
Statement of no executives of the Company were not investigated and put on file or
occurrence of inquired and put on file on suspicion of insider trading in connection
circumstances in Article with the transaction. Nor were they imposed any administrative
12 of Guide to Regulation penalty by CSRC or held accountable for criminal liability by the
of Listed Companies No.7 judiciary by law on suspicion of insider trading regarding material
- Regulation of asset restructuring in the latest 36 months.
Suspicious Stock In all, the Company and all agencies under control of the Company,
Transactions Regarding directors, supervisors and senior executives of the Company were not
Material Asset under circumstances prescribed in Article 12 of Guide to Regulation
Restructuring by Listed of Listed Companies No.7 - Regulation of Suspicious Stock
Companies Transactions Regarding Material Asset Restructuring by Listed
Companies: Not engaged in material asset restructuring by listed
companies.
I. Hirisun's human resources, assets, financial affairs, agencies and
businesses are categorically separate from those of the Company and
other companies under control of the Company, which is indicative of
independence and no merger of human resources, assets, financial
affairs, agencies and businesses between each other.
II. Upon the completion of the transaction, pledge is given that
Hirisun will keep human resources, assets, financial affairs, agencies
and businesses separate from those of the Company and other
companies under control of the Company, thus retaining the
independence of a listed company in terms of human resources,
assets, financial affairs, agencies and businesses, specifically as
follows:
(I) HR independence
Commitment to retaining 1. The Company gives a pledge: Hirisun's general manager, deputy
independence of a listed general manager, financial director, board secretary and other senior
company executives do not take up posts other than directorship and
supervisorship in the Company and other companies under control of
the Company, or get paid in the Company and other companies under
control of the Company; Hirisun's financial staff do not take up
concurrent posts and get paid in the Company and other companies
under control of the Company.
2. The Company gives a pledge: Hirisun has its own sound labor, HR
and compensation management systems, which are entirely
independent of those of the Company and other companies under
control of the Company.
(II) Asset independence and integrity
1. Pledge is given that Hirisun boasts facilities and supporting
facilities in connection with production and operation, owns land,
plant, equipment, as well as ownership and right to use trademarks,
patents and non-patented technologies in relation to production and
36
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
operation, and has its own purchasing and marketing system.
2. Pledge is given that Hirisun has its own assets in entirety, and all
such assets are wholly under control of Hirisun and solely owned and
run by Hirisun.
3. Pledge is given that the Company and other companies under
control of the Company illegally appropriate Hirisun's funds or assets
in any manners; guarantee is not given to the Company and other
companies under control of the Company, using Hirisun's assets.
(III) Financial independence
1. Pledge is given that Hirisun has set up an independent financial
department and financial accounting system. Pledge is given that
Hirisun has its own standardized financial accounting system and
financial management system for affiliates and subsidiaries thereof.
Pledge is given that Hirisun opens its own bank account, and does not
share a bank account with the Company and other companies under
control of the Company.
2. Pledge is given that Hirisun is capable of making independent
financial decisions, and the Company does not illegally intervene in
Hirisun's use and allocation of funds, or Hirisun's tax payment by law.
(IV) Organizational independence
1. Pledge is given that Hirisun has its own sound organization and is
capable of independently running the organization.
2. Pledge is given that Hirisun's workplace and premises are separate
from the Company's.
3. Pledge is given that Hirisun's board of directors, board of
supervisors and all functional departments are independently
functioning and not affiliated to the Company's functional
departments.
(V) Business independence
1. Pledge is given that Hirisun's businesses are independent of those
of the Company and other companies under control of the Company.
Pledge is given that Hirisun boasts assets, human resources,
qualifications and capabilities for carrying out operating activities on
its own, as well as abilities of making independent and sustainable
market-oriented operation.
2. Pledge is given that the Company does not intervene in Hirisun's
business activities, except for exercising rights as a shareholder.
The commitment retains binding to the Company or its actual
controller till they lose power of control over Hirisun. If the Company
causes any losses to Hirisun for failure of honoring the commitment,
the Company will bear relevant liability of compensation by law.
I. The Company pledges not to grant Hirisun and affiliates thereof the
priority over any third party on market in terms of business
cooperation, by taking advantage of its own status as the dominant
Commitment to reducing shareholder of Hirisun.
and standardizing related
party transaction II. The Company and other companies under control of the Company
will avoid engaging in related party transaction with Hirisun and
affiliates thereof as practical as possible.
III. Where related party transaction is inevitable or happens for
37
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
reason, the Company and other companies under control of the
Company will handle the transaction with Hirisun and affiliates
thereof on principles of fairness, justice and compensation of equal
value, and not engage in any acts that jeopardize the rights or interests
of Hirisun and other shareholders taking advantage of the transaction.
IV. Besides, the Company pledges that Hirisun will take precautions
below against any related party transaction with the Company:
1. In accordance with relevant laws, regulations and other normative
documents, as well as Hirisun's articles of association, and related
party transaction decision system, carry out related party transaction
decision procedures, for information disclosure in time.
2. On the principle of market economy, resort to market pricing for
setting trading price.
The commitment retains binding to the Company or its actual
controller till they lose power of control over Hirisun. If the Company
causes any losses to Hirisun for failure of honoring the commitment,
the Company will bear relevant liability of compensation by law.
1. For Hirisun's dissenting shareholders/HTC's dissenting
shareholders that submit a valid application for exercising the right of
claim for acquisition/cash-based option in line with procedures
prescribed in the plan for right of claim for acquisition/plan for
cash-based option as announced in due course by Hirisun/HTC, the
Company will unconditionally be transferred the right of claim for
acquisition/cash-based option exercised in valid application, except
for shares in the following cases:
(1) Right-restricting Hirisun's/HTC's shares, such as shares restricted
from transfer owing to any pledge, other third party rights, judicial
freezing and other circumstances prescribed by laws or regulations;
(2) Shares whose lawful holders pledge to waive the right of claim for
acquisition/cash-based option to Hirisun/HTC in writing;
(3) Other shares which the right of claim for acquisition/cash-based
option cannot be exercised in accordance with applicable laws.
The Company will pay cash consideration to Hirisun's dissenting
Commitment to granting shareholders by price of right of claim for acquisition, i.e., RMB
dissenting shareholders 9.56/share, and pay cash consideration to HTC's dissenting
right of claim for shareholders by price of cash-based option, i.e., RMB 7.11/share.
acquisition and
cash-based option In the event of distribution of cash dividends, stock dividends,
transfer of capital reserves for increase of capital stock, allotment of
shares or any other ex-right or ex-dividend matters regarding
Hirisun's/HTC/s shares between the base date of pricing the
stock-for-stock merger and the date of exercising the right of claim
for acquisition/cash-based option, the price of the right of claim for
acquisition/cash-based option will be adjusted accordingly. If price
adjustment is triggered, and Hirisun/HTC convenes a board meeting
for adjusting the price of right of claim for acquisition/cash-based
option through deliberation, the Company will pay cash consideration
to Hirisun's dissenting shareholders/HTC's dissenting shareholders
by adjusted price.
2. The provider of cash-based option shall proportionally convert all
HTC shares held into shares issued by Hirisun for the stock-for-stock
merger via the cash-based option transferred, on the date of
exercising the stock-for-stock merger.
3. The commitment will be made with the official seal of the
Company, and come into force as from the date of record of the CSRC
38
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
approval of the transaction and remain effective till the date of
completion of stock-for-stock merger in the transaction.
4. If the CSRC, stock exchange or any other competent authority
promulgates and enforces new regulations prior to completion of the
plan for right of claim for acquisition/cash-based option, the
Company will have the right to make adjustments to the commitment
in accordance with relevant regulations.
1. In the latest five years, the Company and all directors, supervisors
and senior executives thereof were put under no criminal or
administrative penalty (except for those apparently irrelevant with the
securities market); they involved no major civil lawsuit or arbitration
in connection with any economic disputes; and they were not
investigated and put on file by the judiciary on suspicion of crime or
inquired and put on file by the CSRC on suspicion of breach against
laws or regulations.
Statement on law abiding 2. In the latest five years, the Company and all directors, supervisors
and integrity and senior executives thereof encountered no administrative
regulation measures of the CSRC or disciplinary sanctions of the
stock exchange for failing to
3. In the latest twelve months, the Company and all directors,
supervisors and senior executives thereof were not denounced in
public by the stock exchange or committed other dishonest acts, nor
did they have other records of bad conduct.
In violation of what's confirmed above, the Company will bear
relevant legal liability of its own accord.
1. The Company gives a pledge to HTC and all intermediaries
involved in the transaction: all the transaction-related materials
provided to all intermediaries are authentic, accurate and intact
original written materials or duplicates and information; such
duplicates or photocopies are consistent with relevant original
materials or original copies, with legal procedures performed and
legal authorization obtained for signing or sealing the documents; all
the documents bear authentic signature or seal and contain no false
records, misleading statements or major omissions whatsoever.
2. The Company gives a pledge: the statement and confirmation
issued for the transaction is authentic, accurate and intact, and
contains no false records, misleading statements or major omissions
whatsoever.
Statement and
commitment of 3. Depending on the process of the transaction, if related documents
Turbine
authenticity, accuracy and and relevant information are further needed, the Company ensures
Holdings
integrity of information that such documents and information be provided in time, with
provided guarantee on the authenticity, accuracy and integrity of such
information.
4. If the given or disclosed information in the transaction relates to
any false records, misleading statements or major omissions, and
causes losses to HTC or investors, the Company will bear liability of
compensation by law.
5. If the information disclosed or given by the Company in the
transaction relates to any false records, misleading statements or
major omissions, as a result of which, the Company is investigated
and put on file by the judiciary or inquired and put on file by the
CSRC, shares of HTC and Hirisun shall not be transferred before
conclusions are drawn. And within two trading days upon the receipt
of notice on case investigation, suspended stock accounts and
39
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
relevant written request shall be handed over to the boards of HTC
and Hirisun, which will then, on my behalf, apply for locking to the
stock exchange and securities depository and clearing agency; if no
application for locking is filed in within two trading days, the
mandated board of Hirisun shall verify and submit the Company's
identity information and account information to the stock exchange
and securities depository and clearing agency in application for
locking; if the boards of HTC and Hirisun fails to submit the
Company's identity information and account information to the stock
exchange and securities depository and clearing agency, the stock
exchange and securities depository and clearing agency shall be
authorized to lock relevant shares. In case of any breaches of laws or
regulations found in the conclusion of investigation, the Company
gives a pledge to lock shares for use subject to arrangements for
compensation to relevant investors.
Statement on the opinions
of principle about the 1. In principle, the Company approves the transaction.
restructuring and plans for 2. From the date of resumption of trading till the completion of the
reduction of shares from transaction, the Company shall not reduce HTC's shares held, nor do I
the date of restructuring have any plans for reduction of HTC's shares.
and resumption of trading In violation of the commitment, the Company will bear relevant legal
till the completion of liability.
merger
Till the issue date of the statement, the Company and all agencies
under control of the Company, directors, supervisors and senior
Statement of no executives of the Company were not investigated and put on file or
occurrence of inquired and put on file on suspicion of insider trading in connection
circumstances in Article with the transaction. Nor were they imposed any administrative
12 of Guide to Regulation penalty by CSRC or held accountable for criminal liability by the
of Listed Companies No.7 judiciary by law on suspicion of insider trading regarding material
- Regulation of asset restructuring in the latest 36 months.
Suspicious Stock In all, the Company and all agencies under control of the Company,
Transactions Regarding directors, supervisors and senior executives of the Company were not
Material Asset under circumstances prescribed in Article 12 of Guide to Regulation
Restructuring by Listed of Listed Companies No.7 - Regulation of Suspicious Stock
Companies Transactions Regarding Material Asset Restructuring by Listed
Companies: Not engaged in material asset restructuring by listed
companies.
1. In the latest five years, the Company and all directors, supervisors
and senior executives thereof were put under no criminal or
administrative penalty (except for those apparently irrelevant with the
securities market); they involved no major civil lawsuit or arbitration
in connection with any economic disputes; and they were not
investigated and put on file by the judiciary on suspicion of crime or
inquired and put on file by the CSRC on suspicion of breach against
laws or regulations.
Statement on law abiding
2. In the latest five years, the Company and all directors, supervisors
and integrity
and senior executives thereof encountered no administrative
regulation measures of the CSRC or disciplinary sanctions of the
stock exchange for failing to repay large debt or to honor promises.
3. In the latest twelve months, the Company and all directors,
supervisors and senior executives thereof were not denounced in
public by the stock exchange or committed other dishonest acts, nor
did they have other records of bad conduct.
In violation of what's confirmed above, the Company will bear
40
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
relevant legal liability of its own accord.
I. Upon the completion of the transaction, pledge is given that Hirisun
will keep human resources, assets, financial affairs, agencies and
businesses separate from those of the Company and other companies
under control of the Company, thus retaining the independence of a
listed company in terms of human resources, assets, financial affairs,
agencies and businesses, specifically as follows:
(I) HR independence
1. The Company gives a pledge: Hirisun's general manager, deputy
general manager, financial director, board secretary and other senior
executives do not take up posts other than directorship and
supervisorship in the Company and other companies under control of
the Company, or get paid in the Company and other companies under
control of the Company; Hirisun's financial staff do not take up
concurrent posts and get paid in the Company and other companies
under control of the Company.
2. The Company gives a pledge: Hirisun has its own sound labor, HR
and compensation management systems, which are entirely
independent of those of the Company and other companies under
control of the Company.
(II) Asset independence and integrity
1. Pledge is given that Hirisun boasts facilities and supporting
facilities in connection with production and operation, owns land,
plant, equipment, as well as ownership and right to use trademarks,
patents and non-patented technologies in relation to production and
Commitment to retaining operation, and has its own purchasing and marketing system.
independence of a listed
company 2. Pledge is given that Hirisun has its own assets in entirety, and all
such assets are wholly under control of Hirisun and solely owned and
run by Hirisun.
3. Pledge is given that the Company and other companies under
control of the Company illegally appropriate Hirisun's funds or assets
in any manners; guarantee is not given to the Company and other
companies under control of the Company, using Hirisun's assets.
(III) Financial independence
1. Pledge is given that Hirisun has set up an independent financial
department and financial accounting system. Pledge is given that
Hirisun has its own standardized financial accounting system and
financial management system for affiliates and subsidiaries thereof.
Pledge is given that Hirisun opens its own bank account, and does not
share a bank account with the Company and other companies under
control of the Company.
2. Pledge is given that Hirisun is capable of making independent
financial decisions, and the Company does not illegally intervene in
Hirisun's use and allocation of funds, or Hirisun's tax payment by law.
(IV) Organizational independence
1. Pledge is given that Hirisun has its own sound organization and is
capable of independently running the organization.
2. Pledge is given that Hirisun's workplace and premises are separate
from the Company's.
3. Pledge is given that Hirisun's board of directors, board of
41
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Party of
Matter of commitment Particulars
commitment
supervisors and all functional departments are independently
functioning and not affiliated to the Company's functional
departments.
(V) Business independence
1. Pledge is given that Hirisun's businesses are independent of those
of the Company and other companies under control of the Company.
Pledge is given that Hirisun boasts assets, human resources,
qualifications and capabilities for carrying out operating activities on
its own, as well as abilities of making independent and sustainable
market-oriented operation.
2. Pledge is given that the Company does not intervene in Hirisun's
business activities, except for exercising rights as a shareholder.
The commitment retains binding to the Company or its actual
controller till they lose power of control over Hirisun. If the Company
causes any losses to Hirisun for failure of honoring the commitment,
the Company will bear relevant liability of compensation by law.
I. The Company pledges not to grant Hirisun and affiliates thereof the
priority over any third party on market in terms of business
cooperation, by taking advantage of its own status as the dominant
shareholder of Hirisun.
II. The Company and other companies under control of the Company
will avoid engaging in related party transaction with Hirisun and
affiliates thereof as practical as possible.
III. Where related party transaction is inevitable or happens for
reason, the Company and other companies under control of the
Company will handle the transaction with Hirisun and affiliates
thereof on principles of fairness, justice and compensation of equal
value, and not engage in any acts that jeopardize the rights or interests
Commitment to reducing of Hirisun and other shareholders taking advantage of the transaction.
and standardizing related
party transaction IV. Besides, the Company pledges that Hirisun will take precautions
below against any related party transaction with the Company:
1. In accordance with relevant laws, regulations and other normative
documents, as well as Hirisun's articles of association, and related
party transaction decision system, carry out related party transaction
decision procedures, for information disclosure in time.
2. On the principle of market economy, resort to market pricing for
setting trading price.
The commitment retains binding to the Company or its actual
controller till they lose power of control over Hirisun. If the Company
causes any losses to Hirisun for failure of honoring the commitment,
the Company will bear relevant liability of compensation by law.
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X. Opinions of principle of dominant shareholders of the M&A Parties and persons acting in
concert thereof, and plans for reduction of shares of the dominant shareholders and
directors, supervisors and senior executives thereof from the date of restructuring and
resumption of trading till the completion of merger
(I) Opinions of principle of dominant shareholders of the M&A Parties and persons acting in
concert thereof, and plans for reduction of shares of the dominant shareholders and
directors, supervisors and senior executives thereof from the date of restructuring and
resumption of trading till the completion of transaction
Concerning the opinions of principle over the restructuring and plans for reduction of shares from
the date of restructuring and resumption of trading till the completion of transaction, Hirisun’s
dominant shareholder Hangzhou Capital has declared as follows
“1. In principle, the Company approves the transaction.
2. From the date of resumption of trading till completion of transaction, the Company shall not
directly or indirectly reduce held shares of Hirisun or HTC. Nor shall the Company have any plans
for direct or indirect reduction of shares of Hirisun or HTC.
In violation of the commitment, the Company will bear relevant legal liability.”
Concerning the plans for reduction of shares in the transaction from the date of resumption of
trading till completion of transaction, Hirisun’s directors, supervisors and senior executives have
declared as follows:
“1. From the date of resumption of trading till completion of transaction, I myself shall not reduce
held shares of Hirisun. Nor shall I have any plans for reduction of shares of Hirisun.
2. In violation of the commitment, I myself will bear relevant legal liability.”
(II) Opinions of principle of dominant shareholders of the Acquiree and persons acting in
concert thereof, and plans for reduction of shares of the dominant shareholders and persons
acting in concert, directors, supervisors and senior executives thereof from the date of
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resumption of trading till the completion of transaction
Concerning the opinions of principle over the restructuring and plans for reduction of shares from
the date of resumption of trading till the completion of transaction, HTC’s dominant shareholder
Turbine Holdings has declared as follows
“1. In principle, the Company approves the transaction.
2. From the date of resumption of trading till completion of transaction, the Company shall not
reduce held shares of HTC. Nor shall the Company have any plans for reduction of shares of HTC.
In violation of the commitment, the Company will bear relevant legal liability.”
Concerning the plans for reduction of shares in the transaction from the date of resumption of
trading till the completion of transaction, HTC’s directors, supervisors and senior executives have
declared as follows:
“1. From the date of resumption of trading till completion of transaction, I myself shall not reduce
held shares of HTC. Nor shall I have any plans for reduction of shares of HTC.
2. In violation of the commitment, I myself will bear relevant legal liability.”
XI. Arrangements for protection of rights and interests of small- and medium-sized investors
in the transaction
(I) Discharge of obligation of information disclosure
To protect legitimate rights and interests of investors and safeguard order of securities market,
Hirisun, HTC and related parties of information disclosure will faithfully perform the obligation of
information disclosure in accordance with the Securities Law, Measures for the Administration of
Information Disclosure by Listed Companies, Measures for the Administration of Restructuring
and relevant laws, regulations and normative documents. Disclosing all relevant information
which may make a difference in the share trading price of Hirisun or HTC or decisions of
investors in an open and fair way, Hirisun, HTC and related parties of information disclosure shall
give a pledge on the authenticity, accuracy, integrity and immediacy of the disclosed information.
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(II) Implementation of relevant approval requirements
Concerning the transaction, Hirisun and HTC have carried out legal voting procedures and duties
of disclosure in compliance with relevant provisions. Since the transaction constitutes a related
transaction, related directors have evaded voting. Independent directors have formed a resolutions
over relevant proposals at a special meeting. For deliberation on the transaction-related proposals
at the meetings of shareholders of Hirisun and HTC, related shareholders will evade voting.
(III) Provision of online voting platform for shareholders’ meeting
Pursuant to related regulations of the CSRC and SZSE, Hirisun and HTC will set up an online
voting platform for facilitating shareholders attending the shareholders’ meeting to vote for the
transaction plan, thus ensuring the shareholders can vote and exercise their rights as shareholders
online.
(IV) Arrangement on the right of claim for acquisition and cash-based option
To fully safeguard rights and interests of small- and medium-sized investors concerned in the
stock-for-stock merger, Hirisun's dissenting shareholders will be granted the right of claim for
acquisition and HTC's dissenting shareholders the cash-based option. For details of arrangement,
refer to “Chapter I Overview of Transaction” - “II. Concrete transaction plan” - “(II) Merger plan”
- “9. Mechanism for protection of interest of Hirisun’s dissenting shareholders” and “10.
Mechanism for protection of interest of HTC’s dissenting shareholders” in the plan.
XII. Notification of information for additional disclosure
All the work in connection with the transaction is yet to complete, and some data concerned in the
plan are not audited by an accounting firm prescribed by the Securities Law. So discrete use of
relevant information is advised for investors.
Upon the completion of all the transaction-related work, Hirisun and HTC shall otherwise convene
a board meeting, to deliberate on other unsettled matters regarding the transaction and prepare a
report on stock-for-stock merger. Meanwhile, they shall perform relevant procedures for board
deliberation. The audited historical financial data, financial data for reference and valuation will
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be disclosed in the report on stock-for-stock merger.
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Notification of Major Risks
For evaluation of the transaction, investors shall carefully take the following risk factors into
account:
I. The risk of the transaction being suspended, halted or called off
Though the M&A Parties take precautions for secrecy, take the initiative to manage insider
information and narrow down scope of people aware of insider information amid the planning and
implementation of the transaction for avoidance of communication of insider information, it cannot
rule out the possibility that related agencies and individuals engage in insider trading using the
transaction-related insider information. Therefore, the transaction is at a risk of being suspended,
halted or called off owing to abnormal fluctuation of stock price or abnormal trading, on suspicion
of insider trading.
In view of the complexity of the transaction, there is a certain span from the signing of the
transaction-related agreement till the completion of the transaction, relevant policy changes,
contingencies or force majeure factors on stock market may affect the progress of the transaction,
thus making the transaction at risk of being suspended, halted or called off.
If the transaction is suspended, halted or called off for the above reason, and transaction-related
parties plan to restart the transaction, major changes may happen to the transaction plan and other
transaction-related terms and conditions relative to the disclosed restructuring plan in the plan, so
investors should be on the alert for relevant risks.
II. Risk of approval of the transaction
The transaction-related proposals have been put under deliberation at the fourth interim session
of the sixth board of Hirisun and tenth session of the ninth board of HTC in 2024. Till the signing
date of the plan, the transaction is yet to meet a plurality of conditions for implementation, as shown
in the plan's "Notification of Material Matters" - "VIII. Completed and outstanding
transaction-related procedures" - "(II) Pending approval for the transaction".
The transaction shall not be carried out until it is ratified, approved or accepted and put on file
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as stated above. There is uncertainty about whether and when the transaction is ratified, approved or
accepted and put on file as stated above, thus investors should be on the alert for relevant risks.
III. Risk in connection with right of claim for acquisition and cash-based option
To fully safeguard the benefits of shareholders of Hirisun and of HTC, eligible Hirisun's
dissenting shareholders shall be granted right of claim for acquisition and eligible HTC's dissenting
shareholders shall be granted cash-based option in the stock-for-stock merger. If the stock-for-stock
merger cannot be carried out at last, Hirisun's and HTC's dissenting shareholders shall not exercise
the right of claim for acquisition or cash-based option, and claim any compensations or indemnities
to the M&A Parties on that account.
If Hirisun's stock price is above the price of the right of claim for acquisition when Hirisun's
dissenting shareholders request for exercising the right of claim for acquisition, or HTC's stock price
is above the price of the cash-based option when HTC's dissenting shareholders request for
exercising the cash-based option, Hirisun's and HTC's dissenting shareholders may have their
benefits impaired in request for exercising the right of claim for acquisition or cash-based option. In
addition, dissenting shareholders who request for exercising the right of claim for acquisition or
cash-based option may also be deprived of the opportunity of benefiting from further rise of stock
price of the surviving company.
Investors should be on the alert for relevant risks.
IV. Risk of forced stock-for-stock merger
The transaction is yet to be approved by Hirisun's and HTC's boards of shareholders through
deliberation at relevant meetings. The resolutions adopted at shareholders' meetings of the M&A
Parties are binding to all shareholders (including shareholders that vote against, abstain or are absent
from the shareholders' meetings and designate no agents for voting) of the M&A Parties. After
essential ratification or approval is granted for the plan for stock-for-stock merger, on the date of
record of stock-for-stock merger, HTC's shares held by HTC shareholders that make no request,
request in part, are ineligible or invalid in request for exercising the cash-based option, and HTC's
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shares held by the provider of cash-based option for granting the cash-based option, will be
proportionally converted into A-shares issued by Hirisun in whole for the stock-for-stock merger.
For HTC's shares that have a pledge, are frozen by judiciary, or restricted from transfer by law,
such shares shall be converted into Hirisun's shares, and the pledge, judicial freezing or other
right-restricting circumstances regarding HTC's shares will remain in force to relevant Hirisun's
shares in stock-for-stock merger.
Investors should be on the alert for relevant risks.
V. Risk of creditors' request for paying off debt in advance or providing guarantee
Upon the completion of the stock-for-stock merger, HTC will be delisted and disqualified from
being a corporation, while Hirisun will inherit and take on all HTC's assets, liabilities, businesses,
human resources, contracts and all the other rights and obligations. Pursuant to relevant laws and
regulations, Hirisun and HTC will carry out procedures of notification and announcement to
creditors, and depending on requirements raised by respective creditors within statutory period,
repay the debt in advance or otherwise provide guarantee for respective creditors, or urge third party
to do so.
At the moment, Hirisun and HTC have no external bonds issued, which is indicative of no
relevance to matters of convening a meeting of bond holders. Though the M&A Parties will actively
seek the understanding and approval of the merger from creditors, there is uncertainty in creditors'
opinions about the merger. If creditors of the M&A Parties make a request for repaying the debt in
advance or otherwise providing a guarantee, it may make a difference in Hirisun's and HTC's
financial conditions in the short term. Investors should be on the alert for relevant risks.
VI. Risk of outstanding work of audit and valuation
Till the signing date of the plan, all the work in connection with the transaction is yet to
complete, and some data concerned in the plan are not audited by an accounting firm prescribed by
the Securities Law. So discrete use of relevant information is advised for investors. Hirisun's and
HTC's boards of directors and all board members thereof give a pledge on the authenticity and
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rationality of relevant data cited from the plan.
Upon the completion of all the transaction-related work, Hirisun and HTC shall otherwise
convene a board meeting, to deliberate on other unsettled matters regarding the transaction and
prepare a report on stock-for-stock merger. Meanwhile, they shall perform relevant procedures for
deliberation at shareholders' meeting. The audited historical financial data, financial data for
reference and valuation will be disclosed in the report on stock-for-stock merger, and final results
may differ from what's disclosed in the plan. Investors should be on the alert for relevant risks.
VII. Risk of industrial policy
The industrial turbine manufacturing industry which the surviving company belongs to is
highly susceptible to national policy of "carbon peaking and neutrality", policy of equipment
renewal, and global trading policies. China now promotes the strategy of innovation-driven
development, keeps improving the green and low-carbon policy, and tightens management of
energy saving and emissions reduction, while scaling up equipment renewal and accelerating
industrial upgrading. Major adjustments or changes to relevant policies, if any, may make severely
adverse impact on the R&D, production and sales of staples of the surviving company in the future.
Investors should be on the alert for relevant risks.
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Chapter I Overview of Transaction
I. Background and objective of transaction
(I) Background of transaction
1. Comprehensively promote the deepening of the reform of state-owned enterprises and
encourage the improvement of the quality of listed companies
The report of the 20th National Congress of the Communist Party of China clearly stated that
to accelerate the construction of a new development pattern and focus on promoting high-quality
development, it is necessary to deepen the reform of state-owned assets and state-owned
enterprises, accelerate the optimization of the layout and structural adjustment of the state-owned
economy, promote state-owned capital and state-owned enterprises to become stronger, better and
bigger, and enhance the core competitiveness of enterprises. The "Opinions of the State Council
on Further Improving the Quality of Listed Companies" clearly stated that improving the quality
of listed companies is an inherent requirement for promoting the healthy development of the
capital market, and is an important part of accelerating the improvement of the socialist market
economy system in the new era, and it’s required to continuously improve the governance level of
listed companies and promote listed companies to become better and stronger.
As a subsidiary of Hangzhou SASAC, the Transaction is an important measure to thoroughly
implement the Xijinping’s socialist thought with Chinese characteristics in the new era and the
spirit of the Third Plenary Session of the 20th Central Committee of the Communist Party of
China, and to implement the guiding ideology of the Party Central Committee and the State
Council to deepen the reform of state-owned enterprises, which will help improve the industrial
layout of state-owned listed companies, improve asset quality and operational efficiency, and
realize the preservation and appreciation of state-owned assets.
2. National policies encourage mergers and acquisitions and mergers and acquisitions
between listed companies
In March 2024, the China Securities Regulatory Commission (CSRC) issued the "Opinions on
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Strengthening the Supervision of Listed Companies (Trial)", which clearly proposes to support
listed companies to enhance their investment value through mergers and acquisitions, and
encourages listed companies to comprehensively use shares, cash, directional convertible bonds
and other tools to implement mergers and acquisitions, inject high-quality assets, and support the
absorption and merger of listed companies. In April 2024, the State Council issued the "Several
Opinions on Further Promoting the Healthy Development of the Capital Market", proposing to
give full play to the role of the capital market as the main channel in the process of mergers and
acquisitions, strengthen the property rights pricing and transaction functions of the capital market,
broaden the financing channels for mergers and acquisitions, and enrich the payment methods for
mergers and acquisitions. In September 2024, the China Securities Regulatory Commission
(CSRC) issued the Opinions on Deepening the Reform of the M&A and Restructuring Market for
Listed Companies to further optimize the restructuring review process, improve the efficiency of
restructuring review, and activate the M&A and restructuring market. It supports the absorption
and merger of the same industry, upstream and downstream between listed companies not under
the common control, and the absorption and merger between listed companies under the common
control. With the support of a number of policies, China's capital market mergers and acquisitions
have entered an "active period".
The Transaction is a positive response to the encouragement of mergers and acquisitions and
the absorption and merger of listed companies by the State Council and the China Securities
Regulatory Commission, which will help promote the strong quality and external image of the
surviving company, improve the asset quality and operational efficiency of the listed companies,
thereby enhancing the sustainable profitability of the listed company and enhancing the
investment value of the listed company.
(II) Objective of transaction
1. Addressing the legacy of B-shares and augmenting HTC's financing capacity
HTC went public on SZSE B-share market in 1998, with IPO of HKD 171,200,000.
Subsequently, confined by listing and financing on B-share market, HTC was perpetually unable to
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raise funds through capital market upon its IPO. Moreover, HTC's B-shares has poor liquidity and
stock valuation under prices that of any counterpart listed company on A-share market, which
conspires against the company's development and realization of interest of small-and medium-sized
shareholders.
Since its IPO, HTC has clawed its way to make solid progress, and now become a leading
industrial turbine provider in China's high-end equipment industry. In the face of intensifying
marketplace and new trends of industrial development, the transaction is conducive to addressing
the legacy of HTC. With more financing channels and greater financing capacity, the company will
become a more profitable and premium listed company by leverage of the capital market.
2. Boosting homemade gas turbine production, as high-quality guarantee for implementation
of the national strategy of "engine and turbine project"
Therefore, as the pillar equipment of the clean and low-carbon energy system under the
strategy of "carbon peak and carbon neutrality", it is urgent to comprehensively improve the
development and demonstration application of domestic independent gas turbines, so that the
independent and controllable core technologies continue to mature in application practice and
realize domestic substitution. In 2016, China fully launched the implementation of the
"two-engine special project", hoping to break through the core technology of gas turbines, break
the monopoly of foreign products, and accelerate the independent innovation and development of
China's gas turbine industry.
Upon the transaction, the surviving company will, by leverage of the capital market, continue
to strengthen the development and application of homemade gas turbines, boost development of
independent innovation of China's gas turbine industry, as an act of contributing to the
implementation of the national strategy of "engine and turbine project".
3. Clearing the bottleneck for growth of Hirisun, and increasing core competence and
investment value of the listed company
In increasingly cut-throat marketplace, Hirisun is facing a bottleneck for performance growth,
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thus urgently seeking transformation and upgrading. Upon the completion of the transaction, the
surviving company will scale up production, diversify product portfolios, and improve technical
strength and management operation. Using market-oriented instruments, it will spur the M&A
Parties into deepening reforms, while refining its own governance structure. The integrated
development and mutual promotion of industrial operation and capital operation will spark
high-quality development of the surviving company. The development of the electric power
information business in tandem with industrial turbine business will further strengthen core
competence and sustainable profitability of the surviving company and increase its investment
value.
II. Transaction plan
(I) Overview of transaction plan
Hirisun intends to issue A-shares to all HTC shareholders concerned, for stock-for-stock
merger of HTC. Hirisun acts as the acquirer, and HTC acts as the acquiree. That is to say, Hirisun
issues A-shares to all HTC shareholders concerned, in exchange for HTC shares held by these
shareholders.
Upon the completion of the stock-for-stock merger, HTC will be delisted and disqualified from
being a corporation, while Hirisun will inherit and take on all HTC's assets, liabilities, businesses,
human resources, contracts and all the other rights and obligations. Hirisun will request for listing
and circulating A-shares issued by Hirisun for the stock-for-stock merger on SZSE ChiNext market.
(II) Merger plan
1. Both parties of share exchange and merger
The merger party of this share exchange absorption merger is Hirisun, and the absorbed merger
party is HTC.
2. Method of share exchange and absorption merger
Hirisun will issue A shares as consideration to all the share exchange shareholders of HTC, and
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absorb and merge HTC through share exchange, and the shares held by all the shareholders of
HTC will be converted into A shares of Hirisun in accordance with the share exchange ratio.
As the merger party and surviving company of this merger, Hirisun will inherit and undertake all
the assets, liabilities, business, personnel and all other rights and obligations of HTC; As the
merged party of this merger, HTC will terminate its listing and cancel its legal personality.
3. The type and par value of the shares to be issued in exchange for shares
The type of shares issued by Hirisun as a result of this merger is domestically listed RMB
ordinary shares (A shares), with a par value of 1.00 yuan per share.
4. The object of the share exchange and the registration date of the merger
The issuance object of this merger is all shareholders of HTC registered after the market close on
the equity registration date of the merger implementation, that is, on the equity registration date
of the implementation of the merger, the shareholders of HTC who have not declared, partially
declared, have no right to declare or invalidly declare the exercise of the cash option, as well as
the provider of the cash option (if it has actually paid cash consideration to the shareholders who
exercise the cash option and transferred the shares of HTC), and all the shares held by the share
exchange object will be converted into A shares issued by Hirisun due to the merger in
accordance with the share exchange ratio.
The board of directors of the two parties will separately negotiate and announce the equity
registration date for the implementation of the merger after the transaction is approved by the
Shenzhen Stock Exchange (hereinafter referred to as the "Shenzhen Stock Exchange") and the
China Securities Regulatory Commission agrees to register.
5. The exchange price and the exchange ratio
The pricing benchmark date of the merger is the date of the announcement of the first board
resolution of the two parties. Taking into account factors such as historical stock price, operating
performance, market capitalization, etc., in accordance with the relevant provisions of the
"Restructuring Management Measures", and after negotiation between the two parties of the
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merger, the exchange price of Hirisun is determined to be 9.56 yuan per share according to the
average stock trading price of the 20 trading days before the pricing benchmark date. The
average stock trading price of HTC is HK$7.77 per share according to the average stock trading
price of 20 trading days before the pricing benchmark date, which is equivalent to RMB 7.11 per
share by converted according to the median price of RMB to Hong Kong dollar announced by
the People's Bank of China on October 25, 2024 (HK$1 = 0.91496 RMB) that is the trading day
before HTC share suspension.
It’s finally determined that the exchange price of HTC is to give a premium of 34.46% on this
basis, and the exchange price of HTC = the average trading price of HTC * (1 + premium rate) =
9.56 yuan / share, and the number of shares of Hirisun that can be exchanged for each 1 share of
HTC = the exchange price of HTC / the exchange price of Hirisun. According to the above
formula, the exchange ratio between HTC and Hirisun is 1:1, that is, every 1 share of HTC can
be exchanged for 1shares of Hirisun share.
From the pricing benchmark date of the merger to the implementation date of the share exchange
(both dates inclusive), the share exchange ratio shall not be adjusted under any other
circumstances, except for the distribution of cash dividends, stock dividends, capital reserve
conversion to share capital, allotment and other ex-rights and dividends by either party to the
merger, or in the event that the exchange price needs to be adjusted in accordance with the
requirements of relevant laws, regulations or regulatory authorities.
6. The number of shares to be issued in exchange for shares
Up to now, the total share capital of HTC is 1,175,009,597 shares, and the shares of HTC
participating in this share exchange are 1,175,009,597 shares. Calculated with reference to the
share exchange ratio, the total number of shares issued by Hirisun for this share exchange is
1,175,009,597 shares.
If either of the two parties to the merger has any ex-rights and dividends such as cash dividends,
stock dividends, capital reserve conversion to share capital, allotment and other ex-rights and
dividends from the pricing benchmark date to the share exchange date (both dates inclusive), or
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the stock repurchase and cancellation of HTC, the number of shares issued by the
above-mentioned exchange shall be adjusted accordingly.
The A-shares of Hirisun obtained by the share exchange shareholders of HTC shall be integers.
If the amount obtained by multiplying the HTC shares held by the exchange ratio is not an
integer, then one share will be issued to each shareholder in descending order according to the
mantissa after the decimal point until the actual number of shares exchanged matches the
planned number of shares. If there are more shares with the same ending than the remaining
number, the computer system will randomly distribute them until the actual number of shares
exchanged matches the planned number of shares to be issued.
7. The place of listing of the shares issued by the exchange of shares
The A-shares issued by Hirisun for this share exchange will be applied for listing and circulation
on the Growth Enterprise Market of the Shenzhen Stock Exchange.
8. Disposal of shares held by shareholders whose rights are restricted in share exchange
For the shares of HTC that have been pledged, frozen by the judiciary or restricted by laws and
regulations from transferring, such shares will be converted into shares of Hirisun when they are
exchanged, and the pledge, judicial freezing status or other rights restrictions originally set on
the shares of HTC will continue to be valid on the corresponding shares of Hirisun in exchange.
9. The interest protection mechanism of Hirisun dissenting shareholders
In order to protect the interests of Hirisun shareholders and reduce the impact of Hirisun 's stock
price fluctuations on investors after the merger, in accordance with the relevant provisions of
"The Company Law" and the "Articles of Association of Hangzhou Hirisun Technology Co.,
Ltd.", Hirisun 's dissenting shareholders will be given the appraisal rights in this merger.
(1) Dissenting shareholders of Hirisun
The dissenting shareholders of Hirisun who have the right to exercise appraisal rights refer to the
shareholders of HTC who have voted valid against at the shareholders’’ meeting to all the
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relevant proposals on the merger plan and the sub-proposals voted on one by one and on the
relevant proposals on the merger agreement signed by the two parties to the merger, and have
continued to hold the shares representing the objection rights until the implementation date of
the appraisal rights request of the dissenting shareholders of Hirisun, and meanwhile have
performed the relevant reporting procedures within the specified time.
(2) The provider of the appraisal rights
Hangzhou State-owned Capital Investment and Operation Co., Ltd. (hereinafter referred to as
"Hangzhou Capital"), as the provider of the appraisal rights, provides the appraisal rights to the
dissenting shareholders of Hirisun. Dissenting shareholders of Hirisun shall no longer assert the
right to claim the appraisal rights from Hirisun or any shareholder of Hirisun who agrees to the
merger. After the Transaction is registered by the China Securities Regulatory Commission, the
provider of the appraisal rights promised to unconditionally accept the shares held by the
dissenting shareholders of Hirisun who had successfully declared the exercise of the appraisal
rights on the implementation date of the appraisal rights claim, and pay the corresponding cash
consideration to the dissenting shareholders of Hirisun according to the price of the appraisal
rights claim.
(3) The price of the appraisal rights claim
The price of the appraisal rights request of the dissenting shareholders of Hirisun is the average
trading price of the A-shares in the 20 trading days before the suspension of the Hirisun A-shares
(i.e., the 20 trading days before the pricing benchmark date), that is, 9.56 yuan per share.
If the distribution of cash dividends, stock dividends, capital reserve to share capital, allotment
and other ex-rights and dividends occurs from the pricing benchmark date to the implementation
date of the appraisal rights request (both dates inclusive), the appraisal rights price shall be
adjusted accordingly.
(4) The price adjustment mechanism for appraisal rights
1) Adjustment object
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The object of adjustment is the price of the appraisal rights of the dissenting shareholders of
Hirisun.
2) The conditions under which the price adjustment plan will take effect
(1) The state-owned assets authority approves the price adjustment plan;
(2) The general shareholders' meeting of Hirisun deliberated and approved the price adjustment
plan;
(3) The general shareholders' meeting of HTC deliberated and approved the price adjustment
plan.
3) The period in which the price can be adjusted
From the announcement date of the resolution of the merger deliberated and approved in the
Hirisun general shareholders' meeting to the date before the China Securities Regulatory
Commission agreed to register the Transaction.
4) Trigger condition
From the announcement of the first board resolution of Hirisun to the time when the China
Securities Regulatory Commission agrees to register the Transaction, if any of the following two
circumstances occur, the board of directors of Hirisun has the right to hold a meeting within the
price adjustment period to consider whether to make an adjustment to the price of the appraisal
rights:
A. The Growth Enterprise Index(399006. SZ) has a closing point drop of more than 20% in at
least 10 out of 20 consecutive trading days prior to any trading day compared to the closing
point of the previous trading day before the suspension of trading on the A-share market of
Hirisun ; And prior to the trading day, the daily trading average price of Hirisun A-shares has
fallen by more than 20% in at least 10 consecutive trading days compared to the trading average
price of Hirisun A-shares in the 20 trading days before the suspension of trading (i.e. the 20
trading days before the pricing benchmark date);
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Or
B. Wind Information Technology Service Index (866311. WI) has a closing point drop of more
than 20% in at least 10 of the 20 consecutive trading days prior to any trading day compared to
the closing point of the trading day before the suspension of the A-share trading of Hirisun; And
prior to the trading day, the daily average trading price of Hirisun A-shares had fallen by more
than 20% in at least 10 out of 20 consecutive trading days compared to the average trading price
of Hirisun A-shares in the 20 trading days before the suspension of trading (i.e. the 20 trading
days before the pricing benchmark date).
5) Adjustment mechanism and price adjustment benchmark date
The board of directors of Hirisun shall convene a meeting of the board of directors within 20
trading days from whichever date is later-the date to the first achievement of the trigger
conditions for price adjustment and the date on which the effective conditions of the price
adjustment plan are met, and deliberate and decide whether to adjust the price of the appraisal
rights of the dissenting shareholders of Hirisun in accordance with the price adjustment plan.
During the price adjustment period, Hirisun will only adjust the price of the dissenting
shareholder's appraisal rights once. If Hirisun has convened a meeting of board of directors to
review and decide to adjust the price of the dissenting shareholder's appraisal rights, and the
price adjustment condition is triggered again, no further adjustment will be made;; If the board
of directors has convened a meeting to deliberate and decide not to adjust the price of the
appraisal rights of the dissenting shareholder, and the price adjustment condition is triggered
again, no further adjustment will be made.
The benchmark date for price adjustment is the next trading day after the date of achievement of
the above-mentioned trigger conditions. The adjusted price of the appraisal rights of dissenting
shareholders is the average trading price of the stock in the 20 trading days prior to the
benchmark date of the price adjustment.
(5) Exercise of the appraisal rights
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After the transaction is registered with the China Securities Regulatory Commission, Hirisun
will determine the equity registration date for the implementation of the appraisal rights. The
dissenting shareholders who exercise the appraisal rights may obtain the cash consideration paid
by the provider of the appraisal rights according to the price of the appraisal rights on the
implementation date of each share of the appraisal rights that they have validly declared, and at
the same time transfer the corresponding shares to the name of the provider of the appraisal
rights. The provider of the appraisal rights shall acquire all the shares of Hirisunon the
implementation date of the appraisal rights exercised by the dissenting shareholders of Hirisun,
and pay the cash consideration accordingly.
The following conditions must be met at the same time for the registered dissenting shareholders
of Hirisun to exercise the appraisal rights: (1) as far as the shareholders of Hirisun are concerned,
they have cast valid negative votes on the relevant proposals on the merger plan and the
sub-proposals voted on one by one at the general shareholders' meeting of Hirisun on the merger
plan and on the relevant proposals on the merger agreement signed by the two parties to the
merger; (2) From the record date of the shareholders' meeting at which Hirisun deliberated on
the merger, as a validly registered shareholder of Hirisun, continue to hold the shares
representing the right of opposition until the implementation date of the appraisal rights; (3)
Successfully perform the relevant declaration procedures within the filing period of the appraisal
rights claim. Shareholders who meet the above conditions are only entitled to exercise the
appraisal rights of shares for which they have cast a valid negative vote. If the dissenting
shareholders of Hirisun sell their shares (including but not limited to being forcibly deducted by
the judiciary) after the registration date of the general shareholders' meeting of the merger of
Hirisun's share exchange and absorption, the number of shares entitled to exercise the appraisal
rights shall be reduced accordingly; If the dissenting shareholders of Hirisun purchase shares
after the registration date of the shareholders' meeting of the merger of Hirisun's share exchange
and absorption, the number of shares entitled to the appraisal rights shall not increase, and such
shares shall not enjoy the appraisal rights.
The dissenting shareholders of Hirisun of the register who hold the following shares shall not
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have the right to assert the appraisal rights of the shares they hold: (1) the shares of Hirisun with
rights restrictions, such as the shares that have been pledged or set with other third-party rights
or are restricted by laws and regulations such as judicial freeze; (2) its legal holder undertakes in
writing to give up the appraisal rights of shares of the dissenting shareholder; and (3) other
shares that are not subject to the exercise of the appraisal rights under applicable law.
Dissenting shareholders who have submitted Hirisun's shares as collateral for margin trading
must transfer Hirisun's shares from the securities company's customer credit guarantee account
to their ordinary securities account before the equity registration date of the appraisal rights
request before they can exercise the appraisal rights. Dissenting shareholders of Hirisun who
have carried out the agreed repurchase securities transaction must complete the early repurchase
procedures in a timely manner before they can exercise the appraisal rights before the equity
registration date of the appraisal rights claim.
The relevant taxes and fees arising from the exercise of the appraisal rights shall be borne by the
dissenting shareholders of Hirisun who exercise the appraisal rights. The provider of the
appraisal rights and other entities shall bear the responsibility in accordance with relevant laws,
regulations, regulatory authorities, and securities registration and settlement institutions. If there
is no clear regulation on this by laws, regulations, regulatory authorities, and securities
registration and settlement institutions, the parties shall negotiate and resolve it in accordance
with market practices.
If the merger proposal fails to obtain permit or approval from the general shareholders' meeting
or relevant regulatory or government departments by both parties, resulting in the ultimate
inability to implement the merger, the dissenting shareholders of Hirisun cannot exercise their
appraisal rights, nor can they claim any compensation or indemnification from the merging
parties.
After the transaction is approved and registered by the China Securities Regulatory Commission,
Hirisun will separately announce the detailed arrangements for the appraisal rights request plan
of Hirisun dissenting shareholders (including but not limited to the declaration, settlement and
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delivery of the appraisal rights), and will disclose information in a timely manner in accordance
with laws, regulations and the provisions of the Shenzhen Stock Exchange.
10. Mechanism for protecting the interests of dissenting shareholders of HTC
In order to protect the interests of the shareholders of HTC and reduce the impact of the
fluctuation of the stock price of HTC on investors after the merger, in accordance with the
relevant provisions of The Company Law and the Articles of Association of Hangzhou Turbine
Power Group Co., Ltd., the dissenting shareholders of HTC will be given the cash option right in
this merger.
(1) Dissenting shareholders of HTC
The dissenting shareholders of HTC who have the right to exercise the cash option refer to the
shareholders who participated in the general shareholders' meeting held by HTCand votedvalid
against to all the merger plan and the sub-proposals voted on one by one and to the relevant
proposals on the merger agreement signed by the two parties in the merger, and have continued
to hold the shares representing the objection right until the implementation date of the cash
option of the dissenting shareholders of HTC, and at the same time perform the relevant
declaration procedures within the specified time.
(2) The provider of the cash option
Hangzhou Capital, as the provider of the cash option, provides the cash option to the dissenting
shareholders of HTC. The dissenting shareholders of HTC shall no longer claim the cash option
from HTC or any shareholder of HTC who agrees to the merger. After the Transaction is
registered with the China Securities Regulatory Commission, the provider of the cash option
shall undertake unconditionally to accept the shares held by the dissenting shareholders of HTC
who successfully declared the exercise of the cash option on the implementation date of the cash
option, and pay the corresponding cash consideration to the dissenting shareholders of HTC
according to the cash option price.
(3) The price of the cash option
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The cash option price of the dissenting shareholders of HTC is the average trading price of
B-shares for the 20 trading days before the suspension of trading of HTC's B-shares (i.e. 20
trading days before the pricing benchmark date), that’s HK$7.77 per share, which is equivalent
to RMB7.11 per share by converted according to the median price of RMB to Hong Kong dollar
announced by the People's Bank of China on October 25, 2024 (HK$1 = 0.91496 RMB) that is
the trading day before HTC share suspension. If there are ex-rights and dividends such as cash
dividends, stock dividends, conversion of capital reserve to share capital, and allotment from the
pricing benchmark date to the implementation date of the cash option (both dates inclusive), the
cash option price will be adjusted accordingly.
(4) the price adjustment mechanism for cash option
1) Adjustment object
The object of adjustment is the cash option price of dissenting shareholders of HTC.
2) The conditions under which the price adjustment plan will take effect
(1) The state-owned assets authority approves the price adjustment plan;
(2) The shareholders' meeting of Hirisun deliberated and approved the price adjustment plan;
(3) The shareholders' meeting of HTC deliberated and approved the price adjustment plan.
3)The period in which the price can be adjusted
From the announcement date of the resolution of the merger deliberated and approved in the
HTC general shareholders' meeting to the date before the China Securities Regulatory
Commission agreed to register the Transaction.
4) Trigger condition
From the announcement of the first board resolution of HTC to the time when the China
Securities Regulatory Commission agrees to register the Transaction, if any of the following two
circumstances occur, the board of directors of HTC has the right to hold a meeting within the
price adjustment period to consider whether to make an adjustment to the price of the cash
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option:
A. Shenzhen Stock Exchange Composite Index (399106. SZ) has a closing point drop of more
than 20% in at least 10 out of 20 consecutive trading days prior to any trading day compared to
the closing point of the previous trading day before the suspension of trading on the HTC's B
shares; And prior to the trading day, the daily trading average price of HTCB-shares has fallen
by more than 20% in at least 10 consecutive trading days compared to the trading average price
of HTCB-shares in the 20 trading days before the suspension of trading (i.e. the 20 trading days
before the pricing benchmark date);
Or
B. Wind Electrical Equipment Industry Index (882210.HK) WI) has a closing point drop of more
than 20% in at least 10 of the 20 consecutive trading days prior to any trading day compared to
the closing point of the trading day before the suspension of the HTC's B shares; And prior to the
trading day, the daily average trading price of HTC's B shares-shares has fallen by more than 20%
in at least 10 out of 20 consecutive trading days compared to the average trading price of HTC's
B shares in the 20 trading days before the suspension of trading (i.e. the 20 trading days before
the pricing benchmark date).
5) Adjustment mechanism and price adjustment benchmark date
The board of directors of HTC shall convene a meeting of the board of directors within 20
trading days from whichever date is later-the date to the first achievement of the trigger
conditions for price adjustment and the date on which the effective conditions of the price
adjustment plan are met, and deliberate and decide whether to adjust the price of the cash option
of the dissenting shareholders of HTC in accordance with the price adjustment plan. During the
price adjustment period, HTC will only adjust the price of the dissenting shareholder's cash
option once. If HTC has convened a meeting of board of directors to review and decide to adjust
the price of the dissenting shareholder's cash option, and the price adjustment condition is
triggered again, no further adjustment will be made; If the board of directors has convened a
meeting to deliberate and decide not to adjust the cash option price of the dissenting
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shareholders, and the price adjustment condition is triggered again, no further adjustment will be
made.
The benchmark date for price adjustment is the trading day following the date on which the
above-mentioned trigger conditions are fulfilled. The adjusted cash option price of dissenting
shareholders of HTC is the average stock trading price of the 20 trading days before the
benchmark date of the price adjustment.
(5) Exercise of the cash option
After the Transaction is registered by the China Securities Regulatory Commission, HTC will
determine the equity registration date for the implementation of the cash option. Dissenting
shareholders of HTC who exercise the cash option may obtain the cash consideration paid by the
cash option provider at the cash option price on the implementation date of each share of HTC
validly declared, and at the same time transfer the corresponding shares to the name of the cash
option provider. The provider of the cash option shall acquire all the shares of HTC exercising
the cash option by the dissenting shareholders of HTC on the implementation date of the cash
option, and pay the cash consideration accordingly. The shares of HTC acquired by the cash
option provider through the cash option will be converted into A shares issued by Hirisun for the
merger in accordance with the share exchange ratio on the implementation date of the merger
plan.
The following conditions must be met at the same time for the registered dissenting shareholders
of HTC to exercise the cash option: (1) they have cast valid negative votes on the relevant
proposals on the merger plan and the sub-proposals voted on one by one at the general
shareholders' meeting of HTC on the merger plan and on the relevant proposals on the merger
agreement signed by the two parties to the merger; (2) From the record date of the shareholders'
meeting at which HTC deliberated on the merger, as a validly registered shareholder of HTC,
continue to hold the shares representing the right of opposition until the implementation date of
the cash option; (3) Successfully perform the relevant declaration procedures within the cash
option reporting period. Shareholders who meet the above conditions are only entitled to
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exercise the cash option in respect of their share declarations for which they have cast a valid
negative vote. If the dissenting shareholders of HTC sell their shares after the registration date of
the equity registration date of the shareholders' meeting of the HTC share absorption merger
(including but not limited to being judicially compulsorily deducted, etc.), the number of shares
entitled to the cash option shall be reduced accordingly; If the dissenting shareholders of HTC
purchase shares after the registration date of the equity registration date of the shareholders'
meeting of the HTC share absorption merger, the number of shares entitled to the cash option
shall not increase, and such shares shall not enjoy the cash option.
The dissenting shareholders of HTC who hold the following shares are not entitled to exercise
the cash option in respect of the shares they hold: (1) the shares of HTC with rights restrictions,
such as shares that have been pledged or set with other third-party rights or restricted by laws
and regulations such as judicial freeze; (2) its legal holder undertakes in writing to give up the
shares of the cash option of the dissenting shareholders of HTC; and (3) other shares that are not
subject to the exercise of the cash option under applicable law. The above-mentioned shares that
are not entitled to claim the cash option will be converted into shares issued by Hirisun in
accordance with the exchange ratio on the exchange date.
Dissenting shareholders of HTC who have submitted the shares of HTC as collateral for margin
financing and securities lending transactions must transfer the shares of HTC from the credit
guarantee account of the securities company to their ordinary securities account before the
equity registration date of the cash option before they can exercise the cash option. Dissenting
shareholders of HTC who have carried out the agreed repurchase securities transaction must
complete the early repurchase procedures in a timely manner before the equity registration date
of the cash option before exercising the cash option.
The relevant taxes and fees arising from the exercise of the cash option shall be borne by the
dissenting shareholders of HTC exercising the cash option, the provider of the cash option and
other entities shall bear the responsibility in accordance with the relevant laws, regulations,
regulatory authorities and the provisions of the securities registration and clearing institutions. If
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there is no clear regulation on this by laws, regulations, regulatory authorities, and securities
registration and settlement institutions, the parties shall negotiate and resolve it in accordance
with market practices.
If the merger proposal fails to obtain permit or approval from the general shareholders' meeting
or relevant regulatory or government departments by both parties, resulting in the ultimate
inability to implement the merger, the dissenting shareholders of HTC cannot exercise the cash
option, nor can they claim any compensation or indemnification from the merging parties.
After the transaction is approved and registered by the China Securities Regulatory Commission,
HTC will separately announce the detailed arrangements for the cash option plan of HTC
dissenting shareholders (including but not limited to the declaration, settlement and delivery of
the cash option), and will disclose information in a timely manner in accordance with laws,
regulations and the provisions of the Shenzhen Stock Exchange.
11. Transitional arrangements
During the transition period, in order to achieve a smooth transition of business, if it is truly
necessary, if either party needs the cooperation of the other party in the course of business
development (including but not limited to providing relevant materials, issuing explanations,
jointly reporting to the competent authorities, etc.), the other party shall actively cooperate in
this regard.
During the Transition Period, the merging parties shall, and shall procure that each of their
subsidiaries: (1) continue to operate independently in the ordinary course of business in
accordance with past operational management and operating methods, and will not engage in
any unusual transactions or incur any unusual debts; (2) to do its best to maintain all assets that
make up the main business in good condition, and to maintain all good relationships with
government authorities, customers, employees and other relevant parties; (3) Make, sort out and
keep their respective documents and materials, and pay relevant taxes and fees in a timely
manner.
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During the transition period, either party to the merger shall take the initiative to respond to the
reasonable requests of the other party and provide the other party with relevant assets, financial
account books, meeting minutes, material claims and debts and other relevant documents in a
timely manner. If it is truly necessary, if one party needs the cooperation of the other party in the
course of business development (including but not limited to providing relevant materials,
issuing explanations, jointly carrying out declarations to the competent authorities, etc.), the
other party shall actively cooperate in this regard.
12. Arrangements for the transfer or delivery of the relevant assets involved in theTransaction
(1) Delivery conditions
After the merger agreement takes effect, the merger will be closed on the closing date. The
merging parties shall complete the delivery obligations agreed under the merger agreement on
the delivery date and sign the asset delivery confirmation document.
(2) Asset delivery
Since the date of closing, the ownership of all assets of HTC (including but not limited to all
properties, trademarks, patents, franchises, projects under construction and other assets) and the
related rights, interests, liabilities and obligations shall be enjoyed and assumed by Hirisun. HTC
agrees to assist Hirisun in handling the change procedures for the transfer of all stipulated
properties of HTC (i.e., for any property, the law provides special procedures for the creation or
transfer of such property rights or rights related to such property, including but not limited to
land, real estate, vehicles and vessels, trademarks, patents, etc.) from HTC to the name of
Hirisun. If the formal transfer procedures cannot be performed due to the change of registration
procedures and other reasons, it will not affect the rights and obligations of Hirisun to the
above-mentioned assets.
After the completion of the merger, the equity of the subsidiary currently held by HTC belongs
to the surviving company, and it is changed to a subsidiary of the surviving company. The
subsidiary of HTC (if any) belongs to the surviving company and is registered as a subsidiary of
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the surviving company.
(3) Debt inheritance
Except for the debts that are repaid in advance based on the creditor's request for early
repayment within the statutory time limit, all outstanding debts of the merger parties will be
inherited by Hirisun after the closing date of the merger.
(4) Contract succession
After the closing date of the share exchange and absorption merger, the contract subject of the
rights, obligations and rights and interests of HTC under all valid contracts/agreements signed
by HTC is changed to Hirisun.
(5) Data handover
HTC shall hand over all its bank account information, reserved seals and all seals of HTC to
Hirisun on the delivery date. HTC shall, from the date of delivery, hand over to Hirisun any and
all documents that have a significant impact on its subsequent operations.
(6) Share transfer
On the date of the share exchange, Hirisun shall register the A shares issued to the shareholders
of HTC as consideration for the merger to the shareholders of HTC. The shareholders of HTC
have become shareholders of Hirisun since the date when the new shares are registered in their
names.
13. Disposal of creditor's rights and debts involved in the Transaction
Since the date of delivery, Hirisun has inherited and undertaken all the assets, liabilities, business,
personnel, contracts, qualifications and all other rights and obligations of HTC.
Hirisun and HTC will perform the creditor notification and announcement procedures in
accordance with the provisions of relevant laws and regulations, and will, according to the
requirements of their respective creditors within the statutory time limit, in accordance with the
provisions of relevant applicable laws and regulations, independently or urge third parties to
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repay their debts in advance or provide additional guarantees for their respective creditors. If the
relevant creditors fail to claim early repayment or providing security from the merging parties
within the aforesaid statutory period, the unpaid debts will be inherited by Hirisun after the
closing date.
14. Employee placement
After the completion of the share exchange and absorption merger, the management and
employees of Hirisun will continue to retain their original jobs in accordance with the labor
contract signed with Hirisun. All registered employees of HTC will be accepted by the surviving
company and properly arranged. All rights and obligations of HTC as the employer of its
existing employees will be enjoyed and assumed by Hirisun from the closing date.
Before the relevant shareholders' meetings to consider the merger, the two parties will hold a
staff representative meeting or a staff meeting respectively to review the employee placement
plan involved in the merger.
15. Arrangement for rolling over undistributed profits
In addition to the profit distribution plan approved by the respective general shareholders'
meetings of the two parties, the accumulated undistributed profits of Hirisun and HTC as of the
implementation date of the share exchange shall be jointly enjoyed by the new and old
shareholders of the surviving company according to their shareholding ratios.
III. Completed and outstanding transaction-related procedures
(I) Obtained approval for the transaction
1. The transaction has been approved through deliberation at the fourth interim session of the sixth
board of directors of Hirisun in 2024;
2. The transaction has been approved through deliberation at the tenth session of the ninth board of
directors of HTC.
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(II) Pending approval for the transaction
Pending ratification or approval procedures for the transaction are listed as follows, including but
not limited to:
1. The formal transaction plan shall be adopted by the boards of directors of Hirisun and HTC
through deliberation;
2. The formal transaction plan shall be adopted by the boards of shareholders of Hirisun and HTC
through deliberation;
3. With consent of Hirisun's board of shareholders, Hangzhou Capital will be exempted from
increasing shares of Hirisun by means of offer;
4. The transaction shall be approved by competent authority of state-owned assets supervision and
administration;
5. The transaction shall be examined and approved by SZSE and put on file by CSRC;
6. The stock-for-stock merger shall be approved, permitted or accepted by other related competent
authorities prescribed by laws and regulations (if any).
The transaction shall not be carried out until it is ratified or approved as stated above. There is
uncertainty about whether and when the transaction is ratified or approved as stated above, thus
investors should be on the alert for investment risks.
IV. The transaction constitutes a related party transaction
In the transaction, Hirisun's dominant shareholder is Hangzhou Capital, and actual controller is
State-owned Assets Supervision and Administration Commission of Hangzhou; HTC's dominant
shareholder is Turbine Holdings, and actual controller is State-owned Assets Supervision and
Administration Commission of Hangzhou. In accordance with provisions on the related party and
related party transaction in the Listing Rules and ChiNext Listing Rules, the transaction constitutes a
related party transaction between Hirisun and HTC.
Concerning matters of the related party transaction, related directors of Hirisun and HTC have
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evaded voting.
V. The transaction constitutes material asset restructuring
According to Hirisun's and HTC's 2023 audit reports and transaction amount, the transaction
constitutes material asset restructuring, specifically calculated as follows:
In RMB 10,000
Operating
Item Total assets Net assets
revenue
Acquiree (HTC) 1,592,768.01 592,423.80 789,927.59
Transaction amount 1,123,309.17
Acquirer (Hirisun) 69,399.92 21,303.49 48,930.79
Acquiree/acquirer 2,295.06% 2,780.88% 1,614.38%
Transaction amount/acquirer 1,618.60% - 2,295.71%
Criterion for material asset restructuring in the 50% and >RMB 50% and >RMB
50%
Measures for the Administration of Restructuring 50 million 50 million
Whether to meet the criterion for material asset
Yes Yes Yes
restructuring
Note: The equity in the table refer to owners' equity attributable to parent company in the audited
consolidated statements for the latest accounting year.
In accordance with Measures for the Administration of Restructuring, the transaction
constitutes material asset restructuring.
VI. The transaction is expected to constitute restructuring and listing
Before the transaction, HTC's dominant shareholder is Turbine Holdings, and there was no
change of power of control in the latest 36 months. Upon the completion of the transaction, HTC
will be delisted and disqualified from being a corporation.
Within 36 months before the transaction, Hirisun's dominant shareholder was altered from HFI
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to Hangzhou Capital. In February 2024,HFI voluntarily transferred all 99,830,000 shares of Hirisun
held (representing 29.80% of Hirisun's total capital stock) to Hangzhou Capital. Till the signing date
of the plan, HFI no longer held shares of Hirisun, and Hangzhou Capital held 99,830,000
non-selling-restricted tradable shares of Hirisun, accounting for 29.80% of Hirisun's total capital
stock. Hirisun's dominant shareholder is thus altered from HFI to Hangzhou Capital.
According to Hirisun's and HTC's 2023 audit reports, HTC's related financial data account for
over 100% of Hirisun's, meeting the criterion for restructuring and listing prescribed in Article 13 of
the Measures for the Administration of Restructuring. Therefore, the transaction is expected to
constitute restructuring and listing.
VII. Effects of the transaction on the surviving company
(I) Effects of the transaction on main business of the surviving company
Prior to this transaction, HTC mainly designs and manufactures industrial turbines, gas
turbines and other rotating industrial turbine machinery and equipment, and provides related
supporting services, the main products include industrial steam turbines, gas turbines, etc., which
are mainly used in oil refining, chemical industry, fertilizer, building materials, metallurgy, electric
power, light industry, environmental protection and other industrial fields. Hirisun is mainly
engaged in the power information construction business, and provides related technical and
consulting services, and its power information solutions can be widely used in all links of the
power industry chain, including power generation, transmission, substation, distribution, power
consumption and dispatching.
After the implementation of the Transaction, the surviving company will inherit and
undertake all the assets, liabilities, business, personnel, contracts and all other rights and
obligations of HTC, forming a business pattern of industrial turbine machinery business as the
main business and power information business as the supplement. The surviving company will
integrate the industrial resources of both parties, further optimize the company's industrial layout,
and effectively enhance the core competitiveness and sustainable profitability of the surviving
company.
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(II) Effects of the transaction on equity structure of the surviving company
Before the transaction, HIrisun's total capital stock is 335,000,000 shares, while HTC's total
capital stock is 1,175,009,600 shares. Irrespective of subsequent ex-right or ex-dividend and other
effects on the M&A Parties, Hirisun issues a total of 1,175,009,600 shares for the stock-for-stock
merger, calculated by stock-for-stock ratio of 1:1. Irrespective of the effects of right of claim for
acquisition and cash-based option, upon the completion of the stock-for-stock merger, HTC holds
45.68% of the shares of the surviving company and is the direct controlling shareholder of the
surviving company. Hangzhou Capital directly holds 6.61% of the shares of the surviving
company, and controls a total of 52.29% of the shares of the surviving company through HTC, and
is the indirect controlling shareholder of the surviving company. Hangzhou SASAC controls a
total of 52.29% of the shares of the surviving company and is the actual controller of the surviving
company.
Before and after the transaction, Hirisun's shareholders and holding ratios are listed as follows:
In 10,000 shares
Before the stock-for-stock
After the stock-for-stock merger
merger
Shareholder
Holding Number of Holding
Number of shares
ratio shares ratio
Hangzhou State-owned Capital
9,983.00 29.80% 9,983.00 6.61%
Investment and Operation Co., Ltd.
Hangzhou Turbine Holdings Co., Ltd. - - 68,971.59 45.68%
Subtotal shares held by dominant
shareholders and persons acting in 9,983.00 29.80% 78,954.59 52.29%
concert
Other shareholders 23,517.00 70.20% 72,046.37 47.71%
Total 33,500.00 100.00% 151,000.96 100.00%
(III) Effects of the transaction on key financial indicators of the surviving company
After the implementation of the transaction, Hirisun will inherit and take on all HTC's assets,
liabilities, businesses, human resources, contracts and all the other rights and obligations. The M&A
Parties will find their business put into exhaustive integration, and the surviving company will shape
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a business pattern featuring industrial turbine business taking the center stage, complete with
electric power information business. Besides, the surviving company will remarkably expand its
scale of business and operation, with a surge of total assets and operating revenue.
Upon the completion of the work of the transaction-related audit and valuation, the M&A
Parties will, in accordance with statistics in relevant audit reports and reports for reference and
review, make quantitative analysis on key financial indicators of the surviving company before and
after the transaction, followed by detailed analysis on the effects of the transaction on the financial
status and profitability of the surviving company in the report for stock-for-stock merger.
(IV) The transaction will not make the surviving company ineligible for stock listing
Upon the completion of the transaction, the equity structure of the surviving company is as
shown in the plan's "Notification of Material Matters" - "VI. Effects of the transaction on the
surviving company" - "(II) Effects of the transaction on the equity structure of the surviving
company".
Upon the completion of the transaction, the capital stock of the surviving company will exceed
400 million shares, and the public and shareholders put together will account for no less than 10% of
the capital stock of the surviving company, thus not making the surviving company ineligible for
stock listing.
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Chapter II Acquirer’s Basic Information
I.Profile of acquirer
Chinese name Hangzhou Hirisun Technology Inc.
Stock abbreviation Hirisun
Stock code 300277.SZ
Date of establishment January 4, 2000
Listing date November 23, 2011
Listed on Shenzhen Stock Exchange
Registered capital RMB 335 million
Type of company Other Incorporated company (listed)
Unified social credit code 914403007152459096
Legal representative Gao Chunfeng
Room 206-6, Dongqing Building, No. 60, Qingchun Road, Gongshu District, Hangzhou
Domicile
City, Zhejiang Province
1. Room 206-6, Dongqing Building, No. 60, Qingchun Road, Gongshu District,
Hangzhou City, Zhejiang Province
Workplace
2. 301, Block B, R2, Gaoxin Industrial Village, No.206 South Seventh Road,
Gaoxin Sub-district, Nanshan District, Shenzhen
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General Items: Information System Integration Services; information technology
consulting services; information consulting services (excluding licensed information
consulting services); information system operation and maintenance services; software
development; software sales; network and information security software development;
technical services, technology development, technical consultation, technology
exchange, technology transfer, technology promotion; computer hardware and software
and peripheral equipment manufacturing; retail of computer hardware and software and
auxiliary equipment; wholesale of computer hardware and software and auxiliary
equipment; communication equipment manufacturing; sales of communication
equipment; sales of optical communication equipment; professional repair of
communication transmission equipment; professional repair of communication switching
equipment; power transmission and distribution and control equipment manufacturing;
sales of intelligent power transmission and distribution and control equipment; sales of
digital video surveillance systems; information security equipment manufacturing; sales
of information security equipment; security equipment sales; design and construction
services of security technology prevention system; security system monitoring services;
network equipment manufacturing; network equipment sales; sales of communication
equipment; repair of communication equipment; sales of mobile communication
Business Scope:
equipment; sales of satellite mobile communication terminals; sales of mobile terminal
equipment; sales of electronic products; sales of electronic special equipment; power
electronic components manufacturing; sales of power electronic components; retail of
electronic components; sales of photovoltaic equipment and components;
instrumentation sales; sales of charging piles; Internet of Things technology research and
development; IoT device manufacturing; sales of IoT devices; data processing services;
Internet data services; industrial Internet data services; cloud computing equipment
technical services; 5G communication technology services; industrial robot sales;
artificial intelligence application software development; artificial intelligence hardware
sales; artificial intelligence industry application system integration services; Artificial
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intelligence general application system; housing rentals; Conference and exhibition
services (except for items subject to approval in accordance with the law, independently
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II. Acquirer’s incorporation and change of capital stock
(I) Hirisun’s establishment and IPO
1. Hirisun’s establishment
Hirisun Information Network Technology (Shenzhen) Co., Ltd. was established by Jiexun
Communication Technology (Hong Kong) Co., Ltd. on January 4, 2000, with registered capital of
USD 1.5 million.State Administration for Industry and Commerce issued QDYSZZi No.306703
Business License for Corporation of the People's Republic of China to Hirisun Information Network
Technology (Shenzhen) Co., Ltd.
2. First capital increase of Hirisun
On August 28, 2000, according to the Supplementary Articles of Association of Hirisun
Information Network Technology Co., Ltd. (Shenzhen) on Increasing the Total Investment and
Registered Capital, the total investment of Hirisun increased from USD 2 million to USD 3
million, and the registered capital of Hirisun increased from USD 1.5 million to USD 2.2 million.
On October 18,2022, The state Administration for Industry and Commerce issued the Business
License to Hirisun, specifying the capital increase and altered registered capital.
3.Capital increase of Hirisun in November 2005
On November 7,2005, according to the Supplementary Articles of Association of Hirisun
Information Network Technology Co., Ltd. (Shenzhen) on Increasing the Total Investment and
Registered Capital, the total investment of Hirisun increased from USD 3 million to USD 3.3
million, and the registered capital of Hirisun increased from USD 2.2 million to USD 2.5 million.
On February 8, 2006, the Shenzhen Municipal Administration for Industry and Commerce
issued the Business License for Corporation to Hirisun (predecessor), specifying altered registered
capital.
4. Change of type of company of Hirisun
On April 2, 2008, Shenzhen Municipal Administration for Industry and Commerce examined
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and approved an increase of registered capital of Hirisun (predecessor) from USD 2.5 million to
RMB 20 million, and change in type of company from foreign-funded enterprise to
domestic-funded enterprise, and change in name of company from "Hirisun Information Network
Technology (Shenzhen) Co., Ltd." to " Shenzhen Hirisun Technology Co., Ltd.".Later on the day,
Shenzhen Municipal Administration for Industry and Commerce issued Business License for
Corporation to Hirisun (predecessor), specifying altered type of company and other contents
approved.
5. Capital increase of Hirisun in April 2008
On April 19, 2008, according to the Capital Increase Agreement of Shenzhen Hirisun
Technology Co., Ltd. signed by Yang Deguang and Hirisun, the registered capital of Hirisun was
changed from RMB 20 million to RMB 21.6 million.
On May 5, 2008, Shenzhen Municipal Administration for Industry and Commerce issued the
Business License for Corporation No.: 440301503239472 to Hirisun (predecessor), specifying the
capital increase and altered registered capital.
6.In May 2008, Hirisun changed as a whole
On May 18, 2008, all initiators signed the Agreement of Initiators on Restructuring Shenzhen
Hirisun Technology Co., Ltd. Into Shenzhen Hirisun Technology Inc., in approval of the company
restructured into an incorporated company by converting net assets on the book into shares.
Hirisun's registered capital was RMB 36.7 million when it was founded.
On May 30,2008, the Shenzhen Municipal Administration for Market Regulation issued the
changed Business License of Enterprise Legal Person to Hirisun, with registration number:
440301503239472.
7. Capital increase of Hirisun in July 2008
On July 22, 2008, Shenzhen SMEs Credit Guarantee Center Co., Ltd. and Shenzhen Hirisun
Technology Inc. signed Agreement on Increase of Capital and Shareholders, Upon the capital
increase, Hirisun saw an increase of its registered capital from RMB 36.7 million to RMB 37.9
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million.
On August 5, 2008, Shenzhen Municipal Administration for Industry and Commerce issued
the Business License for Corporation No.: 440301503239472 to Hirisun, specifying the increase of
shareholders and capital and altered registered capital.
8. Capital increase of Hirisun in June 2010
On June 29, 2010, Hirisun convened the second interim shareholders' meeting in 2010,
approving that Hirisun proportionally transferred RMB 12,100,000.00 of its capital reserves in the
amount of RMB 27,879,469.87 up to December 31, 2009 by RMB 1/share to shareholders of record
of December 31, 2009 for capital increase. Upon the capital increase, capital stock totaled RMB
50,000,000.00.Upon the capital increase, Hirisun saw an increase of its registered capital from RMB
37.9 million to RMB 50 million.
On December 7, 2010, the Shenzhen Municipal Administration for Market Regulation issued
the changed Business License of Enterprise Legal Person to Hirisun, with registration number:
440301503239472.
9. IPO and listing in 2011
On November 3, 2011, as approved by China Securities Regulatory Commission in the “ZJXK
[2011] Document No.1736” Consent to IPO and ChiNext Listing of Shenzhen Hirisun Technology
Inc., 17 million common shares in RMB (par value per share: RMB 1) were issued to the public,
for adding RMB 17 million to the registered capital. The registered capital was then altered to
RMB 67 million.
On November 23, 2011, as specified by Shenzhen Stock Exchange in the “SZS [2011] Document
No. 352” Notice on ChiNext Listing of Shenzhen Hirisun Technology Inc. with Ordinary Shares in
RMB, Hirisun went public on SZSE ChiNext with ordinary shares in RMB.
(II) Hirisun's change of capital stock upon its IPO
1. Capital reserves transferred for increase of capital stock in 2012
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In June 2012, Hirisun, according to resolutions of the Board and General Meeting of Stockholders,
carried out the 2011 equity distribution plan, whereby capital reserves were transferred for
increase of 10 shares per 10 shares distributed to all shareholders, on the basis of 67 million shares
in total. Increased shares through transfer totaled 67 million. Upon the increase through transfer,
the company's total capital stock rose to 134,000,000 shares;
2. Capital reserves transferred for increase of capital stock in 2016
On April 21, 2016, Hirisun convened the 2015 general meeting of shareholders. According go the
resolution of the meeting, the company, on the basis of 134,000,000 shares in total, increased 15
shares per 10 shares through transfer to all shareholders. The increase shares through transfer
totaled 201,000,000. Upon the increase through transfer, the company's total capital stock rose to
335,000,000 shares;
And thereafter till the signing date of the plan, there was no change incurred to Hirisun’s total
capital stock.
Up to the signing date of the plan, Hirisun’s capital stock totaled 335,000,000 shares, and the top
ten shareholders held shares as follows:
In 10,000 shares
Number of
No Shareholder Holding ratio (%)
shares
Hangzhou State-owned Capital Investment and Operation Co.,
1 9,983.00 29.80
Ltd.
Zhuhai Abama Assets Management Co., Ltd.－Abama
2 1,197.45 3.57
Dividend No.39 PE Fund
3 Zhang Feng 1,185.02 3.54
4 Kon g Biao 1,057.39 3.16
5 Su Hongyu 713.40 2.13
6 Xing Wenbiao 636.81 1.90
7 Wang Lugui 519.03 1.55
8 Shenzhen Pangu Tiandi Industrial Investment Co., Ltd. 500.58 1.49
9 Li Ping 172.29 0.51
10 Chen Xiaorong 163.67 0.49
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Number of
No Shareholder Holding ratio (%)
shares
Total 16,128.64 48.15
III. Acquirer’s equity control
(I). Acquirer’s equity control
Till the signing date of the plan, Hirisun’s dominant shareholder was Hangzhou Capital, and actual
controller was State-owned Assets Supervision and Administration Commission of Hangzhou.
Till the signing date of the plan, Hirisun’s equity control relation schema is shown as follows:
(II) Controlling shareholder
Hirisun’s Controlling shareholder is Hangzhou Capital, whose basic information is briefed as
follows:
Name of company Hangzhou State-owned Capital Investment and Operation Co., Ltd.
Domicile Room 201, No.19 Liuying Alley, Zhejiang
10/F, State-owned Capital Investment Building, No.68 Qingchun East Road, Kaixuan
Workplace
Sub-district, Shangcheng District, Hangzhou, Zhejiang
Legal representative Sun Gangfeng
Type of company Limited liability company (solely state-owned)
Registered capital RMB 10,000 million
Unified social credit code 91330100MA2CFRGP3C
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Date of establishment November 28, 2018
Operation of state-owned assets within scope of authority of the municipal
government, assets under mandated operation by the municipal government and
related authorities, investment and investment management and consulting services,
asset management and disposal, equity management and PE fund management
(without approval of financial and other regulators, engagement in public financing
and depositing, financing assurance, financial management and other financial
services will be disallowed); wholesale and retail: coal (storage-free), nonferrous
metals, steel materials and products, timber, coke, pulp, chemical products and
materials, asphalt (except for hazardous chemicals and precursor chemicals), gold
products, plastic materials and products, ordinary machinery, building materials,
Business scope cement, rubber products, primary edible agricultural products (except for medicines),
cotton, fodder, fuel oil, petroleum products (except for refined oil, hazardous
chemicals and precursor chemicals), glass products, paper products, hardware and
electrical equipment, mechanical equipment, water heating devices, auto parts,
instruments and apparatuses, computer software and hardware and parts, electronics,
needles, textiles; food operation; import and export of cargo and technology (except
for programs of business banned by laws and administrative regulations, programs of
business restrained by laws and administrative regulations shall be carried out with
permission); all the other legitimate programs required of no approval.
(For programs required of approval by law, relevant operating activities shall not be
carried out unless with consent of related authorities)
(III) Actual controller
Hirisun’s dominant shareholder is Hangzhou Capital, and State-owned Assets Supervision and
Administration Commission of Hangzhou, with 100% equity of Hangzhou Capital, is actual
controller of Hirisun.
(IV) Change of power of control in the latest thirty-six months
Hirisun’s former dominant shareholder is Hangzhou Financial Investment (HFI) and actual
controller is State-owned Assets Supervision and Administration Commission of Hangzhou. In
February 2024,HFI voluntarily transferred all 99,830,000 shares of Hirisun held (representing
29.80% of Hirisun’s total capital stock) to Hangzhou Capital. Till the signing date of the plan, HFI
no longer held shares of Hirisun, and Hangzhou Capital held 99,830,000 non-selling-restricted
tradable shares of Hirisun, accounting for 29.80% of Hirisun’s total capital stock. Hirisun’s
dominant shareholder is thus altered from HFI to Hangzhou Capital.
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IV. Acquirer’s material asset restructuring in the latest three years
Up to the signing date of the plan, Hirisun had no material asset restructuring in the latest three
years.
V. Acquirer’s main business development
Hirisun is a national hi-tech enterprise, specializing in electric power information system
integration. Targeting electric power enterprises, it, by delivering integrated solutions, practices in
information development of electric power enterprises and provides relevant technology and
consulting services. The electric power information solutions extensively work in power
generation, power transmission, power transformation, power distribution, power consumption
and dispatching in the electric power industry chain.
Hirisun is mainly engaged in system integration, software development and marketing, technology
and consulting services. For system integration, Hirisun, by leverage of communication
technology, network technology, computer software technology, security, host and storage
technology, keeps furnishing customers with the best solutions, depending on customers’ actual
businesses. Tapping advanced technology and capacity of management implementation, it brings
solutions acknowledged by customers into a reality. In other words, it turns software and hardware
portfolios into practical and cost-effective complete systems, making customers’ information
resources fully shared and achieving centralized, efficient, and convenient management. In the
latest three years, there were no major changes to Hirisun’s main business.
VI. Acquirer’s financial data
(I) Consolidated balance sheet
In RMB 10,000
September December
Item December 31,2023 December 31, 2022
30,2024 31,2021
Total assets 68,719.23 69,399.92 67,485.28 71,241.42
Total liabilities 18,271.69 18,421.50 16,961.29 20,835.24
Owners ‘equity 50,447.54 50,978.42 50,523.98 50,406.18
Owners’ equity
attributable to parent 48,712.70 48,930.79 48.519.86 48,499.08
company
Note: Financial data for 2021, 2022 and 2023 have been audited, Financial data for
January-September 2024 are unaudited (the same below).
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(II) Consolidated income statement
In RMB 10,000
Item January-September 2024 2023 2022 2021
Operating revenue 13,089.77 21,303.49 24,177.89 23,430.35
Total profits 795.18 2,015.22 2,108.80 2,434.12
Net profits 678.12 1,761.44 1,780.49 2,228.85
Net profits attributable to
451.91 1,080.93 1,028.84 1,428.15
parent company
(III) Consolidated cash flow statement
In RMB 10,000
Item January-September 2024 2023 2022 2021
Net amount of cash flow
2,031.65 3,513.25 -1,863.55 627.84
from operating activities
Net amount of cash flow
-1,865.29 -151.97 3,166.90 2,693.74
from investment activities
Net amount of cash flow
-1,850.89 -1,237.55 -1,775.59 -2,927.73
from fund-raising activities
Net increase in cash and
-1,684.54 2,123.72 -472.23 393.85
cash equivalents
(IV) Key financial indicators
December 31, December 31, December 31,
September 30, 2024/
Key financial indicators 2023/ 2022/ 2021/
January-September 2024
2023 2022 2021
Asset-liability ratio
26.59% 26.54% 25.13% 29.25%
(consolidated)
Weighted average return on
0.92% 2.22% 2.13% 2.95%
equity
Note: Weighted average return on equity for January-September 2024 is not annualized
VII. Acquirer’s compliance with laws and regulations and integrity
Up to the signing date of the plan, Hirisun and incumbent directors, supervisors and senior
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executives thereof were not investigated and put on file by judiciary on suspicion of crime or
inquired and put on file by the CSRC on suspicion of breach against laws or regulations. In the
latest five years, Hirisun and incumbent directors, supervisors and senior executives thereof were
put under no administrative penalty (except for those apparently irrelevant with the securities
market) or criminal penalty; they involved no major civil lawsuit or arbitration in connection with
any economic disputes; in the latest five years, they encountered no administrative regulation
measures of the CSRC or disciplinary sanctions of the stock exchange for failing to repay large
debt or to honor promises; in the latest twelve months, they were not denounced in public by the
stock exchange or committed other dishonest acts, nor did they have other records of bad conduct.
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Chapter III Acquiree’s Basic Information
I.Profile of acquiree
Chinese name 杭州汽轮动力集团股份有限公司
Stock abbreviation Hangqilun B
Stock code 200771.SZ
Date of establishment April 23, 1998
Listing date April 28, 1998
Listed on Shenzhen Stock Exchange
Registered capital RMB 117,500,959,700
Type of company Incorporated company (Hong Kong, Macao or Taiwan-funded, listed)
Unified Social Credit Code: 913300007042026204
Legal representative: Ye Zhong
Domicile Building 1, No. 608, Kangxin Road, Linping District, Hangzhou City, Zhejiang Province
Workplace No.1188, Dongxin Road, Gongshu District, Hangzhou, Zhejiang
Design, manufacture, sales, after-sales service and related product technology
development, trade, transfer and consulting services for turbines, gas turbines and other
rotating and reciprocating machinery and equipment and auxiliary equipment, spare
Business scope: parts. Wholesale, import and export and after-sales service of complete sets of
engineering equipment in the fields of power generation, industrial drive and industrial
turbine, general contracting of energy conservation and environmental protection
projects.
II. Acquiree’s incorporation and change of capital stock
(I) HTC’s establishment and IPO
1. Founded and listed in 1998
Solely initiated by Turbine Holdings, HTC is an incorporated company established with funds
raised from issuing listed foreign shares (B-shares) at home and abroad, with ZWF [2008]
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Document No.8 issued by the Securities Commission of the State Council. Incorporated on April
23, 998, the company was listed for trading on Shenzhen Stock Exchange on April 28, 1998. On
December 2, 1998, the company was approved by China’s Ministry of Foreign Trade and
Economic Cooperation as foreign-invested incorporated company, or precisely a Sino-foreign joint
venture established with funds raised from issuing listed foreign shares (B-shares) at home and
abroad. And the Administration for Market Regulation of Zhejiang Province, under mandate of the
State Administration for Industry and Commerce of the People's Republic of China, handled
registration for the company.
(II) HTC's change of capital stock upon its IPO
1. First capital increase in December 2006
On June 8, 2006, HTC convened the 2005 general meeting of shareholders, adopting the 2005
Profit Distribution Plan through deliberation. As agreed upon in the plan, capital reserves were
transferred for increase of capital stock, with 3 shares increased per 10 shares to all shareholders.
Upon the increase through transfer, the company’s total capital stock was altered to 286,000,000
shares. Later on December 20, the Ministry of Commerce of the People’s Republic of China
issued the SZP [2006] Document No.2392 Consent of the Ministry of Commerce to Capital
Increase of Hangzhou Turbine Co., Ltd., for approval of HTC’s increase of registered capital
through transfer of capital reserves. The company’s registered capital was then increased to
286,000,000 shares. On December 31, 2006, HTC handled industrial and commercial changed
registration regarding the matters of capital increase.
2. Second capital increase in December 2007
On June 15, 2007, HTC convened the 2006 general meeting of shareholders, adopting the 2006
Profit Distribution Plan through deliberation. As agreed upon in the plan, 3 bonus shares
(tax-inclusive) per 10 shares were distributed through transfer of undistributed profits to all
shareholders for increase of capital stock. On September 4, 2007, the Ministry of Commerce of the
People’s Republic of China issued the SZP [2007] Document No.1525 Consent of the Ministry of
Commerce to Capital Increase of Hangzhou Turbine Co., Ltd., for approval of HTC’s increase of
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registered capital through transfer of undistributed profits. with total capital stock up to
371,800,000 shares. On December 29, 2007, HTC handled industrial and commercial changed
registration regarding the matters of capital increase.
3. Third capital increase in November 2010
On June 2, 2010, HTC convened the 2009 general meeting of shareholders, adopting the 2009
Profit Distribution Plan through deliberation. As agreed upon in the plan, the company, based on
its present total capital stock of 371,800,000 shares, distributed 3 bonus shares (tax-inclusive) per
10 shares through transfer of undistributed profits, hence increasing total capital stock to
483,340,000 shares. On August 10, 2010, Hangzhou Bureau of Foreign Trade and Economic
Cooperation issued HWJMWFX [2010] Document No.230 Decision of Administrative License for
Approval of Alteration of Hangzhou Turbine Co., Ltd. As agreed upon in the decision, the
company, on the basis of total capital stock of 371,800,000 shares by the end of 2009, distributed 3
bonus shares (tax-inclusive) per 10 shares, with total capital stock up to 483,340 ,000 shares. On
November 10, 2010, HTC handled industrial and commercial changed registration regarding the
matters of capital increase.
4. Fourth capital increase in December 2011
On May 11, 2011, HTC convened the 2010 general meeting of shareholders, adopting the 2010
Profit Distribution Plan through deliberation. As agreed upon in the plan, the company, based on
its present total capital stock of 483,340,000 shares, distributed 3 bonus shares (tax-inclusive) per
10 shares through transfer of undistributed profits, hence increasing total capital stock to
628,342,000 shares. On September 7, 2011, Hangzhou Bureau of Foreign Trade and Economic
Cooperation issued HWJMWFX [2011] Document No.183 Decision of Administrative License for
Approval of Alteration of Hangzhou Turbine Co., Ltd. As agreed upon in the decision, the
company, on the basis of total capital stock of 483,340,000 shares by the end of 2010, distributed 3
bonus shares (tax-inclusive) per 10 shares, with total capital stock up to 628,342,000 shares. On
December 26, 2011, HTC handled industrial and commercial changed registration regarding the
matters of capital increase.
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5. Fifth capital increase in October 2012
On May 18, 2012, HTC convened the 2011 general meeting of shareholders, adopting the 2011
Profit Distribution Plan through deliberation. As agreed upon in the plan, the company, based on
its present total capital stock of 628,342,000 shares, distributed 2 bonus shares (tax-inclusive) per
10 shares through transfer of undistributed profits, hence increasing total capital stock to
754,010,400 shares. On July 20, 2012, Hangzhou Bureau of Foreign Trade and Economic
Cooperation issued HWJMWFX [2012] Document No.83 Decision of Administrative License for
Approval of Alteration of Hangzhou Turbine Co., Ltd. As agreed upon in the decision, the
company, on the basis of total capital stock of 628,342,000 shares by the end of 2011, distributed 2
bonus shares (tax-inclusive) per 10 shares, with total capital stock up to 754,010,400 shares. On
October 23, 2012, HTC handled industrial and commercial changed registration regarding the
matters of capital increase.
6. Sixth capital increase in September 2022
On April 27, 2022, HTC convened the 2021 general meeting of shareholders, adopting the 2021
Profit Distribution Plan through deliberation. As agreed upon in the plan, the company, on the
basis of total capital stock of 754,010,400 shares, minus 111,800 treasury shares bought back on
the date of record of equity distribution, distributed 3 bonus shares (tax-inclusive) per 10 shares
through transfer of undistributed profits, thus increasing total capital stock to 980,179,980 shares.
On September 5, 2022, HTC handled industrial and commercial changed registration regarding the
matters of capital increase.
7. First and second share buyback and cancellation in July 2023
On March 27, 2023, the first partial restricted stock repurchase cancellation of HTC was
completed. On December 21, 2022, the board of directors of HTC held a board meeting and
deliberated and passed the "Proposal on Repurchasing and Canceling Part of the Restricted
Shares".The buyback and cancellation of restricted shares involved 10 targets of incentive in total,
and restricted shares bought back and canceled totaled 531,180 shares, representing 0.054% of the
company’s total capital stock before buyback and cancellation. The buyback amounted to RMB
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2,197,649. Upon the buyback and cancellation, the company’s total capital stock decreased from
980,179,980 shares to 979,648,800 shares. As ascertained and acknowledged by the Shenzhen
Branch, China Securities Depository and Clearing Corporation Limited (CSDC), the company
completed the transaction of relevant matters on March 27, 2023.
On June 21, 2023, the cancellation of the remaining shares of the special securities account
for the second repurchase of HTC was completed. On March 27, 2023, the board of directors of
HTC held a meeting, in which it deliberated and passed the "Proposal on Canceling the Remaining
Shares in the Special Securities Account for Repurchase", and agreed that the company would
cancel the remaining 111,800 shares in the special securities account for repurchase and reduce the
registered capital. After the completion of the aforesaidshare cancellation, the total share capital of
the company was reduced to 1,175,444,400 shares. Confirmed by China Securities Depository and
Clearing Co., Ltd. Shenzhen Branch, the cancellation of the repurchased shares had been
completed on June 21, 2023.
On July 13, 2023, HTC completed the registration of industrial and commercial changes for
the two repurchases and cancellations mentioned above.
8. Seventh capital increase in September 2023
On April 19, 2023, HTC convened the 2022 general meeting of shareholders, adopting the 2022
Profit Distribution Plan through deliberation. As agreed upon in the plan, the company, on the
basis of total capital stock of 980,179,980 shares by the end of 2022, minus 111,800 treasury
shares bought back on the date of record of equity distribution and 531,180 shares canceled due to
retirement or dismissal of targets of incentive by December 2022, i.e., 979,537,000 shares,
distributed cash dividend of RMB 3 and 2 bonus shares per 10 shares to all shareholders,
involving no increase of capital stock through transfer of capital reserves. Upon the bonus
distribution, the total capital stock was increased to 1,175,556,200 shares. Due to the completion
of the second repurchase and cancellation of 111,800 shares by the company on June 21, 2023, the
total share capital of the company has been changed to 1,175,444,400 shares after deducting the
above-mentioned cancelled shares. On September 12, 2023, HTC handled industrial and
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commercial changed registration regarding the matters of capital increase.
9. Third share buyback and cancellation in January 2024
On January 2, 2024, HTC completed buyback and cancellation of restricted shares in part.
The buyback and cancellation of restricted shares involved 19 targets of incentive in total, and
restricted shares bought back and canceled totaled 434,803 shares, representing 0.037% of the
company’s total capital stock before buyback and cancellation. The buyback amounted to RMB
1,394,403. Upon the buyback and cancellation, the company’s total capital stock decreased from
1,175,444,400 shares to 1,175,009,597 shares. As ascertained and acknowledged by the Shenzhen
Branch, China Securities Depository and Clearing Corporation Limited (CSDC), the company
completed the transaction of relevant matters on January 2, 2024. On January 2, 2024, HTC
completed the registration of industrial and commercial changes for the repurchases and
cancellations mentioned above.
And thereafter till the signing date of the plan, there was no change incurred to HTC’s total capital
stock.
Up to September 30, 2024, HTC’s capital stock totaled 1,175,009,600 shares, and the top ten
shareholders held shares as follows:
In 10,000 shares
No. Shareholder Number of shares Holding ratio
1 Hangzhou Turbine Holdings Co., Ltd. 68,971.59 58.70
2 Hangzhou Qitong Equity Investment Partnership (LP) 5,881.08 5.01
3 China Merchants Securities (Hong Kong) Co., Ltd. 920.23 0.78
4 Zhou Jie 842.25 0.72
5 Guotai Junan Securities (Hong Kong) Limited 834.64 0.71
6 iShares Core MSCI Emerging Markets ETF 668.53 0.57
VANGUARD TOTAL INTERNATIONAL STOCK
7 620.90 0.53
INDEX FUND
SCBHK A/C BBH S/A VANGUARD EMERGING
8 523.27 0.45
MARKETS STOCK INDEX FUND
9 Norges Bank 392.27 0.33
10 Xia Zulin 381.00 0.32
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No. Shareholder Number of shares Holding ratio
Total 80,035.77 68.11
III. Acquiree’s equity control
(I) Acquiree’s equity control relation
Till the signing date of the plan, HTC’s dominant shareholder was Turbine Co., Ltd., and actual
controller was State-owned Assets Supervision and Administration Commission of Hangzhou.
Turbine Holdings held 58.70% of equity of HTC, and Hangzhou Capital held 90% of equity of
Turbine Holdings.
Till the signing date of the plan, HTC’s equity control relation schema is shown as follows:
(II) Dominant shareholder
HTC’s dominant shareholder is Turbine Holdings, whose basic information is briefed as follows:
Name of company Hangzhou Turbine Holdings Co., Ltd.
Domicile No.357 Shiqiao Road, Gongshu District, Hangzhou, Zhejiang
Workplace Room 1001, 1-68 Qingchun East Road, Shangcheng District, Hangzhou, Zhejiang
Legal representative Hua Wei
Type of company Limited liability company (solely state-owned)
Registered capital RMB 800 million
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Unified social credit code 91330100143071842L
Date of establishment December 14, 1992
Manufacture and machining: textile machinery, papermaking machinery, pumps,
castings, electric tools, variable gears, heat exchangers, digital control and display
devices, and spare parts of such devices (confined to operations by affiliates);
contracting of foreign mechanical engineering projects and national/international
bidding projects, and export of devices and materials needed for the projects, export
of materials, and labor dispatching for implementation of the projects overseas;
Business scope thermal engineering project contracting and complete equipment; wholesale and
retail: products and spare parts made by member companies of the Group, and
product-related technology development, consulting and services; procurement of raw
and auxiliary materials, devices and spare parts for production needed by member
companies of the Group, provision of water, electricity and gas and relevant services
for affiliates of the Group (except for installation, repair and commissioning of
electric power facilities); including business scope of affiliates.
(III) Actual controller
Hangzhou Capital holds 90% of equity of Turbine Holdings, and State-owned Assets Supervision
and Administration Commission of Hangzhou holds 100% of equity of Hangzhou Capital, making
it actual controller of HTC.
(IV) Change of power of control in the latest thirty-six months
Till the signing date of the plan, Actual controller was State-owned Assets Supervision and
Administration Commission of Hangzhou in the latest thirty-six months. The actual controller is
the Hangzhou State-owned Assets Supervision and Administration Commission, which has not
changed.
HTC’s dominant shareholder was Turbine Holdings, and actual controller was State-owned Assets
Supervision and Administration Commission of Hangzhou in the latest thirty-six months.
IV. Acquiree’s material asset restructuring in the latest three years
Up to the signing date of the plan, HTC had no material asset restructuring in the latest three
years.
V. Acquiree’s main business development
HTC is a leading industrial turbine equipment and service provider in China, specializing in
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design and manufacture of industrial turbines, gas turbines and other rotary industrial turbines.
HTC’s staples include industrial turbines and gas turbines. Industrial turbines fall into
industrial drive turbines and industrial power generation turbines. The former, intended for driving
compressors, fans, pumps, squeezers and other rotary machines, is a key power equipment in all
manner of large industrial plant and applies to oil refining, chemical, fertilizer, building materials,
metallurgy, power, light industry, environmental protection and other industrial fields; the latter,
engineered to drive power generators and supply thermal energy, mainly works in companies’ own
power stations, regional combined heat and power generation projects, waste heat recovery for
power generation in the industrial process, urban waste power plants, and combined cycle power
plants in all industrial sectors. Cooperate with well-known foreign companies on the advanced
SGT-800 model natural gas turbine that is efficient, reliable, and low emission.high reliability and
low emissions, has made a foray into natural gas distributed energy sector, with SGT-300,
SGT-700, SGT5-2000E models launched progressively.
In the latest three years, there were no major changes to HTC’s main business.
VI. Acquiree’s financial data
(I) Consolidated balance sheet
In RMB 10,000
September 30, December 31, December 31, December 31,
Item
2024 2023 2022 2021
Total assets 1,627,169.90 1,592,768.01 1,537,499.96 1,631,966.76
Total liabilities 752,028.14 738,756.32 647,580.69 799,011.71
Owners’ equity 875,141.76 854,011.69 889,919.27 832,955.05
Owners’ equity
attributable to parent 820,921.18 789,927.59 832,848.11 792,748.58
company
Note: Financial data for 2021, 2022 and 2023 have been audited, but financial data for
January-September 2024 are not audited (similarly hereinafter)
(II) Consolidated income statement
In RMB10,000
January-September
Item 2023 2022 2021
2024
Operating revenue 261,166.38 592,423.80 551,884.19 578,828.86
Total profits 18,821.35 73,551.80 70,793.16 83,254.75
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Net profits 18,093.97 66,621.93 62,523.94 72,724.78
Net profits attributable
19,149.96 51,768.05 52,239.68 64,999.25
to parent company
(II) Consolidated income statement
In RMB10,000
January-September
Item 2023 2022 2021
2024
Net amount of cash flow
-33,358.56 87,720.95 32,414.08 7,180.95
from operating activities
Net amount of cash flow
from investment 14,339.50 19,252.00 41,241.07 -19,303.29
activities
Net amount of cash flow
from fund-raising -70,497.27 -21,972.48 -42,813.80 -25,856.39
activities
Net increase in cash and
-89,596.68 85,658.82 33,748.94 -38,281.57
cash equivalents
(IV) Key financial indicators
September 30, 2024/ December 31, December 31, December 31,
Key financial
January-September 2023/ 2022/ 2021/
indicators
2024 2023 2022 2021
Asset-liability ratio
47.36% 46.38% 42.12% 48.96%
(Consolidated)
Weighted average return
2.29% 6.38% 6.47% 8.01%
on equity
Note: Weighted average return on equity for January-September 2024 is not annualized
VII. Acquiree’s compliance with laws and regulations and integrity
Up to the signing date of the plan, HTC and incumbent directors, supervisors and senior
executives thereof were not investigated and put on file by judiciary on suspicion of crime or
inquired and put on file by the CSRC on suspicion of breach against laws or regulations.
Additionally, in the latest five years, HTC and incumbent directors, supervisors and senior
executives thereof were not put under any other administrative penalty (except for those
apparently irrelevant with the securities market) or criminal penalty; they involved no major civil
lawsuit or arbitration in connection with any economic disputes; in the latest five years, they
encountered no administrative regulation measures of the CSRC or disciplinary sanctions of the
stock exchange for failing to repay large debt or to honor promises; in the latest twelve months,
they were not denounced in public by the stock exchange or committed other dishonest acts, nor
did they have other records of bad conduct.
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VIII. Acquiree’s affiliates
As of September 30,2024, HTC’s holding subsidiaries within scope of consolidated statements are
listed as follows:
In RMB 10,000
Registered Holding ratio
No. Name of subsidiary
capital Direct Indirect
1 Hangzhou Turbine Auxiliary Machinery Co., Ltd. 8,000 87.53%
Hangzhou Guoneng Turbine Engineering Co.,
2 4,000 100%
Ltd. (HGT)
Zhejiang Turbine Packaged Technology
3 5,100 75.86%
Development Co., Ltd.
Hangzhou Turbine Machinery Equipment Co.,
4 3,000 100%
Ltd.
Zhejiang Huayuan Steam Turbine Machinery Co.,
5 2,100 100%
Ltd
6 Zhejiang Turbine Import & Export Co., Ltd. 2,000 100%
杭 Hangzhou Zhongneng Turbine Machinery
7 12,000 46.89%
Equipment Co., Ltd.
Hangzhou Hangfa Power Generation Equipment
8 8,000 100%
Co., Ltd.
9 Hangzhou Steam Turbine Casting Co., Ltd. 2,950 38.03%
10 Anhui Hangqi Casting Technology Co., Ltd. 13,000 51.54%
11 Hangzhou Turbine New Energy Co., Ltd. 50,000 100%
12 Zhejiang Ranchuang Turbine Machinery Co., Ltd. 15,500 100%
Pengzhou Western Power Blue Technology Co.,
13 14,300 56.64%
Ltd.
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Chapter IV Particulars of Transaction Agreement
On November 8, 2024, Hirisun and HTC signed the Agreement on Stock-for-stock Merger,
outlined as follows:
Acquirer: Hirisun, Party A
Acquiree: HTC, Party B
Signed date: November 8, 2024
I. Arrangement on the merger
(I) Pattern of merger
In the stock-for-stock merger, the acquirer is Hirisun and acquiree is HTC.
The M&A Parties agree to carry out the merger through stock-for-stock merger, i.e., Party A issues
A-shares to all shareholders of Party B, which is taken as consideration for stock-for-stock merger
of Party B. By then, shares held by all shareholders of Party B will be proportionally converted into
Party A's A-shares.
Party A, as the acquirer and surviving company in the merger, will inherit and take on all Party
B's assets, liabilities, businesses, human resources, and all the other rights and obligations; Party B,
as the acquiree in the merger, will be delisted and disqualified from being a corporation.
Upon the completion of the stock-for-stock merger, all shares issued by Party B (including
Party B's relevant shares transferred to the provider of cash-based option) will be converted into
A-shares issued by Party A for stock-for-stock merger as agreed upon.
After the delivery date, Party A will go through the industrial and commercial change
registration procedures related to the company name and registered capital. After the merger, the
surviving company will adopt a new company name, and a series of measures will be taken to
establish a new corporate governance structure, management structure, development strategy and
corporate culture in accordance with the applicable laws and regulations at that time and the main
business of the surviving company after the merger.
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(II) Type and face value of shares issued for stock-for-stock merger
For the stock-for-stock merger, Hirisun issues China-listed RMB ordinary shares (A-shares), in
the face value of RMB 1.00 per share.
(III) Stock-for-stock target and date of record of stock-for-stock merger
For the stock-for-stock merger, shares are issued to all HTC shareholders registered after stock
market closes on the date of record of stock-for-stock merger, namely, HTC shareholders that make
no request, request in part, are ineligible or invalid in request for exercising the cash-based option on
the date of record of stock-for-stock merger, and the provider of cash-based option (if the party has
paid cash consideration to the shareholders exercising the cash-based option and been transferred
HTC shares). HTC shares held by targets of stock-for-stock merger will be proportionally converted
into A-shares issued by Hirisun for the stock-for-stock merger in whole.
After the transaction is approved by the SZSE and accepted and put on file by the CSRC, the
boards of the M&A Parties will otherwise determine and announce the date of record of
stock-for-stock merger through negotiation.
(IV) Arrangement on accumulated undistributed profits
Except for profit distribution plans adopted by the M&A Parties at relevant general
shareholders' meetings, Hirisun's and HTC's accumulated undistributed profits up to the date of
exercising the stock-for-stock merger will be proportionally shared by new and old shareholders of
the surviving company.
II. Stock-for-stock
(I) Price and ratio of stock-for-stock
Before the notice date of Party A's first board resolution on the transaction-related matters
through deliberation, the stock price averaged RMB 9.56/share within 20 trading days. In view of
historical stock price, business performance, market value and scale among other factors, Party A's
stock-for-stock price is finally determined at RMB 9.56/share through fair negotiation between
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Party A and Party B in accordance with the Measures for the Administration of Restructuring.
From the base date of pricing till the date of exercising the stock-for-stock merger (both dates
included), Party A's stock-for-stock price will be adjusted subject to Party A's distribution of cash
dividends, stock dividends, transfer of capital reserves for increase of capital stock, allotment of
shares and other ex-right and ex-dividend matters, if any.
Before the notice date of Party B's first board resolution on the stock-for-stock merger through
deliberation, the stock price averaged HKD 7.77/share within 20 trading days. Converted by the
middle rate between RMB and HKD (HKD 1=RMB 0.91496) disclosed by the People's Bank of
China on the trading day prior to Party B's stock delisting, i.e., October 25, 2024, the stock price is
RMB 7.11/share. On that basis, in light of historical stock price, business performance, market value
and scale and other factors, 34.46% premium is defined by Party A and Party B through fair
negotiation as per Measures for the Administration of Restructuring. In the end, Party B's
stock-for-stock price is HTC's average transaction price of RMB 7.11/share * (1+premium
rate)=RMB 9.56/share.
From the base date of pricing till the date of exercising the stock-for-stock merger (both dates
included), Party B's stock-for-stock price will be adjusted subject to Party B's distribution of cash
dividends, stock dividends, transfer of capital reserves for increase of capital stock, allotment of
shares and other ex-right and ex-dividend matters, if any.
As priced for the stock-for-stock merger, the number of Hirisun shares per HTC share in
exchange=HTC's stock-for-stock price/Hirisun's stock-for-stock price, Under the formula, the
stock-for-stock ratio of HTC and Hirisun is 1:1, i.e., 1 HTC share is in exchange for 1 Hirisun
shares.
From the base date of pricing till the date of exercising the stock-for-stock merger (both dates
included), the stock-for-stock ratio will not be adjusted under any circumstances, except for
occurrence of distribution of cash dividends, stock dividends, transfer of capital reserves for
increase of capital stock, allotment of shares or any other ex-right or ex-dividend matters to either
M&A Party.
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(II) Number of shares issued for stock-for-stock merger
Till the signing date of the agreement, HTC's capital stock totaled 1,175,009,597 shares, with
1,175,009,597 HTC shares involved in the stock-for-stock merger. Calculated by the stock-for-stock
ratio, Hirisun's shares issued for the stock-for-stock merger totaled 1,175,009,597 shares.
From the base date of pricing till the date of stock-for-stock merger (both dates included), the
number of shares issued for the stock-for-stock merger will be adjusted, subject to occurrence of
distribution of cash dividends, stock dividends, transfer of capital reserves for increase of capital
stock, allotment of shares or any other ex-right or ex-dividend matters to either M&A Party or
occurrence of share buyback and cancellation to HTC.
The number of Hirisun's A-shares issued to each HTC shareholder concerned in the
stock-for-stock merger shall be an integer. If the figures of HTC shares held multiplied by
stock-for-stock ratio are not an integer, these figures will be sorted by decimal places. And one share
will be issued to shareholders in an orderly manner, till actual number of shares for stock-for-stock
merger tallies with the planned number of shares issued. If the number of those with the same last
decimal places is higher than that of remaining shares, the shares will be randomly issued by
computer system, till actual number of shares for stock-for-stock merger tallies with the planned
number of shares issued.
(III) Handling of right-restricting Party B's shares
For HTC's shares that have a pledge, are frozen by judiciary, or restricted from transfer by law,
such shares shall be converted into Hirisun's shares, and the pledge, judicial freezing or other
right-restricting circumstances regarding HTC's shares will remain in force to relevant Hirisun's
shares in stock-for-stock merger.
(IV) Listing of shares issued for stock-for-stock merger
Upon the completion of the stock-for-stock merger, all shares issued by Party B (including
Party B's relevant shares transferred to the provider of cash-based option) will be converted into
A-shares issued by Party A for stock-for-stock merger as agreed upon.
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Party A will request for listing and circulating A-shares issued for the stock-for-stock merger
on SZSE ChiNext market.
In the merger, matters of equity registration and management which related to A-shares issued
by Party A to shareholders concerned for the stock-for-stock merger shall be handled in accordance
with relevant resolutions of boards of shareholders of the M&A Parties, merger report and plan, etc.
III. Right of claim for acquisition granted to Party A's dissenting shareholders
To safeguard the interest of Hirisun's shareholders, and mitigate effects of Hirisun's fluctuating
stock price on investors upon the merger, Hirisun's dissenting shareholders shall be granted the right
of claim for acquisition in the merger in accordance with the Company Law and Articles of
Association of Hangzhou Hirisun Technology Inc
(I) Hirisun's dissenting shareholders
Hirisun's dissenting shareholders eligible for exercising the right of claim for acquisition are defined
by Hirisun shareholders who give valid dissenting votes against proposals of the merger plan,
relevant proposals on terms of voting and proposals of the merger agreement made by and between
the M&A Parties at the Hirisun shareholders' meeting convened for the voting of the stock-for-stock
merger, and retain shares with the right to dissent till the date of exercising the right of claim for
acquisition, while carrying out relevant request procedures within the prescribed time frame.
(II) Provider of right of claim for acquisition
Hangzhou Capital, as the provider of right of claim for acquisition, grants Hirisun's dissenting
shareholders the right of claim for acquisition. Hirisun's dissenting shareholders shall no longer
claim the right of claim for acquisition to Hirisun or any other Hirisun's shareholders approving the
merger. After the transaction is put on file by the CSRC, the provider of right of claim for acquisition
gives a pledge to be unconditionally transferred Hirisun's shares held by Hirisun's dissenting
shareholders that have successfully requested for exercising the right of claim for acquisition, and to
pay appropriate cash consideration to Hirisun's dissenting shareholders by price of right of claim for
acquisition on the date of exercising the right of claim for acquisition.
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(III) Price of right of claim for acquisition
The price of right of claim for acquisition granted to Hirisun's dissenting shareholders is
defined of average trading price of A-shares within 20 trading days (namely, the 20 trading days
before the base date of pricing), i.e., RMB 9.56/share.
From the base date of pricing till the date of exercising the stock-for-stock merger (both dates
included), the price of right of claim for acquisition will be adjusted subject to Hirisun's distribution
of cash dividends, stock dividends, transfer of capital reserves for increase of capital stock,
allotment of shares and other ex-right and ex-dividend matters, if any.
(IV) Mechanism for adjusting price of right of claim for acquisition
1. Target of adjustment
The adjustment targets the price of right of claim for acquisition granted to Hirisun's dissenting
shareholders.
2. Conditions for validating plan for price adjustment
(1) The competent authority of state-owned assets supervision and administration approves the
plan for price adjustment;
(2) Hirisun adopts the plan for price adjustment through deliberation at the shareholders'
meeting;
(3) HTC adopts the plan for price adjustment through deliberation at the shareholders'
meeting.
3. Period of price adjustment
From the notice date of Hirisun's resolution of the merger adopted at the shareholders' meeting
through deliberation till CSRC approves and puts on file the transaction.
4. Triggering conditions
From the notice date of Hirisun's resolution of the transaction at the first board meeting till
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CSRC approves and puts on file the transaction, Hirisun's board of directors will have the right to
convene a meeting for deliberating on whether an adjustment to the price of right of claim for
acquisition is needed during the period of price adjustment, in either case below:
A. The daily closing ChiNext index (399006.SZ) for 10 trading days in the minimum within
the 20 consecutive trading days drops over 20% from the closing index on the trading day prior to
Hirisun's delisting on A-share market; and before the very trading day, Hirisun's daily average
trading price on A-share market for 10 trading days in the minimum within the 20 consecutive
trading days prior to Hirisun's delisting on A-share market (namely, the 20 trading days prior to the
base date of pricing) drops over 20% from Hirisun's average trading price on A-share market;
Or alternatively
B. The daily closing Wind IT Service Index (866311.WI) for 10 trading days in the minimum
within the 20 consecutive trading days drops over 20% from the closing index on the trading day
prior to Hirisun's delisting on A-share market; and before the very trading day, Hirisun's daily
average trading price on A-share market for 10 trading days in the minimum within the 20
consecutive trading days prior to Hirisun's delisting on A-share market (namely, the 20 trading days
prior to the base date of pricing) drops over 20% from Hirisun's average trading price on A-share
market.
5. Adjustment mechanism and base date of price adjustment
Hirisun shall convene a board meeting within time frame of 20 trading days, precisely on the
initial date of triggering price adjustment or the effective date of plan for price adjustment,
whichever is later, for deliberating on whether to adjust the price of right of claim for acquisition
granted to Hirisun's dissenting shareholders in accordance with the plan for price adjustment.
During the period of price adjustment, Hirisun will adjust the price of right of claim for acquisition
granted to dissenting shareholders for once only. If Hirisun has decided to adjust the price of right of
claim for acquisition granted to dissenting shareholders through deliberation at the board meeting
and thus re-triggers conditions for price adjustment, no more adjustments will be needed; if Hirisun
has decided not to adjust the price of right of claim for acquisition granted to dissenting shareholders
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through deliberation at the board meeting and re-triggers conditions for price adjustment, no more
adjustments will be needed either.
The base date of price adjustment is defined by the trading day that follows the date when
Hirisun triggers the conditions as stated above. Upon the adjustment, the price of right of claim for
acquisition granted to Hirisun's dissenting shareholders shall the average trading price within 20
trading days prior to the base date of price adjustment.
(V) Execution of right of claim for acquisition
After the transaction is put on file by the CSRC, Hirisun will determine the date of record of
exercising the right of claim for acquisition. Hirisun's dissenting shareholders that exercise the right
of claim for acquisition may be paid cash consideration by price of right of claim for acquisition by
the provider of right of claim for acquisition on the date of exercising the right of claim for
acquisition, regarding every single share of Hirisun in valid application. Besides, they shall transfer
relevant shares under the name of the provider of right of claim for acquisition. The provider of right
of claim for acquisition shall, on the date of exercising the right of claim for acquisition, be
transferred all Hirisun's shares by Hirisun's dissenting shareholders for exercising the right of claim
for acquisition, and pay cash consideration accordingly.
For exercising the right of claim for acquisition, registered Hirisun's dissenting shareholders
shall meet the following conditions: ① Hirisun's shareholders give valid dissenting votes against
proposals of the merger plan, relevant proposals on terms of voting and proposals of the merger
agreement made by and between the M&A Parties at the Hirisun shareholders' meeting convened
for the voting of the stock-for-stock merger; ② Since Hirisun deliberates on the date of record at the
shareholders' meeting on the merger, Hirisun's shareholders put on file shall retain shares with the
right to dissent till the date of exercising the right of claim for acquisition; ③ relevant request
procedures are successfully carried out during the period of request for right of claim for acquisition.
Only shareholders that meet the above conditions have the right to request for exercising the right of
claim for acquisition, using shares with the right to dissent. If Hirisun's dissenting shareholders sell
shares (including but not limited to mandatory deduction of shares by the judiciary) after the date of
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record is determined at Hirisun's shareholders' meeting on the stock-for-stock merger, their shares in
connection with the right of claim for acquisition will decrease accordingly; If Hirisun's dissenting
shareholders buy shares after the date of record is determined at Hirisun's shareholders' meeting on
the stock-for-stock merger, their shares in connection with the right of claim for acquisition will not
increase and even be granted no right of claim for acquisition.
Hirisun's dissenting shareholders put on file that hold the following shares have no right to
claim for exercising the right of claim for acquisition using their shares held: ① Right-restricting
Hirisun's/HTC's shares, such as shares restricted from transfer owing to any pledge, other third party
rights, judicial freezing and other circumstances prescribed by laws or regulations; ② Shares whose
lawful holders pledge to waive the right of claim for acquisition to Hirisun in writing;; ③ Other
shares which the right of claim for acquisition cannot be exercised in accordance with applicable
laws.
Hirisun's dissenting shareholders that have handed over Hirisun's shares as the collateral for
securities margin trading shall each transfer Hirisun's shares from their credit guarantee account to
their ordinary securities account in the securities company before the date of record of right of claim
for acquisition, for exercising the right of claim for acquisition. Hirisun's dissenting shareholders
that have carried out the agreed buyback securities trading shall complete procedures for advance
buyback in time before the date of record of right of claim for acquisition, for exercising the right of
claim for acquisition.
Relevant taxes and dues incurred from exercising the right of claim for acquisition shall be
borne by Hirisun's dissenting shareholders that exercise the right of claim for acquisition, provider
of right of claim for acquisition and other entities in accordance with related laws, regulations, and
stipulations of regulators, and securities depository and clearing agency. If it is not explicitly
prescribed by laws, regulations, and stipulations of regulators, and securities depository and
clearing agency, it shall be resolved by the parties concerned by reference to market practice through
negotiation.
If the merger plan is not ratified or approved by the boards of shareholders of the M&A Parties
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or related regulators, or government agencies, thus resulting in failed implementation of the merger,
Hirisun's dissenting shareholders shall not exercise the right of claim for acquisition, or claim any
compensations or indemnities to the M&A Parties.
After the transaction is approved and put on file by the CSRC, Hirisun will otherwise give a
notice to Hirisun's dissenting shareholders on details in the plan for the right of claim for acquisition
(including but not limited to request for, settlement and delivery of the right of claim for acquisition),
and make information disclosure as per laws, regulations and stipulations of SZSE in time.
IV. Cash-based option of Party B's dissenting shareholders
To safeguard the interest of HTC's shareholders, and mitigate effects of HTC's fluctuating
stock price on investors upon the merger, HTC's dissenting shareholders shall be granted the
cash-based option in the merger in accordance with the Company Law and Articles of Association
of Hangzhou Turbine Power Group Co., Ltd.
(I) HTC's dissenting shareholders
HTC's dissenting shareholders eligible for exercising the cash-based option are defined by
HTC shareholders who give valid dissenting votes against proposals of the merger plan, relevant
proposals on terms of voting and proposals of the merger agreement made by and between the M&A
Parties at the HTC shareholders' meeting convened for the voting of the stock-for-stock merger, and
retain shares with the right to dissent till the date of exercising the cash-based option, while carrying
out relevant request procedures within the prescribed time frame.
(II) Provider of cash-based option
Hangzhou Capital, as the provider of cash-based option, grants HTC's dissenting shareholders
the cash-based option. HTC's dissenting shareholders shall not claim the cash-based option to HTC
or any other HTC shareholders that approve the merger any longer. After the transaction is put on
file by the CSRC, the provider of cash-based option gives a pledge to be unconditionally transferred
HTC's shares held by HTC's dissenting shareholders that have successfully requested for exercising
the cash-based option, and to pay appropriate cash consideration to HTC's dissenting shareholders
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by price of cash-based option on the date of exercising the cash-based option.
(III) Price of cash-based option
The price of cash-based option granted to HTC's dissenting shareholders is defined by average
trading price of HTC's B-shares within 20 trading days (namely, the 20 trading days before the base
date of pricing), i.e., HKD 7.77/share. Converted by the middle rate between RMB and HKD (HKD
1=RMB 0.91496) disclosed by the People's Bank of China on the trading day prior to B-share
delisting, i.e., October 25, 2024, the stock price is RMB 7.11/share. From the base date of pricing till
the date of exercising the cash-based option (both dates included), the price of cash-based option
will be adjusted subject to HTC's distribution of cash dividends, stock dividends, transfer of capital
reserves for increase of capital stock, allotment of shares and other ex-right and ex-dividend matters,
if any.
(IV) Mechanism for adjusting price of cash-based option
1. Target of adjustment
The adjustment targets the price of cash-based option granted to HTC's dissenting
shareholders.
2. Conditions for validating plan for price adjustment
(1) The competent authority of state-owned assets supervision and administration approves
the plan for price adjustment;
(2) Hirisun adopts the plan for price adjustment through deliberation at the shareholders'
meeting;
(3) HTC adopts the plan for price adjustment through deliberation at the shareholders'
meeting.
3. Period of price adjustment
From the notice date of HTC's resolution of the merger adopted at the shareholders' meeting
through deliberation till CSRC approves and puts on file the merger.
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4. Triggering conditions
From the notice date of HTC's resolution of the transaction at the first board meeting till CSRC
approves and puts on file the transaction, HTC's board of directors will have the right to convene a
meeting for deliberating on whether an adjustment to the price of cash-based option is needed
during the period of price adjustment, in either case below:
A. The daily closing ChiNext index (399106.SZ) for 10 trading days in the minimum within
the 20 consecutive trading days drops over 20% from the closing index on the trading day prior to
HTC's delisting on B-share market; and before the very trading day, HTC's daily average trading
price on B-share market for 10 trading days in the minimum within the 20 consecutive trading days
prior to HTC's delisting on B-share market (namely, the 20 trading days prior to the base date of
pricing) drops over 20% from HTC's average trading price on B-share market;
Or alternatively
B. The daily closing Wind Electric Equipment Industry Index (882210.WI) for 10 trading days
in the minimum within the 20 consecutive trading days drops over 20% from the closing index on
the trading day prior to HTC's delisting on B-share market; and before the very trading day, HTC's
daily average trading price on B-share market for 10 trading days in the minimum within the 20
consecutive trading days prior to HTC's delisting on B-share market (namely, the 20 trading days
prior to the base date of pricing) drops over 20% from HTC's average trading price on B-share
market.
5. Adjustment mechanism and base date of price adjustment
HTC shall convene a board meeting within time frame of 20 trading days, precisely on the
initial date of triggering price adjustment or the effective date of plan for price adjustment,
whichever is later, for deliberating on whether to adjust the price of cash-based option granted to
HTC's dissenting shareholders in accordance with the plan for price adjustment. During the period
of price adjustment, HTC will adjust the price of cash-based option granted to dissenting
shareholders for once only. If HTC has decided to adjust the price of cash-based option granted to
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dissenting shareholders through deliberation at the board meeting and thus re-triggers conditions for
price adjustment, no more adjustments will be needed; if HTC has decided not to adjust the price of
cash-based option granted to dissenting shareholders through deliberation at the board meeting and
re-triggers conditions for price adjustment, no more adjustments will be needed either.
The base date of price adjustment is defined by the trading day that follows the date when HTC
triggers the conditions as stated above. Upon the adjustment, the price of cash-based option granted
to HTC's dissenting shareholders shall be the average trading price within 20 trading days prior to
the base date of price adjustment.
(V) Execution of cash-based option
After the transaction is put on file by the CSRC, HTC will determine the date of record of
exercising the cash-based option. HTC's dissenting shareholders that exercise the cash-based option
may be paid cash consideration by price of cash-based option by the provider of cash-based option
on the date of exercising the cash-based option, regarding every single share of HTC in valid
application. Besides, they shall transfer relevant shares under the name of the provider of cash-based
option. The provider of cash-based option shall, on the date of exercising the cash-based option, be
transferred all HTC's shares by HTC's dissenting shareholders for exercising the cash-based option,
and pay cash consideration accordingly. The provider of cash-based option shall proportionally
convert all HTC shares held into A-shares issued by Hirisun for the stock-for-stock merger via the
cash-based option transferred, on the date of exercising the merger plan.
For exercising the cash-based option, registered HTC's dissenting shareholders shall meet the
following conditions: ① HTC's shareholders give valid dissenting votes against proposals of the
merger plan, relevant proposals on terms of voting and proposals of the merger agreement made by
and between the M&A Parties at the HTC shareholders' meeting convened for the voting of the
stock-for-stock merger; ② Since HTC deliberates on the date of record at the shareholders' meeting
on the merger, HTC's shareholders put on file shall retain shares with the right to dissent till the date
of exercising the cash-based option; ③ relevant request procedures are successfully carried out
during the period of request for cash-based option. Only shareholders that meet the above conditions
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have the right to request for exercising the cash-based option, using shares with the right to dissent.
If HTC's dissenting shareholders sell shares (including but not limited to mandatory deduction of
shares by the judiciary) after the date of record is determined at HTC's shareholders' meeting on the
stock-for-stock merger, their shares in connection with the cash-based option will decrease
accordingly; If HTC's dissenting shareholders buy shares after the date of record is determined at
HTC's shareholders' meeting on the stock-for-stock merger, their shares in connection with the
cash-based option will not increase and even be granted no cash-based option.
HTC's dissenting shareholders put on file that hold the following shares have no right to claim
for exercising the cash-based option using their shares held: ① Right-restricting HTC's shares, such
as shares restricted from transfer owing to any pledge, other third party rights, judicial freezing and
other circumstances prescribed by laws or regulations; ② Shares whose lawful holders pledge to
waive the cash-based option to HTC in writing;; ③ Other shares which the cash-based option
cannot be exercised in accordance with applicable laws. The shares with no right to claim for
cash-based option will be proportionally converted into shares issued by Hirisun on the date of
stock-for-stock merger.
HTC's dissenting shareholders that have handed over HTC's shares as the collateral for
securities margin trading shall each transfer HTC's shares from their credit guarantee account to
their ordinary securities account in the securities company before the date of record of cash-based
option, for exercising the cash-based option. HTC's dissenting shareholders that have carried out the
agreed buyback securities trading shall complete procedures for advance buyback in time before the
date of record of right of claim for acquisition, for exercising the cash-based option.
Relevant taxes and dues incurred from exercising the cash-based option shall be borne by
HTC's dissenting shareholders that exercise the cash-based option, provider of cash-based option
and other entities in accordance with related laws, regulations, and stipulations of regulators, and
securities depository and clearing agency. If it is not explicitly prescribed by laws, regulations, and
stipulations of regulators, and securities depository and clearing agency, it shall be resolved by the
parties concerned by reference to market practice through negotiation.
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If the merger plan is not ratified or approved by the boards of shareholders of the M&A Parties
or related regulators, or government agencies, thus resulting in failed implementation of the merger,
HTC's dissenting shareholders shall not exercise the cash-based option, or claim any compensations
or indemnities to the M&A Parties.
After the transaction is approved and put on file by the CSRC, HTC will otherwise give a
notice to HTC's dissenting shareholders on details in the plan for the cash-based option (including
but not limited to request for, settlement and delivery of the cash-based option), and make
information disclosure as per laws, regulations and stipulations of SZSE in time.
V. Arrangement in the interim period
During the interim period, for the sake of smooth business transition, if either party requests for
cooperation of other party (including but not limited to providing relevant materials, issuing a
statement, jointly filing in a request to the competent authority, etc.), if necessary, the other party
shall actively give cooperation.
During the interim period, the M&A Parties shall urge all affiliates thereof to: (1) make
sustainable and independent operation in line with prior operation management and business
practice, and conduct no abnormal transactions or incur no abnormal liabilities in the normal
business course; (2) use the best endeavor to retain good condition of all assets in the main business,
and continuously get well along with competent government agencies, customers, employees and
other related parties; (3) prepare, sort out and keep respective documents and materials, and pay
relevant taxes and dues in time.
During the interim period, either M&A Party shall take the initiative to cope with the other
party's reasonable requests, and furnish the other party with relevant assets, financial books, minutes
of meetings, major credit and debt documents, etc. If either party requests for cooperation of other
party (including but not limited to providing relevant materials, issuing a statement, jointly filing in
a request to the competent authority, etc.), if necessary, the other party shall actively give
cooperation.
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VI. Arrangement on the transfer or delivery of the transaction-related assets
(I) Delivery condition
After this agreement comes into force, the merger will be delivered on the delivery date. The
M&A Parties shall fulfill the obligation of delivery specified in this agreement and sign a document
for validating the asset delivery on the delivery date.
(II) Asset delivery
As from the delivery date, the ownership of HTC's all assets (including but not limited to
properties, trademarks, patents, franchises, works in process and other assets) and relevant rights,
benefits, liabilities and obligations will be attributable to Hirisun. HTC agrees to assist Hirisun in
handling HTC's all formal assets (concerning any assets, special procedures are prescribed by law
for the granting or transfer of rights of such assets or rights in connection with such assets as from
the delivery date, including but not limited to procedures for transfer of land, property, vehicle/ship,
trademarks, patents from HTC to Hirisun. Failure to perform formal handover procedures for
reasons attributable to procedures for alteration of registration will not affect Hirisun's asset-related
rights and obligations.
Upon the completion of the merger, held shares of affiliates of HTC will be attributable to the
surviving company, and relevant affiliates will be altered and put on file under the name of the
surviving company. HTC's affiliates (if any) will be attributable to the surviving company, altered
and put on file as affiliates of the surviving company.
(III) Debt inheritance
Except for liabilities repaid in advance within statutory period at request of creditors, all
outstanding liabilities of the M&A Parties shall be inherited by Hirisun as from the delivery date in
the merger.
(IV) Contract inheritance
As from the delivery date in the stock-for-stock merger, the subject of all contracts/agreements
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in force concluded by HTC with relevant rights, obligations and benefits will be altered from HTC
to Hirisun.
(V) Handover of materials
HTC shall, on the delivery date, hand over all the materials and seal impressions of its bank
account opened, and all its seals to Hirisun. HTC shall, as from the delivery date, hand over any and
all documents which may make a difference in Hirisun's subsequent operation to Hirisun.
(VI) Transfer of shares
Hirisun shall, on the date of stock-for-stock merger, put on file A-shares issued to HTC
shareholders as consideration for the merger under the name of HTC shareholders. HTC
shareholders shall become Hirisun shareholders immediately after the newly increased shares are
put on file under their name.
VII. Handling of transaction-related credit and debt
As from the delivery date, Hirisun will inherit and take on all HTC's assets, liabilities,
businesses, human resources, contracts and all the other rights and obligations.
Pursuant to relevant laws and regulations, Hirisun and HTC will carry out procedures of
notification and announcement to creditors, and depending on requirements raised by respective
creditors within statutory period, repay the debt in advance or otherwise provide guarantee for
respective creditors, or urge third party to do so. Within the statutory period, if relevant creditors
make no claim for repaying the debt in advance or providing guarantee to the M&A Parties, related
outstanding debt will be borne by Hirisun upon the completion of the stock-for-stock merger.
VIII. Placement of employees
From the date of closing, the labor contracts of all employees of Hirisun will continue to be
performed by the surviving company, and the labor contracts of all employees of HTC will be
inherited and continued to be performed by the surviving company. All the rights and obligations
of HTC as the employer of its existing employees will be enjoyed and assumed by the surviving
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company from the date of the merger and acquisition.
Before convening the shareholders' meeting for deliberating on the merger, the M&A Parties
shall separately convene a congress of workers and staff or workers' congress for deliberating on the
plan for placement of employees concerned in the merger.
IX. Validation and termination of this agreement
(I) Validation of agreement
This agreement shall come into force immediately after being signed and affixed with
respective official seals by the parties, with all prerequisite stated below are met:
1. Hirisun's board of directors and board of shareholders separately approve the formal plan for
the stock-for-stock merger;
2. HTC's board of directors and board of shareholders separately approve the formal plan for
the stock-for-stock merger;
3. With consent of Hirisun's board of shareholders, Hangzhou Capital will be exempted from
increasing shares of Hirisun by means of offer;
4. The competent authority of state-owned assets supervision and administration approves the
stock-for-stock merger;
5. The transaction shall be examined and approved by SZSE and put on file by CSRC;
6. The stock-for-stock merger shall be approved, permitted or accepted by other related
competent authorities prescribed by laws and regulations (if any).
If the above prerequisites are not met in whole, this agreement will become null and void,
putting an end to the merger. If the above prerequisites are not met, not for reasons attributable to
breach of contract by either party or the parties, the parties will separately afford fees for signing and
preparing for performing this agreement and bear no liability for each other.
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(II) Termination or rescission of agreement
In one of the following cases, this agreement will be terminated or rescinded:
1. The parties agree to terminate/rescind this agreement through negotiation;
2. The transaction cannot be carried out owing to force majeure or any objective causes other
than the parties under the agreement.
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Chapter V Risk Factors
For evaluation of the transaction, investors shall carefully take the following risk
factors into account:
I. Transaction-related risks
(I) The risk of the transaction being suspended, halted or called off
Though the M&A Parties take precautions for secrecy, take the initiative to manage insider
information and narrow down scope of people aware of insider information amid the planning and
implementation of the transaction for avoidance of communication of insider information, it cannot
rule out the possibility that related agencies and individuals engage in insider trading using the
transaction-related insider information. Therefore, the transaction is at a risk of being suspended,
halted or called off owing to abnormal fluctuation of stock price or abnormal trading, on suspicion
of insider trading.
In view of the complexity of the transaction, there is a certain span from the signing of the
transaction-related agreement till the completion of the transaction, relevant policy changes,
contingencies or force majeure factors on stock market may affect the progress of the transaction,
thus making the transaction at risk of being suspended, halted or called off.
If the transaction is suspended, halted or called off for the above reason, and transaction-related
parties plan to restart the transaction, major changes may happen to the transaction plan and other
transaction-related terms and conditions relative to the disclosed restructuring plan in the plan, so
investors should be on the alert for relevant risks.
(II) Risk of approval of the transaction
The transaction-related proposals have been put under deliberation at the fourth interim session
of the sixth board of Hirisun and tenth session of the ninth board of HTC in 2024. Till the signing
date of the plan, the transaction is yet to meet a plurality of conditions for implementation, as shown
in the plan's "Notification of Material Matters" - "VIII. Completed and outstanding
transaction-related procedures" - "(II) Pending approval for the transaction".
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The transaction shall not be carried out until it is ratified or approved as stated above. There is
uncertainty about whether and when the transaction is ratified or approved, thus investors should be
on the alert for relevant risks.
(III) Risk in connection with right of claim for acquisition and cash-based option
To fully safeguard the benefits of shareholders of Hirisun and of HTC, eligible Hirisun's
dissenting shareholders shall be granted right of claim for acquisition and eligible HTC's dissenting
shareholders shall be granted cash-based option in the stock-for-stock merger. If the stock-for-stock
merger cannot be carried out at last, dissenting Hirisun's and HTC's shareholders shall not exercise
the right of claim for acquisition or cash-based option, and claim any compensations or indemnities
to the M&A Parties on that account.
If Hirisun's stock price is above the price of the right of claim for acquisition when Hirisun's
dissenting shareholders request for exercising the right of claim for acquisition, or HTC's stock price
is above the price of the cash-based option when HTC's dissenting shareholders request for
exercising the cash-based option, Hirisun's and HTC's dissenting shareholders may have their
benefits impaired in request for exercising the right of claim for acquisition or cash-based option. In
addition, dissenting shareholders who request for exercising the right of claim for acquisition or
cash-based option may also be deprived of the opportunity of benefiting from further rise of stock
price of the surviving company.
Investors should be on the alert for relevant risks.
(IV) Risk of forced stock-for-stock merger
The transaction is yet to be approved by Hirisun's and HTC's boards of shareholders through
deliberation at relevant meetings. The resolutions adopted at shareholders' meetings of the M&A
Parties are binding to all shareholders (including shareholders that vote against, abstain or are absent
from the shareholders' meetings and designate no agents for voting) of the M&A Parties. After
essential ratification or approval is granted for the plan for stock-for-stock merger, on the date of
record of stock-for-stock merger, HTC's shares held by HTC shareholders that make no request,
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request in part, are ineligible or invalid in request for exercising the cash-based option, and HTC's
shares held by the provider of cash-based option for granting the cash-based option, will be
proportionally converted into A-shares issued by Hirisun in whole for the stock-for-stock merger.
For HTC's shares that have a pledge, are frozen by judiciary, or restricted from transfer by law,
such shares shall be converted into Hirisun's shares, and the pledge, judicial freezing or other
right-restricting circumstances regarding HTC's shares will remain in force to relevant Hirisun's
shares in stock-for-stock merger.
Investors should be on the alert for relevant risks.
(V) Risk of creditors' request for paying off debt in advance or providing guarantee
Upon the completion of the stock-for-stock merger, HTC will be delisted and disqualified from
being a corporation, while Hirisun will inherit and take on all HTC’s assets, liabilities, businesses,
human resources, contracts and all the other rights and obligations. Pursuant to relevant laws and
regulations, Hirisun and HTC will carry out procedures of notification and announcement to
creditors, and depending on requirements raised by respective creditors within statutory period,
repay the debt in advance or otherwise provide guarantee for respective creditors, or urge third party
to do so.
At the moment, Hirisun and HTC have no external bonds issued, which is indicative of no
relevance to matters of convening a meeting of bond holders. Though the M&A Parties will actively
seek the understanding and approval of the merger from creditors, there is uncertainty in creditors'
opinions about the merger. If creditors of the M&A Parties make a request for repaying the debt in
advance or otherwise providing a guarantee, it may make a difference in Hirisun's and HTC's
financial conditions in the short term. Investors should be on the alert for relevant risks.
(VI) Risk in connection of delivery of assets
Upon the completion of the stock-for-stock merger, HTC will be delisted and disqualified from
being a corporation, while Hirisun will inherit and take on all HTC’s assets, liabilities, businesses,
human resources, contracts and all the other rights and obligations. Under special circumstances,
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some of HTC's assets and contracts cannot be altered or transferred in the course of actual delivery,
which may lead to some uncertainties about delivery time of some assets and contracts and specific
operating procedures. Investors should be on the alert for relevant risks.
(VII) Risk of the transaction relating to contingency of employees
Upon the completion of the stock-for-stock merger, Hirisun's management and employees will
retain their jobs in accordance with employment contracts concluded with Hirisun. HTC's all
employees on the payroll will be accepted and properly arranged by the surviving company. All the
rights and obligations of HTC as the employer of current employees will be attributable to Hirisun
as from the delivery date. Before the relevant general shareholders' meetings to consider the merger,
the two parties will hold a staff representative meeting or a staff meeting respectively to review the
employee placement plan involved in the merger. However, in the future, if there is a dispute
between Hirisun and HTC and its employees due to the Transaction, it may cause the surviving
company to bear the corresponding liability for compensation, which will bring relevant risks to
the surviving company and its shareholders. Investors should be on the alert for relevant risks.
(VIII) Risk of uncompleted audit and valuation
Till the signing date of the plan, all the work in connection with the transaction is yet to
complete, and some data concerned in the plan are not audited by an accounting firm prescribed by
the Securities Law. So discrete use of relevant information is advised for investors. Hirisun's and
HTC's boards of directors and all board members thereof give a pledge on the authenticity and
rationality of relevant data cited from the plan.
Upon the completion of all the transaction-related work, Hirisun and HTC shall otherwise
convene a board meeting, to deliberate on other unsettled matters regarding the transaction and
prepare a report on stock-for-stock merger. Meanwhile, they shall perform relevant procedures for
deliberation at shareholders' meeting. The audited historical financial data, financial data for
reference and valuation will be disclosed in the report on stock-for-stock merger, and final results
may differ from what's disclosed in the plan. Investors should be on the alert for relevant risks.
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II. Relevant risks of the surviving company upon stock-for-stock merger
(I) Risk of integration
Upon the completion of the transaction, the surviving company will pool together resources of
the M&A Parties and exploit scale effect for complementarily. Nevertheless, the stock-for-stock
merger entails a vast quantity and wide scope of assets and businesses. The M&A Parties will be
further integrated in terms of assets, businesses, human resources, and organizational structure, and
make fair and necessary adjustments to management systems, internal control systems, and business
patterns, which may pose certain risks of integration against the surviving company in the short run.
Investors should be on the alert for relevant risks.
(II) Macroeconomic and market risk
The surviving company is engaged in the industrial turbine manufacturing industry which is
inextricably relevant with economic situation of the world and China, international political
situation, equipment investment of industrial enterprises and other factors. In recent years, under a
complex international political and economic environment, external uncertainties have been
mounting; national "carbon peaking and neutrality" goals put forward have profound and
far-reaching impact on downstream sectors, such as petrochemical, steel, power and building
materials. A sluggish industry or fiercer market competition may have adverse effects on business
performance of the surviving company or put the surviving company at risk of macroeconomic
fluctuation and market risk. Investors should be on the alert for relevant risks.
(III) Risk of industrial policy
The industrial turbine manufacturing industry which the surviving company belongs to is
highly susceptible to national policy of "carbon peaking and neutrality" , policy of equipment
renewal, and global trading policies. China now promotes the strategy of innovation-driven
development, keeps improving the green and low-carbon policy, and tightens management of
energy saving and emissions reduction, while scaling up equipment renewal and accelerating
industrial upgrading. Major adjustments or changes to relevant policies, if any, may make severely
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adverse impact on the R&D, production and sales of staples of the surviving company in the future.
Investors should be on the alert for relevant risks.
(IV) Risk of management and operation
Upon the completion of the transaction, market size and business scope of the surviving
company will conspicuously expand, setting higher bars for the organizational structure,
management and control system and decision-making efficiency. The surviving company is
required to further tighten regulation while making allowance for business characteristics, human
resources, management characteristics, etc., for seeking sound and orderly development in its
entirety. Nonetheless, the surviving company may still encounter the risk of management and
operation owing to failure to meet higher bars for management efficiency and talent structure.
Investors should be on the alert for relevant risks.
III. Other risks
(I) Risk of fluctuating stock price
The stock price of a listed company is swayed by not only profitability and potential of
development, but also investor psychology, stock supply-demand relationship, development and
integration of the industry, international and national macroeconomic situation, and political,
economic and financial policies, and a host of other factors. Thus it could be argued that stock prices
of the M&A Parties may fluctuate owing to the factors listed above.
Additionally, some time is needed for completing the transaction-related work, during which,
stock prices of the M&A Parties may fluctuate.
Investors should be on the alert for relevant risks.
(II) Other risks
The likelihood that politics, economy, natural disasters or other uncontrollable factors may
cause adverse effects to the M&A Parties or the transaction cannot be ruled out, so investors should
be on the alert for relevant risks.
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Chapter VI Miscellaneous
I. Opinions of principle of dominant shareholders of the M&A Parties and persons acting
in concert thereof, and plans for reduction of shares of the dominant shareholders and
directors, supervisors and senior executives thereof from the date of restructuring and
resumption of trading till the completion of transaction
(I) Opinions of principle of dominant shareholders of the M&A Parties and persons acting in
concert thereof, and plans for reduction of shares of the dominant shareholders and
directors, supervisors and senior executives thereof from the date of restructuring and
resumption of trading till the completion of transaction
Concerning the opinions of principle over the restructuring and plans for reduction of shares from
the date of restructuring and resumption of trading till the completion of transaction, Hirisun’s
dominant shareholder Hangzhou Capital has declared as follows:
1. In principle, the Company approves the transaction.
2. From the date of resumption of trading till completion of transaction, the Company shall not
directly or indirectly reduce held shares of Hirisun or HTC. Nor shall the Company have any plans
for direct or indirect reduction of shares of Hirisun or HTC.
In violation of the commitment, the Company will bear relevant legal liability.
Concerning the plans for reduction of shares in the transaction from the date of resumption of
trading till completion of transaction, Hirisun’s directors, supervisors and senior executives have
declared as follows:
1. From the date of resumption of trading till completion of transaction, I myself shall not reduce
held shares of Hirisun. Nor shall I have any plans for reduction of shares of Hirisun.
2. In violation of the commitment, I myself will bear relevant legal liability.
(II) Opinions of principle of dominant shareholders of the Acquiree and persons acting in
concert thereof, and plans for reduction of shares of the dominant shareholders and persons
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acting in concert, directors, supervisors and senior executives thereof from the date of
resumption of trading till the completion of transaction
Concerning the opinions of principle over the restructuring and plans for reduction of shares from
the date of resumption of trading till the completion of transaction, HTC’s dominant shareholder
Turbine Co., Ltd. has declared as follows
1. In principle, the Company approves the transaction.
2. From the date of resumption of trading till completion of transaction, the Company shall not
reduce held shares of HTC. Nor shall the Company have any plans for reduction of shares of HTC.
In violation of the commitment, the Company will bear relevant legal liability.
Concerning the plans for reduction of shares in the transaction from the date of resumption of
trading till the completion of transaction, HTC’s directors, supervisors and senior executives have
declared as follows:
1. From the date of resumption of trading till completion of transaction, I myself shall not reduce
held shares of HTC. Nor shall I have any plans for reduction of shares of HTC.
2. In violation of the commitment, I myself will bear relevant legal liability.
II. M&A Parties’ purchase and sale of assets within twelve months prior to the transaction
(I) Acquirer's purchase and sale of assets within twelve months prior to the transaction
Up to the signing date of the plan, Hirisun engaged in no purchase or sale of material assets
prescribed in the Measures for the Administration of Restructuring, purchase or sale of the
transaction-related assets within 12 months prior to the transaction. Nor was the company under
any circumstances necessarily included into scope of cumulative calculations.
(II) Acquiree's purchase and sale of assets within twelve months prior to the transaction
1. On October 30, 2023, HTC convened the third session of the ninth board of directors, adopting
the Proposal on the Negotiated Transfer of 30% of Equity of Car Dealer and Related Transaction
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through deliberation. As agreed upon in the proposal, HTC, through negotiated transfer,
transferred 30% of equity of the car dealer to the dominant shareholder Turbine Co., Ltd., at price
of RMB 28..92 million. Relevant matters were approved at HTC’s second interim general meeting
of shareholders in 2023 through deliberation. The equity transfer constitutes related transaction,
but does not constitute material asset restructuring stipulated in the Measures for the
Administration of Restructuring and is hence of irrelevance with the transaction.
2. On October 30, 2023, HTC convened the third session of the ninth board of directors, adopting
the Proposal on the Proposed Takeover of 48% of Equity of Machinery Company and Related
Transaction through deliberation. As agreed upon in the proposal, HTC signed an equity transfer
agreement with other shareholders of its holding subsidiary Machinery Company, for acquiring 48%
of equity of the Machinery Company at price of RMB 194,616,000. Upon the takeover, the
Machinery Company became a wholly-owned subsidiary of HTC. Relevant matters were
approved at HTC’s second interim general meeting of shareholders in 2023 through deliberation.
The equity transfer constitutes related transaction, but does not constitute material asset
restructuring stipulated in the Measures for the Administration of Restructuring and is hence of
irrelevance with the transaction.
Up to the signing date of the plan, HTC engaged in no purchase or sale of material assets
prescribed in the Measures for the Administration of Restructuring, purchase or sale of the
transaction-related assets within 12 months prior to the transaction. Nor was the company under
any circumstances necessarily included into scope of cumulative calculations.
III. Statement on fluctuation of stock prices of the M&A Parties upon initial disclosure of
restructuring
(I) Statement on fluctuation of stock prices of the acquirer upon initial disclosure of
restructuring
As required by related laws and regulations, Hirisun has conducted self-check on fluctuation of
stock price prior to continuous suspension of A-shares. On account of planning on material asset
restructuring, Hirisun filed in a request to SZSE for suspending its A-shares as from October 28,
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2024. What follows explains the rise and drop of Hirisun’s stock within 20 trading days prior to
its suspension and that of stock market index and industry index in the corresponding period:
The 21st trading day before The last trading day before
Item suspension suspension Rise/drop
(September 20, 2024) (October 25, 2024)
Closing price (RMB/share) 7.75 12.02 55.10%
ChiNext Index (399006.SZ) 1,536.60 2,238.90 45.70%
Wind IT Service Index
1,133.74 1,738.61 53.35%
(866311.WI)
Rise/drop exclusive of impact of market index 9.40%
Rise/drop exclusive of impact of industry segment 1.75%
As shown in the above table, within 20 trading days prior to the first notice date of the
transaction, Hirisun’s stock price cumulatively leaped 9.40%, exclusive of impact of market
index (ChiNext Index: 399006.SZ), far below 20%; the stock price cumulatively rose 1.75%,
exclusive of impact of industry segment (Wind IT Service Index: 866311.WI), equally far below
20%.
In all, Hirisun’s stock price fluctuated below 20% within the first 20 trading days prior to first
notice date of the transaction, exclusive of impact of market index and impact of industry
segment.
(II) Statement on fluctuation of stock prices of the acquiree upon initial disclosure of
restructuring
As required by related laws and regulations, HTC has conducted self-check on fluctuation of
stock price prior to continuous suspension of B-shares. On account of planning on material asset
restructuring, HTC filed in a request to SZSE for suspending its B-shares as from October 28,
2024. What follows explains the rise and drop of HTC’s stock within 20 trading days prior to its
suspension and that of stock market index and industry index in the corresponding period:
The 21st trading day before The last trading day before
Item suspension suspension Rise/drop
(September 20, 2024) (October 25, 2024)
Closing price (HKD/share) 6.97 8.17 17.22%
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The 21st trading day before The last trading day before
Item suspension suspension Rise/drop
(September 20, 2024) (October 25, 2024)
Shenzhen Composite Index
1,494.66 1,974.65 32.11%
(399106.SZ)
Wind Electric Equipment
5,565.76 7,323.55 31.58%
Industry Index (882210.WI)
Rise/drop exclusive of impact of market index -14.89%
Rise/drop exclusive of impact of industry segment -14.36%
As shown in the above table, within 20 trading days prior to the first notice date of the
transaction, HTC’s stock price cumulatively dropped 14.89%, exclusive of impact of market
index (Shenzhen Composite Index: 399106.SZ), far below 20%; the stock price cumulatively
dropped 14.36%, exclusive of impact of industry segment (Wind Electric Equipment Industry
Index: 882210.WI), equally far below 20%.
In all, HTC’s stock price fluctuated below 20% within the first 20 trading days prior to first
notice date of the transaction, exclusive of impact of market index and impact of industry
segment.
IV. The transaction-related entities are not under circumstances prescribed in Article 12 of
Guide to Regulation of Listed Companies No.7 - Regulation of Suspicious Stock Transactions
Regarding Material Asset Restructuring by Listed Companies: Not engaged in material asset
restructuring by listed companies
The transaction-related entities are not under circumstances prescribed in Article 12 of Guide to
Regulation of Listed Companies No.7 - Regulation of Suspicious Stock Transactions Regarding
Material Asset Restructuring by Listed Companies: Not engaged in material asset restructuring by
listed companies. In other words, the M&A Parties and dominant shareholders and actual
controllers of the M&A Parties; directors, supervisors, and senior executives of the M&A Parties,
dominant shareholders of the M&A Parties, directors, supervisors and senior executives of the
actual controllers; intermediaries serving the transaction and handlers thereof; and other entities
are not investigated and put on file or inquired and put on file on suspicion of insider trading. Nor
were they imposed any administrative penalty by CSRC or held accountable for criminal liability
by judiciary by law on suspicion of insider trading regarding material asset restructuring in the
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latest 36 months.
V. Arrangements for protection of rights and interests of small- and medium-sized
investors in the restructuring
In the course of the transaction, the M&A Parties will take arrangements and measures below to
safeguard legitimate rights and interests of investors, especially small- and medium-sized
investors:
(I) Discharge of obligation of information disclosure
To protect legitimate rights and interests of investors and safeguard order of securities market,
Hirisun, HTC and related parties of information disclosure will faithfully perform the obligation of
information disclosure in accordance with the Securities Law, Measures for the Administration of
Information Disclosure by Listed Companies, Measures for the Administration of Restructuring
and relevant laws, regulations and normative documents. Disclosing all relevant information
which may make a difference in the share trading price of Hirisun or HTC or decisions of
investors in an open and fair way, Hirisun, HTC and related parties of information disclosure shall
give a pledge on the authenticity, accuracy, integrity and immediacy of the disclosed information.
(II) Implementation of relevant approval requirements
Concerning the transaction, Hirisun and HTC have carried out legal voting procedures and duties
of disclosure in compliance with relevant provisions. Since the transaction constitutes a related
transaction, related directors have evaded voting. Independent directors have formed a resolutions
over relevant proposals at a special meeting. For deliberation on the transaction-related proposals
at the meetings of shareholders of Hirisun and HTC, related shareholders will evade voting.
(III) Provision of online voting platform for shareholders’ meeting
Pursuant to related regulations of the CSRC and SZSE, Hirisun and HTC will set up an online
voting platform for facilitating shareholders attending the shareholders’ meeting to vote for the
transaction plan, thus ensuring the shareholders can vote and exercise their rights as shareholders
online.
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(IV) Arrangement on the right of claim for acquisition and cash-based option
To fully safeguard rights and interests of small- and medium-sized investors concerned in the
stock-for-stock merger, Hirisun's dissenting shareholders will be granted the right of claim for
acquisition and HTC's dissenting shareholders the cash-based option. For details of arrangement,
refer to “Chapter I Overview of Transaction” - “II. Concrete transaction plan” - “(II) Merger plan”
- “9. Mechanism for protection of interest of Hirisun’s dissenting shareholders” and “10.
Mechanism for protection of interest of HTC’s dissenting shareholders” in the plan.
VI. Mechanism for protection of benefit of creditors
Upon the completion of stock-for-stock merger, HTC will be delisted and disqualified from being
a corporation, while Hirisun will inherit and take on all HTC’s assets, liabilities, businesses,
human resources, contracts and all the other rights and obligations.
Pursuant to relevant laws and regulations, Hirisun and HTC will carry out procedures of
notification and announcement to creditors, and depending on requirements raised by respective
creditors within statutory period, repay the debt in advance or otherwise provide guarantee for
respective creditors, or urge third party to do so. Within the statutory period, if relevant creditors
make no claim for repaying the debt in advance or providing guarantee to the M&A Parties,
related outstanding debt will be borne by Hirisun upon the completion of the stock-for-stock
merger.
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Chapter VII Opinions of Independent Directors and Related Service
Providers about the Transaction
I. Review opinions of the acquirer's independent directors at a special meeting
Pursuant to relevant provisions and requirements in the CSRC Rules for Independent
Directors of Listed Companies, ChiNext Listing Rules, Shenzhen Stock Exchange Guide to
Self-regulation by ChiNext-listed Companies No.2 - Standardized Operation of ChiNext-listed
Companies, as well as Articles of Association of Hangzhou Hirisun Technology Inc., Regulations
on Independent Directors of Hangzhou Hirisun Technology Inc., Hirisun's independent directors
voice opinions as follows at a special meeting:
"1. The company meets all conditions prescribed in relevant laws, regulations and normative
documents for carrying out the transaction.
2. The transaction plan is in line with the Company Law, Securities Law, Measures for the
Administration of Material Asset Restructuring by Listed Companies, Guide to Regulation of
Listed Companies No.9 - Requirements for Regulation of Listed Companies in Planning and
Implementation of Material Asset Restructuring and other laws, regulations and normative
documents concerned, without prejudice to the interest of the company and shareholders,
especially small- and medium-sized shareholders.
3. In accordance with the Measures for the Administration of Material Asset Restructuring
by Listed Companies, Shenzhen Stock Exchange ChiNext Listing Rules and other regulations
concerned, the transaction constitutes material asset restructuring, related party transaction and
restructuring and listing.
4. Concerning the authenticity, accuracy and integrity of the Plan for Hangzhou Hirisun
Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd. & Related
Party Transaction prepared for the transaction and abstract thereof, the company makes full
disclosure of the transaction-related risks, which is conducive to safeguarding the interest of the
company and shareholders, especially small- and medium-sized shareholders and contains no
false records, misleading statements or major omissions.
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
5. The Agreement on Stock-for-stock Merger between Hangzhou Hirisun Technology Inc.
and Hangzhou Turbine Power Group Co., Ltd. made by and between the company and HTC,
which comes into force under some conditions, is authentic and effective and breaks no laws,
regulations, normative documents or Articles of Association.
In all, we believe the transaction is in line with relevant laws, regulations, normative
documents and Articles of Association, and the interest of the company and all shareholders,
without prejudice to the interest of small- and medium-sized shareholders.
II. Review opinions of the acquiree's independent directors at a special meeting
According to the Listing Rules and Measures for the Administration of Independent
Directors of Listed Companies and other laws and regulations concerned, as well as the Articles of
Association of Hangzhou Turbine Power Group Co., Ltd., HTC's independent directors voice their
opinions as follows at a special meeting:
"1. The company meets all conditions prescribed in relevant laws, regulations and normative
documents for carrying out the transaction.
2. In line with the Company Law, Securities Law, Measures for the Administration of
Restructuring and other laws, regulations and normative documents concerned, the transaction
plan is fair and feasible, without prejudice to the interest of small- and medium-sized shareholders.
3. In accordance with the Measures for the Administration of Restructuring, Shenzhen Stock
Exchange Listing Rules and other regulations concerned, the transaction constitutes material asset
restructuring, related party transaction and restructuring and listing.
4. In line with Measures for the Administration of Material Asset Restructuring by Listed
Companies, Compilation Rules for Information Disclosure by Companies Offering Securities to
the Public No.26 - Material Asset Restructuring of Listed Companies and other laws, regulations
and normative documents concerned, the Plan for Hangzhou Hirisun Technology Inc.
Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd. & Related Party Transaction
prepared by the company for the transaction and abstract thereof are authentic, accurate and intact,
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
disclosing details of due statutory procedures for the transaction and transaction-related risks.
5. The Agreement on Stock-for-stock Merger between Hangzhou Hirisun Technology Inc.
and Hangzhou Turbine Power Group Co., Ltd. proposed to be concluded by the company and
Hangzhou Hirisun Technology Inc. is in compliance with related laws, regulations and normative
documents.
6. The related party transaction concerned in the transaction follows the principles of
fairness, openness and justice. The price of the stock-for-stock merger is fair and just, in line with
the Measures for the Administration of Restructuring and other laws and regulations.
7. In the transaction, the company's dissenting shareholders will be granted cash-based
option, which is conducive to safeguarding the legitimate rights and interests of small- and
medium-sized shareholders.
8. The transaction will facilitate the surviving company to improve financial situation with
greater capacity of sustainable operation, focus on main business with higher anti-risk ability,
become more independent and engage in standardized related party transaction and horizontal
competition.
In conclusion, we believe that the transaction conforms to the interest of the company and all
shareholders, without prejudice to the interest of small- and medium-sized shareholders; related
matters comply with laws, regulations, normative documents and articles of association. We agree
that the company conducts the transaction and that relevant proposals are submitted to the
company's board of directors for deliberation. But it should be noted that as the company's board
of directors is deliberating on the related party transaction, related directors shall evade voting."
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
Chapter VIII Statement and Commitment
I. Statement of all directors, supervisors and senior executives of the Acquirer
The Company and all directors, supervisors and senior executives thereof give a pledge on the
authenticity, accuracy and integrity of the plan and abstract thereof, and bear legal liability for
false records, misleading statements or major omissions therein, if any.
All the work of audit and valuation in connection with the transaction is yet to complete, and
audited financial data and valuation results regarding relevant assets will be disclosed in the report
on stock-for-stock merger. The Company and all board members give a pledge on the authenticity
and rationality of relevant data cited from the plan and abstract thereof.
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
(No text below, page of signature and seal of statement of Hirisun’s directors in the Plan for
Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group
Co., Ltd. & Related Party Transaction)
Signature of directors:
_______________ _______________ _______________ _______________
Qian Yuchen Wang Lin Du Minghui Zheng Xiaohu
_______________ _______________ _______________
Lin Xian Lu Guangjun Tan Qing
Hangzhou Hirisun Technology Inc.
November 9,2024
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
(No text below, page of signature and seal of statement of Hirisun’s supervisors in the Plan for
Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group
Co., Ltd. & Related Party Transaction)
Signature of supervisors:
_______________ _______________ _______________
Sun Qinghong Hu Wanrong Zhang Juncong
Hangzhou Hirisun Technology Inc.
November 9,2024
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
(No text below, page of signature and seal of statement of Hirisun’s non-director senior executives
in the Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine
Power Group Co., Ltd. & Related Party Transaction)
Signature of non-director senior executives:
_______________ _______________ _______________
Gao Chunfeng Chen Xiang Ma Hongjie
Hangzhou Hirisun Technology Inc.
November 9,2024
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
II. Statement of all directors, supervisors and senior executives of the Acquiree
The Company and all directors, supervisors and senior executives thereof give a pledge on the
authenticity, accuracy and integrity of the plan and abstract thereof, and bear legal liability for
false records, misleading statements or major omissions therein, if any.
All the work of audit and valuation in connection with the transaction is yet to complete, and
audited financial data and valuation results regarding relevant assets will be disclosed in the report
on stock-for-stock merger. The Company and all board members give a pledge on the authenticity
and rationality of relevant data cited from the plan and abstract thereof.
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
(No text below, page of signature and seal of statement of HTC’s directors in the Plan for
Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group
Co., Ltd. & Related Party Transaction)
Signature of directors:
________________ ________________ ________________ ________________
Ye Zhong Li Binghai Li Shijie Pan Xiaohui
________________ ________________ ________________ ________________
Li Bo Zhang Hejie Xu Yongbin Yao Jianhua
________________
Jin Yingchun
Hangzhou Turbine Power Group Co., Ltd.
November 9,2024
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
(No text below, page of signature and seal of statement of HTC’s supervisors in the Plan for
Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group
Co., Ltd. & Related Party Transaction)
Signature of supervisors:
_______________ _______________ _______________
Zhang Weijie Xie Xueqing Yan Ying
Hangzhou Turbine Power Group Co., Ltd.
November 9,2024
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
(No text below, page of signature and seal of statement of HTC’s non-director senior executives in
the Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine
Power Group Co., Ltd. & Related Party Transaction)
Signature of non-director senior executives:
________________ ________________ ________________ ________________
Wang Gang Cai Weijun Kong Jianqiang Wang Zhengrong
________________ ________________ ________________
Zhao Jiamao Liao Weibing Shao Jianwei
Hangzhou Turbine Power Group Co., Ltd
November 9,2024
.
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
(No text below, page of seal in the Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock
Merger of Hangzhou Turbine Power Group Co., Ltd. & Related Party Transaction)
Hangzhou Hirisun Technology Inc.
November 9,2024
Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock Merger of Hangzhou Turbine Power Group Co., Ltd.
& Related Party Transaction
(No text below, page of seal in the Plan for Hangzhou Hirisun Technology Inc. Stock-for-stock
Merger of Hangzhou Turbine Power Group Co., Ltd. & Related Party Transaction)
Hangzhou Turbine Power Group Co., Ltd.
November 9,2024
