Xugong Technology announced that the company’s shareholder meeting approved the proposal to purchase 60% equity of Nanjing Chunlan Automobile Manufacturing Co., Ltd. with a 100% agreed voting result. After the acquisition, Xugong Technology can use this as a platform to broaden its product line, quickly enter the heavy truck industry at a relatively low cost, and seize the current favorable opportunity for the development of the heavy truck market to create new profit growth points for the company.

Xugong Technology's securities affairs representative yesterday expressed his hope for the “Daily Economic Hope” that the company will increase investment according to the subsequent development.

Xugong Technology said that Xuzhou Heavy Machinery Co., Ltd. will use Chunlan's existing car chassis manufacturing technology to achieve resource sharing and overall synergies and promote the development of heavy vehicles.

Chunlan has total assets of approximately 290 million yuan and net assets of approximately 160 million yuan. In the first half of this year, it achieved an operating income of 50.706 million yuan and a loss of approximately 23.24 million yuan. Chunlan Motor is a holding subsidiary of Chunlan Group. It was established in September 1997 with a registered capital of 450 million yuan. Jiangsu Chunlan holds 60% shares and Nanjing Dongchi Automobile Industry Group holds 40%.

Prior to this, on July 7th, Xugong Technology and Jiangsu Chunlan Automatic Vehicle Co., Ltd. signed the “Equity Transfer Intent Letter” for purchasing 60% equity of Nanjing Chunlan Automobile Manufacturing Co., Ltd. The current retention of the Chunlan shares has been plaguing the Chunlan Group, and the Chunlan Group also expects to implement the reorganization of resources and has therefore endorsed this acquisition.

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