LONGCHEER (09611.HK): Proposed Acquisition of 80% of a Data Centre Infrastructure Provider for RMB 1.12 Billion
NewTimeSpace News: On 13 August 2026, Shanghai Longcheer Technology Co., Ltd. (stock code: 09611) announced that the Company entered into four share transfer agreements (the founder share transfer agreement, the incentive platform share transfer agreement, the institutional seller share transfer agreement and the individual seller share transfer agreement) with the sellers to acquire an aggregate of 80% equity interest in the target company (Suzhou Anruike Information Technology Co., Ltd.) at a total consideration of RMB 1,120.00 million.
According to the announcement, the target company is a limited liability company established in China on 13 December 2011, a data centre infrastructure products and solutions provider focusing on the R&D, manufacturing and system integration of data centre infrastructure and key equipment, with core products including server cabinets, power distribution units (PDUs), busbars and low-voltage power distribution equipment, and is a national high-tech enterprise. Upon completion of the acquisition, the target company will become a non-wholly-owned subsidiary of the Company and its financial results will be consolidated into the Group's financial statements. For the year ended 31 December 2025, the target company recorded audited revenue of RMB 621.87 million and net profit after tax of RMB 94.60 million.
In respect of the basis of consideration, the appraisal report prepared by the valuer (Zhonglian Asset Appraisal Consulting (Shanghai) Co., Ltd.) in accordance with the China Valuation Standards shows that the market value of 100% equity interest in the target company as of the valuation date (31 March 2026) was RMB 1,509.00 million; the valuation adopted the market approach (comparable company method, using the enterprise value/sales ratio multiple) as the basis for the final conclusion, with a liquidity discount of 32.08% estimated by reference to the IPO pricing of companies in the relevant industry. For reference, the book value of the target company's shareholders' equity as of the valuation date was RMB 287.44 million, representing an appreciation of RMB 1,221.56 million or 424.98%. The consideration for the 80% interest does not exceed the appraised market value of such 80% interest under the appraisal report.
In respect of the profit guarantee, Mr. Ding, Mr. Ren, Ms. Li and the incentive platform, as profit guarantors, have undertaken that if the actual results of the target company fall below the guaranteed results, they will compensate the Company in cash under the compensation mechanisms agreed in the relevant share transfer agreements, and the Company may deduct the compensation amounts from the instalments of consideration payable to the relevant profit guarantors; the profit guarantee period covers the three financial years ending 31 December 2028. Upon completion, the target company will establish a new board of three directors, of which the Company is entitled to appoint two and Mr. Ding one, with the chairman to be elected from among the directors appointed by the Company; the target company will continue to be led primarily by Mr. Ding (as general manager). As the highest applicable percentage ratio of the acquisition exceeds 5% but all applicable percentage ratios are below 25%, the acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Hong Kong Listing Rules, without the circular and shareholders' approval requirements, and does not constitute a connected transaction.
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