TOPNC (07688.HK): Letter of Intent to Acquire at Least 70% of CNC Machine Tool Target

NewTimeSpace News: On 20 October 2026, TOPNC (stock code: 07688) issued a voluntary announcement that it entered into a non-legally-binding letter of intent with a potential seller and a target company, under which the Company will conditionally acquire, and the potential seller will conditionally sell and procure the target's other shareholders to sell, an aggregate of not less than 70% of the target's equity; the target is principally engaged in the research, development, manufacturing and sale of multi-axis multi-channel CNC machine tools and direct-drive high-speed five-axis machine tools and related services, with products used in precision machining of 3C precision structural parts, AI cooling plates, optical module structural components, humanoid robot precision joints and new energy vehicle components.

The announcement stated that the consideration and payment terms for the possible acquisition will be further agreed and determined under a definitive agreement; following signing, the Company is entitled to conduct due diligence on the target, with the potential seller and the target required to provide assistance; all parties will further negotiate a formal and binding agreement subject to the results of due diligence and valuation assessment. Except for provisions on confidentiality, legal effect and dispute resolution, the letter of intent is not legally binding, is valid for 90 days and may be terminated by any party on one week's written notice.

The Company said the possible acquisition forms part of its strategy to enrich its CNC machine tool product matrix and expand into high-growth downstream segments: the Group previously focused on large five-axis machine tools for the aerospace sector, while the target has mature multi-axis, multi-channel high-speed precision machine tool technology and direct-drive high-speed five-axis machine tool technology, with an established customer base and automated turnkey delivery capabilities in 3C precision structural parts, AI cooling plates, optical module components, humanoid robot joints and new energy vehicle components. Completion is expected to deliver product-line complementarity, synergies in R&D and supply chain, and to accelerate domestic substitution of core industrial mother machines. The announcement cautioned that, if implemented, the possible acquisition may constitute a major transaction or a very substantial acquisition and may or may not proceed.