Hangzhou Turbine absorbs Hailianxun in share exchange to boost operations

Hangzhou Turbine Power Group Co., Ltd. (Hangzhou Turbine) is proceeding with a share-based absorption merger of Hangzhou Hailianxun Technology Company Limited (Hailianxun), confirmed by an independent financial advisor report from China Securities Co., Ltd. and related announcements. The merger, approved by both companies' boards and shareholders, involves Hangzhou Turbine issuing A-shares to all Hailianxun shareholders in exchange for their shares. The exchange ratio is 1:1, with Hangzhou Turbine's share price adjusted to 9.35 yuan/share after a 2024 profit distribution and capital reserve transfer of 246,730,000.65 yuan. Hailianxun's share price is also 9.35 yuan/share after its 2024 profit distribution of 6,700,000.00 yuan and capital reserve transfer.

Following the merger, Hailianxun will be delisted and deregistered, with Hangzhou Turbine inheriting all assets, liabilities, businesses, personnel, contracts, and rights. Both companies’ controlling shareholders, Hangzhou Capital and Turbine Holdings, have committed not to reduce their shareholdings from the date of resumption of trading until the completion of the transaction. Hangzhou Capital has also pledged to invest up to 1.5 bn yuan to increase its holdings under specific conditions to stabilize share price. The transaction, classified as a major asset restructuring and a related party transaction, is scheduled for review by the Shenzhen Stock Exchange Listing Review Center.

The merger is designed to resolve historical issues with B-shares, enhance financing capabilities, promote the autonomy of gas turbines, and address Hailianxun's growth bottlenecks. The combined entity will focus on industrial turbomachinery with power information technology as a secondary business, expecting to significantly boost asset quality, revenue, and profitability.