Baotou Dongbao Bio-Tech Co.,Ltd (SZSE:300239) signed a share transfer agreement to acquire 60% stake in Qingdao Yiqing Medicinal Capsules Co., Ltd., from Qingdao Gon Technology Co., Ltd. (SZSE:002768) and Qingdao Boyuan Management Consulting Partnership (limited partnership) for approximately CNY 270 million on August 19, 2021. Pursuant to the terms of the agreement, within five working days from the effective date of the agreement, Baotou Dongbao Bio-Tech Co.,Ltd shall pay 55% of the transfer price, totaling CNY 149.5 million; Baotou Dongbao Bio-Tech Co.,Ltd shall pay the remaining transfer price, totaling CNY 122.3 million within six months from the effective date of the agreement. Baotou Dongbao Bio-Tech Co.,Ltd will acquire 9.6 million shares representing 48% stake in Qingdao Yiqing Medicinal Capsules Co., Ltd., whereas 2.4 million shares of Qingdao Yiqing Medicinal Capsules Co., Ltd., representing 12% stake will be acquired from Qingdao Boyuan Management Consulting Partnership (limited partnership).

As a result of the transaction, stake of Qingdao Gon Technology Co., Ltd., in Qingdao Yiqing Medicinal Capsules Co., Ltd., will decrease from 80% to 32%, whereas the stake of Qingdao Boyuan Management Consulting Partnership (limited partnership) will cease to exist. After the completion of this transaction, Baotou Dongbao Bio-Tech Co.,Ltd will hold 60% of the shares of Qingdao Yiqing Medicinal Capsules Co., Ltd and consolidate it in it's statements. As at June 30, 2021, Qingdao Yiqing Medicinal Capsules Co., Ltd., had total assets of CNY 384.4 million and net worth of CNY 33.4 million.

The transaction still needs to be submitted to the general meeting of shareholders of Baotou Dongbao Bio-Tech Co.,Ltd for deliberation. The transaction has been reviewed and approved at the 14th meeting of the 7th Board of Directors and the 12th meeting of the 7th Board of Supervisors of Baotou Dongbao Bio-Tech Co.,Ltd. The transaction does not constitute a reorganization and listing, and it does not require approval from the relevant authorities.