Overview of the Transaction
In December 2024, following a change in the actual controller of Loncin General, it will be indirectly controlled by Zongshen Industrial Group Co., Ltd. There exists industry competition between Zongshen Power and Loncin General in motorcycle engines and general machinery. To effectively resolve this competition and achieve focused and specialized development, Zongshen Power intends to swap assets with Loncin General. The assets to be acquired include Loncin General's general machinery-related assets and liabilities, centered on the equity of Chongqing Xinlongxin Electromechanical Co., Ltd. The assets to be disposed of are Zongshen Power's motorcycle engine-related assets and liabilities, centered on the equity of Chongqing Zongshen Engine Manufacturing Co., Ltd. The price difference will be compensated in cash, and the transaction does not involve issuing shares. The specific asset scope will be further clarified and determined after due diligence, auditing, and evaluation, with pricing based on an evaluation report from a qualified institution as per the Securities Law of the People's Republic of China. Loncin General, controlled by Mr. Zuo Zongshen, is a related party, making this a related transaction. Preliminary studies indicate that this transaction will constitute a major asset restructuring as defined by the Administrative Measures for Major Asset Restructuring of Listed Companies. This transaction will not lead to changes in the controlling shareholder or actual controller of the company. The transaction price has not yet been determined and will be based on the assessed values of the assets involved. The company will promptly organize independent financial advisors, legal advisors, auditing firms, and evaluation institutions to conduct due diligence and will sign a formal transaction agreement after completing the relevant asset audits and evaluations, which will be submitted for review by the board of directors and shareholders' meeting.