Yak Technology plans to acquire 10% equity of Comet for RMB 147 million

On May 25, Yak Technology announced that it had signed an Equity Acquisition Agreement with Lai Minggui and Lai Mingfu, minority shareholders of Comet (hereinafter referred to as "the counterparty" or "Party B"), to purchase 10% of Comet's equity held by Lai Minggui and Lai Mingfu in cash for RMB 147 million. After the completion of this transaction, the company directly holds 100% of Comet's equity.

It is reported that the valuation of this equity transfer is based on the completion of Comet's performance commitments in 2017, 2018 and 2019 (Comet's performance commitments are: the net profit in 2017, 2018 and 2019 is not less than RMB 100 million in 2017, the sum of 2017 and 2018 is not less than RMB 216 million, and the sum of 2017, 2018 and 2019 is not less than RMB 360 million; the audited net profit of Comet in 2017, 2018 and 2019 is: RMB 118.4336 million in 2017, RMB 247.0217 million in 2017 and 2018, and RMB 409.8196 million in 2017, 2018 and 2019). The price of the equity transfer will be determined by negotiation among the parties to the agreement, based on the book value of Comet's net assets as of 2019 (RMB 866.9057 million), and with reference to the previous equity transfer price of Comet's shareholders.

The announcement shows that the registered capital of Chengdu Comet Special Gas Co., Ltd. is 20 million yuan, and its business scope includes the production of sulfur hexafluoride: 8,500 tons/year, tetrafluoromethane: 1,200 tons/year, 40% hydrofluoric acid: 520 tons/year, etc. In 2019, Comet achieved operating income of 442.8058 million yuan and net profit of 164.2064 million yuan. In the first quarter of 2020, it achieved operating income of 48.7840 million yuan and net profit of 13.9042 million yuan.

Yak Technology said that this transaction is based on the company's confidence in Comet's future development prospects and recognition of its value, which is conducive to the company's better optimization of overall resource allocation and in line with the company's development strategy of further focusing on the electronic materials business. Through this transaction, on the one hand, it will reduce the dilution effect of the subsidiary's minority equity on the company's profits and further improve the company's profit level; on the other hand, it will further strengthen the company's control and management of the subsidiary, promote the company's development strategy, and improve decision-making efficiency.