Chongqing Sokon Industry Group (601127.SH) plans to issue additional shares to purchase 100% equity of Longsheng New Energy at a transaction price of 8.164 billion yuan, in order to acquire a super factory and introduce state-owned assets.

Chongqing Sokon Industry Group Stock (601127.SH) announced the issuance of shares to purchase assets report (draft). The listed company plans to acquire 100% equity of Longsheng New Energy held by Chongqing Industrial Mother Fund, Liangjiang Investment Group, and Liangjiang Industry Group through the issuance of shares, at a trading price of 8.164 billion yuan. The issue price is 66.39 yuan per share, with an issuance of 123 million shares, accounting for 7.53% of the total share capital of the listed company after the issuance. In September 2022, the company signed a "Strategic Cooperation Agreement" with the Liangjiang New Area Management Committee, which is responsible for investing in and constructing the Intelligent Connected New Energy Vehicle Industrial Park project, for the company to settle in the automobile industrial park and lease assets for production and operation, and to cooperate in promoting the company to become a leading enterprise in the new energy vehicle industry, and to help Chongqing build a world-class Intelligent Connected New Energy Vehicle Industrial cluster, and to accelerate the formation of a trillion-level automobile industry cluster. It is reported that Longsheng New Energy is the implementing body of the infrastructure supporting project of the Intelligent Connected New Energy Vehicle Industrial Park in Longxing New City, Liangjiang New Area. It is a project company set up specifically to serve the production of new energy vehicles, with its main assets being the land, real estate, infrastructure, and related supporting facilities needed for the production of new energy vehicles. These assets have created an Intelligent Electric Vehicle Factory (referred to as the "Super Factory"). The Super Factory adopts a "four-in-one" intelligent manufacturing architecture, with advanced intelligent terminals, achieving highly automated production, and has created an advanced IOT Internet of Things platform within the industry. The Super Factory can achieve over 3,000 units of Siasun Robot & Automation intelligent collaboration, achieving 100% automation in key processes; utilizing automated quality testing technology, achieving 100% quality monitoring and traceability. This fully reflects the distinctive characteristics of high-tech, high-efficiency, and high-quality new production forces. Prior to this transaction, the company leased the Super Factory from Longsheng New Energy for the production of the WENJIE series intelligent electric vehicle products. With the core advantages of the high production efficiency, outstanding intelligent manufacturing capabilities, and full-cycle intelligent quality management system of the Super Factory, the WENJIE M9 has been highly recognized by the market and has been the top-selling luxury car model for over 5 months. After the completion of this transaction, Longsheng New Energy will become a wholly-owned subsidiary of the company, and the company will gain ownership of the Super Factory, ensuring the security and stability of the production end of the company's products, and enhancing the asset integrity and control of the company's important businesses. The company will closely coordinate with the Super Factory in technological innovation in intelligent electric vehicle technology, and form an advanced production force quality state towards the "new" and the "practicable", through the development of new production forces to promote the company's high-quality development and deepen its implementation. In conclusion, this acquisition will help the listed company maintain advanced production forces to promote high-quality development, ensure the integrity of production end assets, promote the overall implementation of business strategy, and lay a core foundation for performance growth. This transaction will not result in a change in company control. After the completion of this transaction, local state-owned shareholders will become important investors of the company, further demonstrating the key support of state capital for Chongqing's representative company in the intelligent electric vehicle industry, empowering the company to fulfill its role as a leading enterprise in the industrial chain, and laying favorable conditions for the improvement of the supply chain and the coordination of industrial resources in the future.