China National Electric Apparatus Research Institute Co., Ltd. (688128.SH) plans to acquire a 49% stake in Kunming High Altitude Electrical Equipment Testing and increase its capital.

China National Electric Apparatus Research Institute Co., Ltd. (688128.SH) announced that its wholly-owned subsidiary, Weikai Testing Technology Co., Ltd. (referred to as "Weikai Testing"), plans to use its own funds to acquire 49% of the shares of Kunming Gao Haiba Electric Appliance Testing Co., Ltd. (referred to as "Gao Haiba Company"), a subsidiary of Kunming Electric Appliance Science Research Institute (referred to as "Kunming Electric Institute"), held by two non-state-owned shareholders, and to increase its capital. The transaction is expected to involve a total amount of 28.77 million yuan (with the final price based on the evaluation value filed by the state-owned asset supervision and administration authority). After completion of this transaction, Weikai Testing will hold 70% of the shares of Gao Haiba Company. It is reported that Gao Haiba Company is mainly engaged in electrical and appliance product testing, with key testing capabilities including CCC testing of low-voltage complete switchgear, high-altitude environmental adaptability testing, electrical product commissioned testing and procurement inspection, and government commissioned spot checks. Gao Haiba Company is the national high-altitude electrical product quality inspection and testing center, the mechanical industry high-altitude electrical product quality supervision and testing center, the laboratory designated by the State Administration for Market Regulation for mandatory certification of low-voltage complete switchgear, and a national high-tech enterprise. After this transaction is completed, the company will leverage the existing qualifications and technical capabilities of Gao Haiba Company in high-altitude environmental testing and inspection to further strengthen its own quality technical service capabilities, seize the development opportunities in the high-altitude environmental testing market, accelerate the layout of quality technical service business in the new energy equipment industry, and expand the growth space of its business. Meanwhile, Weikai Testing will continuously improve the quality technical service capabilities and market development level of Gao Haiba Company through the introduction of resources such as technology, management, market, and customers, and actively expand its business in the Southwest region, increase market share, and bring incremental performance with Gao Haiba Company as a fulcrum. Overall, this transaction will help achieve complementary advantages in resource capabilities for both sides, efficiently expand business in coordination, and after the full integration of both parties' testing businesses, help eliminate potential industry competition, in line with the company's development strategy.