Suzhou Institute of Building Science Group Co., Ltd. (SHSE:603183) intends to acquire a 51% stake in Xuzhou Hongda Civil Engineering Laboratory Co., Ltd. from Xuzhou Municipal Construction Group Co., Ltd. for CNY 33.8 million on April 9, 2021. Under the terms, after agreement is signed and all the following conditions are met (whichever comes later), within thirty working days, 20% of the equity transfer payment shall be paid; 31% of the equity transfer payment shall be paid within thirty working days after the completion of the settlement; within thirty working days after the target company’s audit report is issued in 2021 and the performance commitments agreed in this contract are completed or the compensation is in place, 9% of the equity transfer payment shall be paid; within thirty working days after the target company’s audit report is issued in 2022 and the performance commitments agreed in this contract are completed or the compensation is in place, 20% of the equity transfer payment shall be paid and within thirty working days after the target company’s audit report is issued in 2023 and the performance commitment agreed in this contract is completed or the compensation is in place, the balance is paid. The consideration will be paid in cash. Post completion, Suzhou Institute of Building Science Group will hold 51% stake and Xuzhou Municipal Construction Group will hold 49% stake in Xuzhou Hongda Civil Engineering Laboratory Co., Ltd. The consideration is financed mainly with own funds of Suzhou Institute of Building Science Group. As on November 30, 2020, Xuzhou Hongda Civil Engineering Laboratory reported assets of CNY 53 million, debt of CNY 11.3 million, net assets of CNY 41.7 million. For the year ended December 31, 2019, Xuzhou Hongda Civil Engineering Laboratory reported assets of CNY 44.3 million, debt of CNY 8.1 million, net assets of CNY 36.1 million, income of CNY 30.7 million and net profit of CNY 6.8 million. After the completion of the transaction, the Board of Directors of the target company will consist of three Directors and one supervisor. Suzhou Institute of Building Science Group will appoint two Directors and the supervisor and Xuzhou Municipal Construction Group appoints one Director. The Chairman of the Board shall be a Director appointed by Suzhou Institute of Building Science Group. The target company shall have a General Manager nominated and appointed by the Board of Directors and Financial officer will be nominated by the General Manager and appointed by the Board of Directors after recommendation by Suzhou Institute of Building Science Group to the General Manager. This transaction has been deliberated and approved at the second meeting of the third Board of Directors of Suzhou Institute of Building Science Group.