Xinxing Cathay International Group Co., Ltd. agreed to acquire Guangdong Jihua Park Investment Development Co., Ltd, Wuhan Jihua Park Investment Construction Co., Ltd, Jihua Group Jiangsu Industrial Investment Co., Ltd, Qinhuangdao Jihua 3544 Shoes Co., Ltd. and Jihua 5303 Garment Co., Ltd from Jihua Group Corporation Limited (SHSE:601718), Jihua 3506 Textile & Apparel Co., Ltd. and Nanjing Jihua 3521 Special Equipment Co., Ltd. on December 2, 2020. Under the terms of transaction, Xinxing Cathay International Group Co., Ltd. will acquire 10% stake in Qinhuangdao Jihua 3544 Shoes Co., Ltd. from Jihua 3506 Textile & Apparel Co and remaining 90% from Jihua Group Corporation Limited and Xinxing Cathay International Group Co., Ltd. will acquire 1.98% in Jihua 5303 Garment Co., from Nanjing Jihua 3521 Special Equipment Co., Ltd and remaining 98.02% from Jihua Group Corporation Limited. 5 subsidiaries reported total common equity of CNY 621.5 million, total assets of CNY 2.4 billion and net loss of CNY 40.7 million for the year ending December 31, 2019.

The deal is subject to shareholder approval of Jihua Group Corporation Limited. As of July 1, 2022, the transfer agreement stipulates that the debt owed by the target company to the company shall be paid off by the target company in 3 installments before December 31, 2022, specifically, the principal of CNY 400,000,000 shall be paid before December 31, 2021, and CNY 600,000,000 shall be paid before June 30, 2022. The principal of CNY 622,451,277.62 shall be paid before December 31, 2022.