Shanghai Smith Adhesive New Material Co., Ltd (SHSE:603683) and Suzhou Aofa Enterprise Management Partnership Enterprise (Limited Partnership) entered into a stake acquisition memorandum to acquire 51% stake in Sangbo New Material (Suzhou) Limited from Sangbo Corp. (KOSDAQ:A027580) for $16.8 million (approximately CNY 110 million) on April 8, 2019. The consideration shall be paid in cash. The consideration is the preliminary price of acquisition. Shanghai Smith Adhesive New Material shall acquire 41% stake for $13.5 million (CNY 90.8 million) and Suzhou Aofa Enterprise Management shall acquire 10% stake for $3.3 million (CNY 22.1 million). Presently, Sangbo holds 84.6% stake in Sangbo New Material (Suzhou) Limited. For the period ended December 31, 2018, Sangbo New Material (Suzhou) Limited reported total assets of CNY 332.41 million, total equity of CNY 187.93 million, revenue of CNY 519.39 million and net profit of CNY 10.8 million. The transaction is subject to signing of a formal share transfer agreement. If the parties are unable to sign the share transfer agreement before May 31, 2019 or within other period agreed upon by parties, then the memorandum will automatically be voided. The transaction is approved by Shanghai Smith Adhesive's directorate in its meeting.

Shanghai Smith Adhesive New Material Co., Ltd (SHSE:603683) and Suzhou Aofa Enterprise Management Partnership Enterprise (Limited Partnership) cancelled the acquisition of 51% stake in Sangbo New Material (Suzhou) Limited from Sangbo Corp. (KOSDAQ:A027580) on June 1, 2019. Up to the date of this announcement, the time limit stipulated in the memorandum has expired, and Shanghai Smith Adhesive along with all parties agree on the receipts stipulated in the memorandum. The memorandum of understanding has lost its validity because of the failure of further cooperation in the purchase.