Gelonghui September 14?MOS HOUSE (01653.HK) noticeOn September 14, 2023, the buyerUnique City Limited(a direct wholly-owned subsidiary of the company), sellerHe ZiyiEnter into a sale and purchase agreement with the company, under which the seller conditionally agrees to sell and the buyer conditionally agrees to acquire the sales shares, which is equivalent to the target companyZhichen co., Ltd.50% of the total issued share capital, with a total consideration of HK $15 million, will be paid by allocating and issuing 44117000 consideration shares at the issue price of HK $0.340 per share.

The consideration shares are equivalent to about 18.38% of the total issued share capital of the company on the date of the announcement, and the total issued share capital of the company is about 15.53% after the expansion of the allotment and issuance of consideration shares.

The target company started business as a Hong Kong contractor in February 2023, mainly engaged in project management of solar panel installation in residential, industrial and commercial buildings, provision of renewable energy consulting services and value-added services (including but not limited to maintenance services and decoration works).

Increasing the use of renewable energy is one of the important means to achieve carbon neutrality by 2050. As stated in the Hong Kong Climate Action Blueprint 2050, the Government is committed to increasing the share of renewable energy in the fuel mix for power generation. As mentioned above, the target company is engaged in project management of solar panel installation in residential, industrial and commercial buildings. The target company provides its customers with a wide range of business solutions to meet their various needs. The solutions include investment model and turnkey model. According to the investment model, the target company invests in the solar panel system, and the customer is the project owner. The project owner can sell the renewable energy generated to the power company at a price higher than the normal electricity price. The project owner earns the feed-in tariff and pays the service fee to the target company. According to the turnkey model, the target company provides customers with engineering, procurement and construction services for the construction of solar panel systems. The customer owns the project and equipment and earns all the profits from the feed-in tariff.

At present, the target company has invested in three solar panel systems in residential, industrial and commercial buildings to earn service fees from building owners, and a number of potential projects related to the installation of solar panel systems are under negotiation. The Directors believe that the acquisition represents an ideal business opportunity to further expand the Group's business in the renewable energy industry through the acquisition of a green industry business network, as well as to diversify and broaden the Group's revenue sources and customer base. The Group will continue to expand its product portfolio in order to enhance the diversity of its product portfolio. The Directors are of the view that the sale of solar panel systems complements the Company's core business of selling high-end tile products to retail and non-retail project customers.

The Directors also consider that the acquisition of the target company will enable the Group to provide customers with a more comprehensive service portfolio by combining the Group's ceramic tile products and the target company's energy-saving service solutions and decoration works, thereby enhancing the Group's competitive edge. The seller has assured the buyer that the audited net profit before tax shown in the audited financial statements of the Target Company for the relevant year will be not less than HK $3 million, providing the Company with a guaranteed source of profit.