Gelonghui (02138.HK) announced that on November 30, 2023, the company, the buyer (Jade Master International Limited, an indirect wholly-owned subsidiary of the company), Mason Group Holdings Co., Ltd. and the seller (Full Joyous International Limited, a wholly-owned subsidiary of Mason) entered into this agreement. Under this, the seller agreed to sell shares, which is equivalent to all the shares of various target companies, while jointly holding Xinya 42.88% of the issued share capital is subject to payment in cash of HK$115 million in cash in accordance with the terms and conditions of the agreement. Implementation was completed on the date of the agreement. After completion, the target companies have become wholly-owned subsidiaries of the company, and Xinya has become an associated company of the company.

The target company Active Compass (one of the target companies) was incorporated as an investment holding limited company in Samoa. Immediately before completion, Active Compass was wholly owned by the seller. Active Compass is an investment holding company whose sole assets are 2.288,000 common shares in Xinya, accounting for 5.35% of Xinya's issued share capital. Zhikai (one of the target companies) was incorporated as an investment holding company in the British Virgin Islands. Immediately before completion, Zhikai was wholly owned by the seller. Zhikai is an investment holding company. Its sole assets are 16.058 million series A preferred shares in Xinya, accounting for 37.53% of Xinya's issued share capital. New Asia was incorporated as a limited company in the British Virgin Islands. Xinya Group is mainly engaged in the following business (which includes): providing medical laboratory testing to doctors and medical-related institutions; and distributing medical laboratory equipment and devices. Xinya Group started business in 1993.

The announcement stated that after completion, the company has acquired significant shares in Xinya. Xinya Group's laboratory was accredited by the Hong Kong Laboratory Accreditation Program in 2022. To achieve the Group's strategic goal of sustainable development, the Group has been actively seeking new business opportunities and will gradually invest resources to develop new businesses to create new revenue streams and diversify its revenue sources. The company believes that the acquisition will help the company capitalize on Xinya Group's expertise and network in the life sciences and high-end medical services industry (a developing diversified market segment in Hong Kong, China). In particular, the company believes that the highly fragmented medical laboratory testing market in Hong Kong, China has huge potential and room for development, and that the acquisition will promote the Group's expansion into the medical laboratory testing market.

With Xinya Group's established customer base and broad market coverage, the acquisition is expected to enable the company to expand its position in the laboratory equipment and medical distribution markets and expand its customer network. Vertical integration of established laboratory equipment and medical distributors (such as Xinya) into the Group's existing business is expected to create opportunities for collaboration. The Group will be able to utilize distributors' expertise in distribution channels, logistics and customer relationships to optimize the Group's overall business operations. The integration is expected to improve the Group's operating efficiency, save costs and enhance profitability. By combining the strengths of upstream and downstream business stakeholders, the Group can use such resources and expertise to expand its geographical coverage and further enhance its leading position.