Gelonghui, January 8, 丨 Kam Hing International Holdings (02307.HK) announced that on December 30, 2023, the company's wholly-owned subsidiary, Kam Hing Cloth Co., Ltd. and Tianfu Cheng Co., Ltd. (TPT, a company incorporated in Vietnam that operates a production plant specializing in yarn and fabric knitting and dyeing) entered into a cooperation agreement on manufacturing and processing subcontracting for yarn and fabric knitting and dyeing.
According to the cooperation agreement, (i) the contracting parties will then enter into a formal agreement for a fixed period of at least 10 years; (ii) TPT promises to provide 200 tons of production capacity per month from the date of the formal agreement until June 2024, and to provide up to 1,000 tons of production capacity per month from March 2025; and (iii) Kam Hing Textile will provide the machine investment required to meet TPT production. The two sides further agreed that after two years of cooperation according to the formal agreement, TPT will prioritize equity cooperation with Jinxing Textile, indicating that the group may acquire part of TPT's shares.
The proposed long-term partnerships and potential acquisitions under the cooperation agreement are in line with the Group's strategy to expand and diversify production in Southeast Asia, and demonstrate the company's commitment to strengthen development capabilities. The board of directors believes that the subcontract arrangement will work in synergy with the Group's existing production base, further reduce geopolitical risks, and promote the Group's expansion of production into Southeast Asia.