Core Viewpoint - The acquisition of Fenglong Co., Ltd. by UBTECH Robotics is primarily a strategic move where a technology company seeks to enhance its manufacturing capabilities and supply chain efficiency, leveraging Fenglong's strengths in production [1][10]. Group 1: Acquisition Details - Acquirer: UBTECH Robotics (09880.HK), known as the "first stock of humanoid robots" [2]. - Target: Fenglong Co., Ltd. (002931.SZ), a listed company on the Shenzhen Stock Exchange [2]. - Acquisition Method: A combination of "agreement transfer + voluntary partial tender offer" [2]. - Acquisition Price: RMB 17.72 per share, approximately a 10% discount from the stock price before suspension, totaling RMB 1.665 billion [2]. - Post-acquisition Shareholding: UBTECH will hold about 43% of Fenglong's shares, becoming the controlling shareholder [2]. - Change of Control: The actual controller will change from Dong Jianggang to UBTECH's founder, Zhou Jian [2]. Group 2: Acquisition Process - The acquisition is structured as a "three-step" process to ensure a smooth transition of control [3]. - Step 1: UBTECH will first acquire 29.99% of shares from the original major shareholder at RMB 17.72 per share, totaling approximately RMB 1.161 billion [3]. - Step 2: The original shareholders will simultaneously relinquish voting rights corresponding to 13.01% of the remaining shares, allowing UBTECH to gain effective control with just 29.99% ownership [3]. - Step 3: Following the first step, UBTECH plans to launch a partial tender offer to acquire an additional 13.02% of shares, with the original shareholders committed to selling their 13.01% stake [3]. Group 3: Financial Aspects - Funding Source: The acquisition will be financed entirely through UBTECH's own cash reserves, including funds raised from a recent stock placement in Hong Kong, without using loans or leverage [4]. - UBTECH's Financial Status: The company has seen continuous revenue growth over the past three years, with projected revenue of approximately RMB 1.305 billion in 2024, but is currently in a strategic loss phase, expecting a net loss of about RMB 1.16 billion in 2024 [4]. Group 4: Commitments from Original Shareholders - Performance Commitments: The original shareholders have made binding commitments for Fenglong's net profits to be no less than RMB 10 million, RMB 15 million, and RMB 20 million for the years 2026, 2027, and 2028, respectively, with cash compensation required if targets are not met [5]. - Non-Compete Commitment: The original shareholders have agreed not to engage in competing businesses for two years post-transaction [7]. Group 5: Post-Acquisition Changes - Business Operations: There are currently no explicit plans to change Fenglong's main business, indicating a focus on integration and synergy rather than aggressive transformation [8]. - Management Team: The board will be restructured, with UBTECH entitled to nominate six out of seven directors, while the original shareholders can nominate one director as long as they hold at least 5% of shares [8]. - Independence Assurance: UBTECH and its actual controller, Zhou Jian, have committed to ensuring Fenglong's complete independence in terms of assets, business, personnel, finance, and organization, while avoiding competition and regulating related transactions [9]. Group 6: Strategic Intent Behind the Acquisition - The acquisition is a crucial step for UBTECH to achieve large-scale production and commercialization of humanoid robots, addressing production bottlenecks [13]. - By controlling a listed company, UBTECH not only secures a manufacturing base but also gains access to an A-share capital platform, facilitating future financing, brand exposure, and industry integration [13]. - The integration of Fenglong's manufacturing capabilities with UBTECH's robotics technology aims to create a complete industrial layout combining AI algorithms and precision manufacturing [14].