EQS-News: MeiDong Auto (1268.HK) Announced to Acquire StarChase Motorsports Limited for Cash Consideration of RMB 3.7 Billion

【For Immediate Release】                                             13 December 2021

China MeiDong Auto Holdings Limited

(Incorporated in the Cayman Islands with limited liabilities)

(Stock code: 1268.HK)

Acquire StarChase Motorsports Limited for Cash Consideration of RMB 3.7 billion

Boosting New Car Sales and Customer Coverage to Strengthen its Market Position in Porsche Brand in the PRC

(13 December 2021 - Hong Kong) The fast-growing auto distributor focusing on high-potential 2nd to 4th tier cities market in the PRC, China MeiDong Auto Holdings Limited ("MeiDong Auto" or the "Company", together with its subsidiaries, the "Group", stock code: 1268.HK) is pleased to announce that the Company and the seller have entered into an acquisition agreement, pursuant to which the Company has conditionally agreed to acquire all issued shares of StarChase Motorsports Limited for a total cash consideration of RMB3,700,000,000. Upon completion, the Target Company will become a wholly-owned subsidiary of the Company, and accordingly, the assets, liabilities and financial results of the Target Group will be consolidated into the consolidated financial statements of the Group.

StarChase Motorsports Limited is an automobile dealership group in the PRC which operates the Porsche automobile brand. It has 7 4S dealership stores, 4 showrooms and 3 service points, totaling 14 points, in seven cities in the PRC, namely, Nanjing, Qingdao, Tianjin, Chongqing, Weifang, Jinan and Zhengzhou. Each of the Target Group's dealership store is a 4S dealership store that integrates four principal automobile-related businesses, i.e. sales, spare parts, service and survey. It offers a broad range of sales and services, including sales of new automobiles, after-sales services, which include maintenance and repair services as well as sales of spare parts and accessories, and automobile agency services, which include automobile financing, insurance, and registration agency services. For the nine months ended 30 September 2021, revenue of StarChase Motorsports amounted to approximately RMB4,748.2 million, and net profit after tax and extraordinary items amounted to approximately RMB198.7 million (Year ended 31 December 2020: RMB191.0 million).
 

The Group believes that the proposed acquisition is in line with its operational strategy of efficiency enhancement. It will significantly increase the Group's new car sale and expand the Group's existing customer coverage. The proposed acquisition will strengthen the Group's market position in Porsche brand in the PRC, which will benefit the Group from the transformation changes in automobile industry. The proposed acquisition is also in line with the Group's expansion strategy, the dealership network of the Target Group will complement the Group's existing network and give rise to synergy effects.

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About China MeiDong Auto Holdings Limited

China MeiDong Auto Holdings Limited is a fast-expanding auto distributor and after-sales service provider focusing on 2nd to 4th tier cities. The Group mainly focuses on mid-end brands and mainstream premium brands, including Porsche, BMW, Lexus, Audi, BMW Mini, Toyota and Hyundai. As of 30 June 2021, the Group had 66 self-operated stores in provinces and cities such as Beijing, Hebei, Hubei, Hunan, Jiangxi, Fujian, Guangdong, Gansu and Anhui in China.

This press release is issued by DLK Advisory Limited for and on behalf of China MeiDong Auto Holdings limited.

For further information, please contact:

DLK Advisory 金通策略

Tel: +852 2857 7101

Fax: +852 2857 7103