Shangguo Investment Management Company has acquired a 5% stake in Shanghai Mechanical for 860 million yuan, becoming the second-largest shareholder and aiming to enhance corporate governance and drive growth.

Target Company Overview

Recently, Shangguo Investment Management Company, a subsidiary of the Group, successfully acquired a 5% stake in Shanghai Mechanical and Electrical Company (hereinafter referred to as 'Shanghai Mechanical') from Shanghai Electric Group Co., Ltd. (hereinafter referred to as 'Shanghai Electric') for a transaction price of 860 million yuan. Following the completion of this transaction, Shangguo Investment Management Company has become the second-largest shareholder of Shanghai Mechanical.

Shanghai Mechanical focuses on mechatronics and is strategically positioned in the high-end equipment manufacturing sector. As a key publicly traded company under Shanghai Electric, this acquisition is aligned with the Group's intention to act as a 'key third party', addressing the demands of state-owned public listed companies, thereby facilitating enterprise value creation and reinforcing the core functions of market value management.

Industry Overview in China

The Chinese machinery industry, especially the high-end equipment manufacturing sector, has experienced substantial growth over the past decade. Driven by government policies promoting innovation and upgrading of industries, companies in this sector