Foton Industrial (00420) subsidiary plans to acquire 81% of a Vietnamese company's investment share for US$27.945 million

According to Zhitong Financial App, Futian Industrial (00420) announced that on September 9, 2026 (after the trading session), the buyer Ocean Textile Investment Pte. Limited (an indirect wholly-owned subsidiary of the Company) (as the transferee), seller Lian-Ta-Hsing International Co., Ltd, and target company Công Ty TNHH Lian-Ta-Hsing (Vit Nam) entered into an equity transfer agreement.

According to this, the seller conditionally agreed to the sale, and the buyer conditionally agreed to purchase 81% of the target company's share of the target company at a cash cost of US$279.45 million (equivalent to approximately HK$219 million), while the remaining 19% share will be held by persons designated by the seller with the written consent of the buyer.

The target company is a company registered and established in Vietnam's Tay Ninh Province according to law and continues to manufacture knitting, dyeing, and supporting textile products. It has land use rights, fabric production plants, machines and other facilities locally.

After delivery, the target company will become a subsidiary of the Company with an indirect interest holding 81% interest, and the target company's financial results will be consolidated into the Group's financial statements.

The Group is the world's leading comprehensive textile enterprise. It has long focused on building its own production capacity and strategic layout of the global industrial chain. The acquisition will have the following key benefits:

Strengthen asset quality and create synergy effects: The target company is a production and trading company with perfect fabric manufacturing and dyeing and finishing functions. It has a mature fabric production plant in Vietnam's Xining Province, with complete factory facilities and highly modern equipment. Core operating assets, including factory facilities, production equipment and labor, can be obtained immediately through mergers and acquisitions. After independent evaluation, these assets have a good production capacity base and potential for sustainable operation.

Increase regional production capacity and respond to market demand: The Group can immediately obtain mature production bases and management teams, significantly shorten the investment cycle of new production capacity, rapidly increase the Group's weaving and dyeing production capacity, effectively respond to the increase in global demand for textile products and changes in order flow, and make up for the loss of market share due to the shift of the industry's supply chain to Southeast Asia.

Optimizing the industrial chain layout and strengthening the cost structure: The Group can further improve the industrial chain layout in the Southeast Asia region, making full use of Vietnam's advantages of multiple free trade agreements, perfect textile industry chain, abundant labor and location logistics. This move will enhance the efficiency of regional collaboration and short-chain operation of raw materials, enhance cost competitiveness and supply chain resilience, and help the Group seize opportunities for rapid textile and garment development in Southeast Asia.

Promoting overseas development and long-term strategy: The acquisition is in line with the Group's overseas business development strategy and is a key measure in the Group's overseas production capacity layout. By gaining control of target companies, the Group will expand its business scale in Southeast Asia, promote “overseas” and diversified development of production capacity, improve the overall production capacity layout, establish long-term sustainable profit growth points, and strengthen the resilience of the global supply chain to risks.