TRANSTECH OPTEL (09963) proposes to issue 32.487 million consideration shares to acquire 49% equity interest in Haotai Investment.

TRANSTECH OPTEL (09963) announces that on October 15, 2026, the Company's wholly-owned subsidiary Transtech Optel Hong Kong intends to acquire 49% of the total issued share capital of Haotai Investment from Haodaer Technology for a consideration of RMB249.9 million. The consideration will be paid in full at completion by the Company allotting and issuing 32.487 million consideration shares to the seller at HK$9.00 per consideration share under a specific mandate. As at the date of this announcement, the target company, through its wholly-owned subsidiary, holds 51% equity interest in Yinhu Tianjin, which is principally engaged in the production and sale of optical fiber preforms in China. Upon completion, the Group will hold approximately 24.99% effective equity interest in Yinhu Tianjin. Yinhu Tianjin operates at its registered address at No. 398 Gaoxin Wu Road, Binhai Science and Technology Park, Binhai High-tech Zone, Tianjin, China. The site has a total site area of 26,401.2 sq.m. and a total gross floor area of 14,947.04 sq.m. As at the date of this announcement, Yinhu Tianjin operates four optical fiber preform production lines and four optical fiber preform core rod production lines at the site. Its major customers include (i) an integrated wire, cable and materials group listed on the Tokyo Stock Exchange; and (ii) Futong China Group. In addition, the seller guarantees to the buyer that the audited net profit before income tax of Yinhu Tianjin for the year 2026 (actual profit) will be no less than RMB150 million. If the actual profit is less than the guaranteed profit, the seller shall pay cash compensation to the buyer, capped at RMB30 million. The announcement states that the acquisition is expected to bring significant strategic and operational synergies and will strengthen the Group's competitive position. The Group is principally engaged in the production and sale of optical fiber preforms, optical fibers and optical cables in mainland China, Hong Kong and Thailand. Optical fiber preforms are the necessary precursors for drawing optical fibers and the largest component of the Group's optical fiber production costs. Therefore, a stable and reliable supply of preforms in sufficient quantities and consistent quality is crucial to the Group's operations. Any interruption or shortage would leave the Group's optical fiber drawing capacity underutilized, impair its ability to fulfill customer orders on time, and expose its profit margins to spot market price fluctuations. This is particularly the case under current market conditions. The significant rise in market prices and demand for optical fiber preforms has tightened supply, and given the technical complexity, capital intensity and lead time involved in establishing preform production lines, new preform capacity cannot be brought on stream quickly. Yinhu Tianjin produced approximately 212 tonnes of optical fiber preforms in 2025 and is currently a mature operational source of the Group's most important raw material. The Directors believe that the acquisition will complement the contractual supply arrangement. The framework procurement arrangement ensures the Group's supply of preforms on a contractual basis. The Group's approximately 24.99% effective equity interest in Yinhu Tianjin will align the interests of the Group and the target group and enable the Group to better understand Yinhu Tianjin's production plans and capacity. These factors together will strengthen the stability of supply under the framework arrangement. The equity participation and the framework procurement arrangement will alleviate the Group's supply chain constraints. The acquisition will also enable the Group to share, through the equity method of accounting, in the upstream profits generated by Yinhu Tianjin, including profits from preforms supplied to the Group itself.