New Major Shareholder Guangdong Lesso
Strong Support Added to KEDA Group's Business Development

On the evening of February 28th, KEDA Industrial Group Co., Ltd. made an important announcement that there was a new major shareholder, Guangdong Lesso Technology and Industry Co., Ltd. (hereinafter referred to as "Guangdong Lesso").

The relevant information showed that Guangdong Lesso was a wholly-owned subsidiary of China Lesso (Stock Code: 02128. HK), a Hong Kong listed company. Within 25 trading days (from January 18th, 2023 to February 28th, 2023), Guangdong Lesso had spent more than 1.4 billion yuan (conservative estimation) in the secondary market and purchased 97.4210 million shares of KEDA Group (accounting for 5.00% of the total capital stock of KEDA Group), and so had officially joined KEDA Group, becoming the fifth major shareholder of KEDA Group with a shareholding of more than 5%.
 
Analysts noted that Guangdong Lesso had purchased KEDA Group's stock shares in a simple, direct and efficient manner, fully reflecting its confidence in the long-term development of KEDA Group. Moreover, the shares had all been purchased through bidding in the secondary market, which also reflected Guangdong Lesso's recognition of the current valuation of KEDA Group and belief that it was a reasonable target worth purchasing in the secondary market.

Not "Barbarian", But "Partner"
 
"Strong partnership" between KEDA Group and China Lesso saw the clues on February 27th.

KEDA Group's stock price opened and moved higher on February 27th, which ended at 16.38 yuan per share, surging 8.33% with a turnover of 1.484 billion yuan, significantly heavier trading volume than previous days. There was a debate in the capital market about the announcement from China Lesso on the evening of the 27th. The announcement said that on February 27th alone, Guangdong Lesso, its wholly-owned subsidiary, purchased 20,083,783 shares of KEDA Group, equivalent to about 1.03% of the total issued share capital of KEDA Group, at a cost of about 323 million yuan. This was widely believed by investors to be an important incentive for KEDA Group to leap on the day.

Looking into the announcement of China Lesso, it could be seen that Guangdong Lesso purchased stock shares of KEDA Group in good faith, with a clear intention to seek common development. On the one hand, during the period from January 18th, 2023 to February 24th, 2023, Guangdong Lesso had spent about 1.076 billion RMB to acquire 68,627,794 KEDA Group shares in total in the open market, with an average price of 15.68 yuan per share. The trading activities of Lesso are public, and the trading time is not concentrated.; On the other hand, after the announcement on February 27th, Guangdong Lesso held 4.55% of the shares of KEDA Group, which did not reach the "threshold" of 5%. Meanwhile, an announcement in advance could effectively reduce speculation in the secondary market and also avoid questioning about the "surprising" event. In respect of the reasons for the acquisition, China Lesso also made it clear that it had a clear direction for cooperation and development "by actively seeking business cooperation in the overseas market of Africa, strengthening contacts with KEDA Group and exploring the development of new business".

Therefore, with strong desire for cooperation, Guangdong Lesso was willing to grow together with KEDA Group based on full sincerity, who was not a "barbarian", but a "partner".

Guangdong Lesso to Increase Its Stake by 2% to 3% for More Opportunities of Cooperation.
 
On the evening of February 28th, KEDA Group released the "Simplified Report of Change in Equity", indicating that Guangdong Lesso continued to increase its holdings of KEDA Group to 5% on February 28th and had the purchasing of KEDA Group's stocks up to 5% completed within one day from China Lesso's announcement. Meanwhile, Guangdong Lesso also thought highly of the long-term development of KEDA Group, and had clearly stated that it would continue to increase its holdings. The announcement indicated that "Guangdong Lesso plans to increase its holdings further by 2% to 3% in the next 12 months, based on the overall situation of the securities market and combining factors such as the business development of the listed company (KEDA Group) and its stock price".
 
In fact, the prospect of deep cooperation between Guangdong Lesso and KEDA Group was bright and promising, which was expected to achieve "1+1>2".
 
According to public records, Guangdong Lesso was mainly engaged in the manufacturing and sales of plastic pipes and pipe fittings. And its controlling shareholder, China Lesso, specialized in the manufacturing and sales of plastic pipes, home building materials, environment-friendly and photovoltaic integrated energy solutions, fully reflecting Lesso's deep accumulation in building materials and environmental protection solutions. KEDA Group ran business focusing on building materials and machinery, lithium electrical materials and machinery, and had also cultivated businesses, such as clean energy, environmental protection equipment and smart energy. The Group had been committed to energy saving and emission reduction, and new materials development directions.

Therefore, the two parties had a lot of common topics on green economic development. The business cooperation in overseas market in Africa and the exploration of new business explicitly mentioned in the announcement of China Lesso had left more imagination in the market.
 
It was reported that in Africa, where KEDA Group had its building materials business mainly located, 6 ceramic factories were in good operation currently and more production lines of building ceramics and sanitary ware were to be put into production successively this year. Logic suggested that the in-depth cooperation between Guangdong Lesso and KEDA Group would help both write a new chapter for Chinese manufacturing industry in overseas market hand in hand.
 
(Reprinted from the financial website of "JRJ.com")