Yadea Group Holdings Ltd. (Yadea, 01585) has agreed to acquire 100% of Garow Technology Group Co., Ltd. (“Garow”) for a maximum consideration of RMB1.02 billion, according to a discloseable transaction announcement filed with the Hong Kong Stock Exchange on 25 August 2026. Post-completion, Garow will become Yadea’s indirect wholly-owned subsidiary, further consolidating Yadea’s presence in China’s fast-growing electric two-wheeler sector.

Transaction Structure and Price Mechanism

• Purchase price: Up to RMB1.02 billion in cash, funded by Yadea’s internal resources. • Adjustments: – Downward: Should Garow’s consolidated net profit fall below RMB50 million for 2H 2026 or below RMB30 million for July-September 2026, the shortfall will be deducted from the consideration. – Upward: If 2H 2026 net profit exceeds RMB80 million but is ≤RMB100 million, the price rises by RMB2 million; if it surpasses RMB100 million, the increase is RMB5 million (thresholds prorated if completion deviates from 184 days after signing). – Any “Prohibited Outgoings” or profit/loss from assets excluded from the deal will also adjust the final payment.

Payment Schedule

1. Earnest Money: RMB5 million within seven business days of signing. 2. First Payment: 25% of the total price (net of earnest money) into an escrow account within seven business days. 3. Second Payment: 70% of total price within seven business days post-completion. 4. Third Payment: 5% of total price 12 months after completion, subject to potential set-off against any vendor indemnities.

Completion Conditions & Safeguards

Ten precedent conditions include accuracy of vendor warranties, regulatory clearances—including antitrust approval by China’s State Administration for Market Regulation—and execution of retention and non-compete agreements with key personnel for at least three years. Failure to satisfy conditions by the long-stop date (maximum 180 days post-signing) permits the purchaser to terminate the deal; breaches may trigger liquidated damages of RMB50 million plus additional compensation for excess losses.

Target Profile and Financials

Garow focuses on R&D, manufacturing and sales of electric bicycles, scooters, tricycles and related components. It reported: • 2024 revenue of RMB1.74 billion and net profit after tax of RMB14.85 million. • 2025 revenue of RMB2.68 billion and net profit after tax of RMB122.54 million. • Total assets rose from RMB0.83 billion at end-2024 to RMB1.25 billion at end-2025, with net assets increasing from RMB177.50 million to RMB331.60 million.

Strategic Rationale

Management views the acquisition as a key step to strengthen Yadea’s multi-brand, multi-product strategy, expand its footprint in commercial-use electric two-wheelers—particularly the delivery segment—and capture synergies in scale, R&D and distribution. Garow’s proprietary smart dual-chip 2.0 system and established delivery-rider customer base align with Yadea’s technology-driven growth strategy.

Regulatory Classification

Given the highest applicable percentage ratio exceeds 5% but is below 25%, the transaction is classified as a “discloseable transaction” under Chapter 14 of the Hong Kong Listing Rules, requiring announcement but no shareholder approval or circular.

Upon completion, Garow’s financials will be fully consolidated into Yadea’s results, enhancing the group’s scale and earnings base in China’s competitive electric mobility market.