Xiaokang SF Motors 100% equity transfer to Chongqing Jinkang New Energy

On May 31, Chongqing Xiaokang Industrial Group Co., Ltd. (referred to as "Xiaokang Shares") announced that the company reviewed and approved the "Proposal on Adjusting the Internal Shareholding Structure of the Company", respectively, and its SF MOTORS and Jinkang Power New Energy. The 100% equity of the company was transferred to Chongqing Jinkang New Energy Automobile Co., Ltd.

Xiaokang shares said that the adjustment of the shareholding structure is based on the strategic layout of the company's intelligent electric vehicle development, and the company's internal shareholding structure is appropriately adjusted, which is conducive to systematic integration of the intelligent electric vehicle full value chain system, and the matter is under the same control. The transfer of equity between the two does not constitute a connected transaction.

According to public information, Xiaokang was established in 1986. It started with the production of electrical springs and micro-car seat cushion springs. It started manufacturing in the early 21st century. It is currently a main engine, new energy vehicle and automobile. The automobile manufacturing enterprise of the company owns products such as Dongfeng Xiaokang Automobile, Xiaokang Automobile Power and Ruichi New Energy Automobile. One month after its listing in June 2016, Xiaokang announced that it has entered the new energy passenger car market as a traditional car company. New energy is the most important “concept” in the stock market.

Between 2016 and 2017, Xiaokang has been using new energy vehicles as the company's future development. From the current layout, Xiaokang's new energy vehicle plan is divided into two steps, one of which is in the original micro-car. The business of developing electric logistics vehicles, this piece has been tested in Chongqing and began to promote to key cities. The second is the passenger car segment, in which the construction of high-end electric passenger cars is hoping to break away from the two brands of well-off and scenery.

In 2016, Xiaokang shares invested 30 million US dollars in the United States, and SF MOTORS was established in the United States in Silicon Valley. The company announced that it is engaged in the design, research and development, production and sales of smart electric vehicles. But the main development model is based on the acquisition of mature overseas assets. In June 2017, SF Motors announced the acquisition of a US automotive solution integration supplier AM General's civilian vehicle plant for US$10 million.

In October 2017, SF MOTORS signed a “merger agreement” with InEVit, a local electric vehicle battery system R&D and designed company in the United States to acquire 100% of the latter for US$33 million, according to its official introduction, InEVit claims that its battery module system can significantly reduce production costs. In addition, the company's innovative laser welding technology can drive the rapid manufacture of battery modules, which is currently receiving orders for 300,000 euros from Audi.

On March 29, 2018, SF Motors first launched two pure electric SUV concept cars SF5 and SF7 at its Silicon Valley headquarters. The SF5 will be booked in the US at the end of the year, and the new product is expected to enter the Chinese market in 2019.

At present, SF Motors has deployed three R&D design centers around the world, including Silicon Valley Power Systems and Intelligent Driving R&D Center (with Beijing Office in China), Michigan Product Design and Development Center, and China Chongqing Product Design and Development Center. Planning to develop high-end (C-level), mid-end (B-class) electric vehicle products. The C-Class is expected to reach mass production in June 2019, and the B-Class is expected to reach mass production in January 2019.

It is understood that on January 10, 2017, the construction project of Chongqing Jinkang New Energy Automobile Co., Ltd. with an annual output of 50,000 pure electric passenger vehicles was approved by the Development and Reform Commission. It is the eighth car enterprise that has obtained the qualification of pure electric passenger car production. The transfer of 100% equity of SF MOTORS to Chongqing Jinkang means that SF MOTORS will use its qualifications to make domestic products.

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