Zhongji Innolight (300308) announced on the 23rd that, after deducting non-recurring profit and losses of Suzhou Innolight from 2016 to 2018, accumulated actual net profits reached RMB 1.488 billion. It was therefore agreed that the amount of excess performance rewards of RMB 492 million will be awarded to the company.
Three-year net profit totals RMB 1.488 billion
The acquisition of Suzhou Innolight was launched by Zhongji Innolight in late 2016.
At that time, according to the relevant provisions of the Performance Compensation Arrangement and Excessive Performance Reward outlined in the Performance Compensation Agreement and Shandong Zhongji Electrical Equipment Co., Ltd. Issues Shares to Purchase Assets and Raises Supporting Funds and Related Transaction Reports signed between Zhongji Innolight and eighteen parties, the parties agreed that in 2016, 2017, and 2018 within the annual performance compensation period, after deducting non-recurring profit and loss, the net profit attributable to shareholders of Suzhou Innolight shall not be less than RMB173 million, 216 million and 279 million, respectively. The parties included Liu Sheng, Zhu Hao, Zhu Yong, Yu Bin, Yi Xingfu, Kunrong Venture Capital, He Yu Ke Dai, Tibet Lansheng, You Huiran, Zhou Yuran, Fu Ruihui, Rui Linlan, Yun Changjin, Hong Kong Innolight, Google Hong Kong, ITC Innovation, Kaifeng Innolight and Shanghai Guangyi,
Although costly, the acquisition has proven to be remarkable. From 2016 to 2018, Suzhou Innolight achieved net profits of RMB 236 million, 589 million, and 663 million, respectively, totaling RMB 1.488 billion, significantly exceeding the promised amount. The realization rate reached the levels of 136.52%, 272.79% and 237.48%.
Therefore, according to the previously agreed excess performance rewards, the amount of excess performance reward achieved by Suzhou Innolight from 2016 to 2018 was RMB 492 million, which does not exceed 20% of the total consideration of the assets.