On December 26, LY ITECH unveiled a pivotal advancement in its acquisition strategy: its wholly-owned unit, LY Technology, has achieved a major milestone by acquiring a 96.15% equity interest in Zhejiang Xianglong Machinery Co., Ltd. for a cash consideration of RMB 2.404 billion. Consequently, Zhejiang Xianglong has transformed into a subsidiary under LY ITECH's control and will be reflected in its consolidated financial statements. This strategic move is designed to bolster the company's foothold in the automotive parts industry, propelling its transition from a Tier 2 to a Tier 1 supplier and keeping pace with the burgeoning trends in automotive electrification and intelligent technologies.

As a nationally recognized specialized, sophisticated, and distinctive 'Little Giant' enterprise, Zhejiang Xianglong excels in the production of automotive constant velocity joints and drive shafts, catering to prominent automakers including Volkswagen, Toyota, and BYD. Financial records reveal that the company generated RMB 1.994 billion in revenue and RMB 127 million in net profit for the year 2024, with RMB 969 million in revenue and RMB 92 million in net profit for the first half of 2025, showcasing consistent operational performance.

The transaction is structured as a two-phase cash payment and encompasses performance pledges, with stipulated net profit targets of no less than RMB 175 million, RMB 200 million, and RMB 225 million for the years 2025, 2026, and 2027, respectively. This acquisition is poised to enrich LY ITECH's product lineup in the realm of new energy vehicle components and lay the groundwork for its foray into AI terminals, humanoid robots, and other cutting-edge domains.