At the beginning of establishment, Dongfang Precision framed a strategic concept of "getting bigger, not just stronger". Chairman of the Board Tang Zhuolin said that the Company had begun following the strategy that "merger and acquisition should serve as one of the important ways for the Company to develop and grow in the future", which is known as the “Dongfang + ”strategy, since it planned to go public.

　　To Shape Intelligent Manufacturing Layout by “Dongfang +” Strategy

　　In March of 2014, Dongfang Precision completed acquisition of 60% equities of Fosber Italy; In July of 2014, Dongfang Precision completed the equity participation of 20% in Jaten Robot; In July of 2015, Dongfang Precision completed acquisition of 80% of the equities of Parsun Power; In October of 2015, Dongfang Precision completed its equity participation of 40% in Ferretto Group, Italy; In January of 2016, Dongfang Precision and Ferretto Group, Italy jointly established Guangdong Ferretto Intelligent Logistics System Co., Ltd. In July of 2016, Dongfang Precision completed acquisition of 100% equities of EDF Europe, Italy. The Company completed its extension to the upstream of the industrial chain through acquisition of Fosber Italy; Acquisition of EDF Europe, Italy helped to upgrade R&D of the existing printing press series; Equity participation in Jaten Robot and Ferretto was intended to set foot in the intelligent logistics system. Acquisition of the above four enterprises is related to the intelligent packaging sector, the Company’s tradition business, while acquisition of Parsun Power marks the beginning of the Company’s core high-end parts layout. And a variety of acquisitions all stem from the Dual-Core Business strategy, with the two sectors which the Company strives to develop.

　　Since listing, focusing on the core of intelligent manufacturing, the Company has primarily formed a business layout featuring coordinated development of the two business sectors of “intelligent packaging equipment” and “core high-end parts” by means of a series of internal and external expansion. At present, Dongfang Precision has generally shaped one of its main business sectors, manufacturing of "intelligent packaging equipment”; focusing on the core components and parts applied in high-end manufacturing, the "core high-end parts” sector comprises core high-end parts applied in aircrafts, ships, automobiles and industrial robots.

　　Set Foot in the New Energy Industry by Acquiring Pride Power

　　As the core parts for new energy vehicles, power battery system works as the key link in industry chain of new energy automobiles. Classified in the technology-intensive industry, power battery packs directly affect safety, energy density, reliability, environmental adaptability and performance matching of the whole vehicle, etc. Its crux of difficulty lies in the technology of customized development.

　　As one of the enterprises firstly succeeding in research and development and in scale production and batch application of the lithium iron phosphate power batteries for new energy automobiles, Pride Power possesses considerable technical strength and the numbers of its supporting schemes and announcements, announcements in application and national patents for its power batteries for new energy vehicles amount to over 120, 21 and 60, respectively, with the batteries co-developed by Pride Power applied in the new energy buses during the 2008 Beijing Olympics. Featuring high security, high reliability, high energy density, high environmental adaptability and long life-span, the power batteries of Pride Power have attracted many customers of domestic leading enterprises of new energy automobiles, such as the BJEV, Zhongtong Bus, Nanjing King Long, Foton Motor, etc. for its high-quality downstream customers, and its sales remained steady, ranking in the top few all along. The financial data showed that Pride’s audited net profit reached RMB88,677,600 and RMB321 million in 2015 and from January to October 2016, respectively.

　　In M&A and restructuring of Pride, Dongfang Precision planned issue shares at the floor price of RMB 9.20/share to raise the supporting funds of no more than RMB2.9 billion, RMB1 billion of which would be used for the investment in the projects of R&D and industrialization of new energy vehicle battery in the Liyang base of Pride, apart from payment for the cash consideration and commission.

　　Complementary Advantages to Achieve Synergies for Three Sides

　　Thanks to cooperation, both Dongfang Precision and Pride can give full play to their respective advantages and achieve synergies of industry, channels and capital.

　　In term of industrial synergy, Dongfang Precision can make intelligent upgrading for the whole production process of Pride, for which, Jaten Robot, a joint stock company of Dongfang Precision, can provide the AGV transfer robots and the affiliated Italian Ferretto Group can offer intelligent stereoscopic warehouses so as to reduce production cost and improve production quality and operational efficiency; meanwhile, taking Pride as the breakthrough point, Dongfang Precision can infiltrate its intelligent manufacturing and intelligent logistics business into various processes of the modern automobile manufacturing industry and give full play to the Company's industrial synergies. In terms of channel synergy, Dongfang Precision has broad business presence in the industry of “intelligent automation equipment”. Its joint stock company, Jaten Robot, has established partnership with more than one OEMs. The current vehicle manufacturer customer system can offer new channels for Pride to develop its lithium battery system business while the current customers of Pride can also become a pivotal breakthrough point for the intelligent equipment product of Dongfang Precision, effective channel synergy thus being formed. In terms of capital synergy, relying on the capital market platform as a listed company, Pride can effectively solve the capital bottleneck in the process of capacity expansion, constantly enrich and improve the types and models of products and achieve a substantial growth for the company's business scale and product market competitiveness.

　　In the future, still focusing on the "Dongfang +" strategy, Dongfang Precision will coordinate development of the strategic sectors of Dual-Core Business, continue our business layout and intensively develop the high-end core parts industry.