Reposted from Shanghai Securities News · China Securities Network, Author: Ding Jinling

On August 7, the signing ceremony for the "Solar Coating Business Intellectual Property Transfer Agreement"between MEGA P&C Advanced Materials (Shanghai) Co., Ltd. (hereinafter referred to as "MEGA P&C") and Covestro (Netherlands) B.V. (hereinafter referred to as "Covestro") was successfully held in Shanghai.

This collaboration marks MEGA P&C's official entry into the solar glass coating sector, further expanding its business portfolio. It is understood that this cooperation aligns with the respective strategies of both parties: for MEGA P&C, the acquisition not only includes over 100 patents from 15 patent families globally related to Covestro's solar glass coatings but also encompasses production formulas, trademarks, and certain fixed assets, enabling MEGA P&C to rapidly operationalize the business. For Covestro, the move aims to sharpen its strategic focus on its core businesses.

Both MEGA P&C and Covestro attached great importance to this collaboration. Senior executives from both companies, including MEGA P&C Chairman Wong Yin Yee, Vice Chairman Victor Law, Covestro China President Lei Huanli, and Global R&D Director Prof. Dr. Karsten Danielmeier, witnessed the signing ceremony.

Wong Yin Yee, Chairman of MEGA P&C, stated, "For MEGA P&C, this acquisition of Covestro's solar glass coating business is a strategic move to achieve external growth, enabling the company to quickly enter the solar glass coating market. The renewable energy sector is one of our key strategic directions. The recent acquisition of the solar glass coatings business has further solidified our portfolio, creating a more comprehensive ecosystem encompassing wind power, solar energy, and energy storage. Our "Platform Strategy"is to forge a powerful industrial coatings enterprise through dual pathways: organic growth and external expansion. Moving forward, we will leverage the advantages of being a listed company to strengthen our expansion capabilities while deepening collaborations with international giants to accelerate development."

Victor Law, Vice Chairman of MEGA P&C, added, "This acquisition represents a collaboration with an international leader. Covestro has deep technical expertise and a long history in the solar glass coating field, with its anti-reflective coating (ARC) series and anti-dust coating series technologies leading globally. Compared to standard non-coated solar glass, Covestro's ARC series has been proven to effectively reduce sunlight reflection on glass, increasing solar panel power gain by over 3%. The anti-dust series keeps component glass less prone to dust accumulation, maintaining optimal performance for longer periods. By acquiring Covestro's related assets, intellectual property, and technology, we are confident in providing customers with top-tier products and services. We will continue to invest heavily in technology to ensure customers receive the best solutions. Additionally, unlike our current coating categories, the solar glass coatings acquired this time are at the nanoscale, marking our entry into a more 'microscopic' technical field. We believe this acquisition will not only help us enter the solar glass coating business but also enable us to develop more applications and scenarios based on the patent families, thereby expanding into more business areas."

Cui Jianmin, Board Secretary and CFO of MEGA P&C, explained, "This acquisition does not constitute a major asset restructuring nor involves issuing shares. However, as it involves cross-border transactions, it requires navigating different legal environments, making the transaction arrangements relatively complex. In terms of the acquisition method, we opted for an asset purchase to facilitate subsequent management and bring production closer to the target market. The scope of the acquisition includes not only Covestro's global patents for solar glass coatings but also related trademarks, R&D project materials, process technology data, and certain fixed assets, ensuring MEGA P&C legally and fully owns the relevant technologies. We have also made appropriate arrangements with Covestro for the transition period to minimize friction costs as the business transfers from Covestro to MEGA P&C. From a financial perspective, we have conducted corresponding calculations and sensitivity analyses under various assumptions."

As one of the leading enterprises in China's industrial coatings sector, MEGA P&C continues to enhance its core competitiveness and build new productive forces under its "Industrial Coatings Platform Strategy,"achieving sustainable and healthy growth through both organic and external expansion.