SYNTRUST GK (08629) announced on December 16, 2025, that the company, Huazhou Construction Quality Center, and the target company Maoming Juzhou Engineering Inspection Co., Ltd. entered into a capital increase agreement. Under the agreement, SYNTRUST GK conditionally agreed to subscribe to 51% of the enlarged registered capital of the target company for a total consideration of RMB13.32 million. Upon completion, the target company will become a non-wholly owned subsidiary of SYNTRUST GK, and its financial performance will be consolidated into the group's financial statements.
The board has actively sought opportunities to strengthen its market position in Maoming and expand its service footprint to third- to fifth-tier cities in western Guangdong. After thorough evaluation and discussions with Huazhou Construction Quality Center and the target company, the directors believe that Huazhou (a county-level city under Maoming) has strong and sustainable demand for inspection and testing services.
In 2024, the target company experienced a decline in performance due to reduced real estate inspection activities and limited competitiveness in road inspection services. However, the board is confident that this trend can be reversed and views the proposed capital increase as a strategic opportunity to reposition the target company for growth.
Currently, the target company lacks sufficient technical parameters and resources to compete effectively in road inspections. Through the proposed capital increase, SYNTRUST GK intends to integrate its existing capabilities—including technology, equipment, and certifications—to rapidly enhance the target company’s road inspection capacity and create operational synergies.
The decline in real estate inspections is seen as a short-term industry fluctuation. In contrast, demand for public infrastructure and road inspections is expected to remain stable in the long term, driven by existing infrastructure investments.
The target company’s improving financial performance provides further support. According to unaudited financial data for the eight months ended August 31, 2025, the target company’s revenue reached approximately RMB9.7 million, a 54.7% increase compared to the fiscal year ended December 31, 2024.
SYNTRUST GK remains optimistic about market recovery and the potential for diversified business development. As of August 31, 2025, the target company served over 90 clients in Huazhou. The directors believe the proposed capital increase will enable the group to leverage its extensive network to quickly expand services in Huazhou.
The capital increase will allow the group to combine its extensive experience in inspection and testing services with the target company’s established presence in Huazhou, jointly developing and expanding the local inspection market while further enhancing the financial performance of both the target company and the group.
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