AUPU Group Holding Company (00477.HK) has agreed to sell the property situated at No. 1418 Moganshan Road, Hangzhou City, Zhejiang Province to Hexing Electrical Co., Ltd, an independent third party, for RMB40 million. The estimated net proceeds of RMB35.5 million from the disposal will be used as AUPU's general working capital.

Meanwhile, AUPU has also acquired 1.1334% of Hexing Holding Group's equity interests in Hexing Electrical for RMB40 million, equivalent to a contribution in the sum of RMB1.497 million in the registered capital of Hexing Electrical.

The property comprises a parcel of land with a site area of 15,356 sqm, 2 buildings and various structures erected thereon which were completed in 2001. The buildings comprise an industrial building and an office building. The structures mainly include roads and a shed and the property is currently vacant except for a portion of the property which is leased to Hexing Electrical. The tenancy agreement under which a portion of the property are leased to Hexing Electrical at an annual rental of RMB933,120 will expire on 30 April 2012.

Hexing Electrical is being converted into a sino-foreign JV company with a registered capital of RMB132 million. Its principal business activity is research and development, manufacturing, sale, achievement transfer and technical service of apparatuses and instruments and related parts, testing equipments, moulds, embedded softwares, power system control softwares and engineering. Its net profits after taxation and extraordinary items for the year ended 31 December 2011 were RMB6.663 million.