STEP (002527.SZ ) released announcement on December 9th 2011, that STEP spent RMB41.54 million raised funds on purchasing 100% shares of Shanghai Yiwen industry Co., Ltd. The main property of Yiwen is 39,879 square meters industry land, and this acquisition is for increasing the necessary land resources for industry development of STEP.
Currently, the business of elevator control system and supporting components keeps growing rapidly, and the capacity need expanding urgently. STEP plans to increase the necessary land resources for industry development by purchasing the shares of Yiwen industry, and then change the operation site of raised funds investment project, namely, the expanding technology transformation project of elevator control system.
The elevator control system with quite high added value has taken up 50% of the major business revenue and over 30% of the gross margin from 2008 to 2011H1. The announcement revealed that the capacity reached 114.34% of annual-designed capacity in 2009. The existing manufacture capacity just catches up with the market demand with difficulty. With the constant increasing of market demand, the insufficient capacity has become the key restricting factor for further market expansion.
After the expanding projects meet the targets, it will increase 12,000 sets of elevator control system, which make the existing capacity up 100%. After initial operation in 2012, it will newly increase 3,000 sets elevator control system, and the operating revenue is conservatively expected to increase RMB30 million.
This purchase project provides sufficient resources guarantee for the achievement of the capacity expansion, product mix optimization and long-term development plan.