Easyknit International (HKG:1218) entered into a memorandum of agreement (MOU) to potentially acquire 10% to 20% interest in Treasure Arts International Group from Asset Chain (HKG:0616) unit Skill Master Investments, according to separate Thursday filings by the firms with the Hong Kong bourse.

The material asset of the target firm is a HK$940 million property under development in Kowloon, Hong Kong. The property is planned to be developed into a student hostel.

The potential acquisition will allow Easyknit International to further be part of the student hostel market in Hong Kong after developing its own hostel in Kowloon with 100% occupancy.

Under the non-legally binding MoU, the parties will exclusively negotiate on the terms of the purchase till June 12. The acquisition is subject to a formal agreement yet to be entered into by the parties.

Asset Chain was formerly known as Eminence Enterprise.