Singapore-listed Asia Fashion Holdings has agreed to pay 100 million yuan (S$20.9 million) to buy a Hong Kong company that makes construction materials.

Asia Fashion, which manufactures functional knitted fabrics for use in clothes, shoes and bags, will buy China Construction Material (Hong Kong), it said in a filing to the Singapore Exchange on Monday before the market opened.

China Construction Material is an investment holding company that owns Xuzhou Zhongsen, a firm that manufactures and sells wood-based products, surfaces used in interior and exterior décor, and aluminium products.

Xuzhou Zhongsen's net profit after tax for the year ended Dec 31, 2012 was about 30.2 million yuan and its net tangible assets as at Dec 31, 2012 was 128.5 million yuan.

The acquisition will be conditional upon approval by Asia Fashion's shareholders in a general meeting, to be convened at a later date.

Asia Fashion intends to fund the acquisition partly through internal resources and partly from the proceeds of the company's placement of 100 million shares, which was announced in August last year.