Wanlang Acquires Anhui Xirui; Home Appliance Parts.
On the evening of September 10th, Wanlang Magnetic Plastics (603150) announced that in order to enhance the supporting capabilities of the home appliance parts industry chain, the company plans to acquire a 50% equity stake in Anhui Xirui Technology Co., Ltd. (hereinafter referred to as "Anhui Xirui") held by the shareholder Kui Peng, with a transfer amount of 32.9891 million yuan.
The announcement indicates that before this transaction, the company's joint venture, Huoshan Venture Investment, held a 50% equity stake in Anhui Xirui; after the completion of this transaction, the company will directly hold a 50% equity stake in Anhui Xirui, while the company's joint venture, Huoshan Venture Investment, will continue to hold a 50% equity stake in Anhui Xirui, forming a joint investment with related parties. Over the past 12 months, there have been no other related transactions between the company and the related party Huoshan Venture Investment, and there have been no similar related transactions with other related parties.
Regarding this transaction, Wanlang Magnetic Plastics stated that Anhui Xirui's main products are glass shelves, tempered glass panels, and color crystal glass panels, and it has the qualifications of being a glass accessories supplier for customers such as Midea and Meiling. After the company acquires Anhui Xirui, it can further synergize with the company's glass-related home appliance parts business. After the completion of this acquisition, the company will directly hold a 50% equity stake in Anhui Xirui, with the company's nominated board members accounting for two-thirds of the total, and having operational decision-making power, financial control, and so on. Therefore, after the completion of this acquisition, Anhui Xirui will be included in the company's consolidated financial statements, which is beneficial for reducing the company's daily related party transactions.
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Looking at the transaction target, Anhui Xirui was established in August 2019, with Kui Peng as the legal representative and a registered capital of 25.9 million yuan. Its business scope includes glass manufacturing, among others. In terms of equity structure, Huoshan Venture Investment holds a 50% equity stake in Anhui Xirui, and the natural person Kui Peng holds a 50% equity stake in Anhui Xirui, with Kui Peng being the actual controller of the company.
The announcement shows that currently, Anhui Xirui's main products are glass shelves, tempered glass panels, and color crystal glass panels, and it has the qualifications of being a glass accessories supplier for customers such as Midea and Meiling.
In terms of financial data, as of the end of the first half of 2024, Anhui Xirui's total assets were 99.118 million yuan, total liabilities were 43.3465 million yuan, and owner's equity was 55.7719 million yuan. In 2023 and the first half of 2024, the company achieved revenues of 85.6204 million yuan and 44.5793 million yuan, respectively; net profits were 3.4917 million yuan and 4.766 million yuan, respectively.
From a valuation perspective, as of June 30, 2024, the book value of all shareholders' equity of Anhui Xirui was 55.7719 million yuan. The asset-based method of evaluation valued it at 65.9782 million yuan, with an appreciation of 10.2062 million yuan, an appreciation rate of 18.30%; the income method of evaluation resulted in a value of 72.112 million yuan. The transfer price of the target equity in this transaction was negotiated based on the asset-based evaluation value and determined to be 32.9891 million yuan.
Wanlang Magnetic Plastics is quite optimistic about this transaction, stating that it is in line with the company's overall strategic planning. After the completion of the transaction, the company's glass products can obtain direct supply qualifications for Midea, Meiling, and others, the glass product production base will be expanded, which will help the company's glass business to explore the market. At the same time, Anhui Xirui can provide the company with glass product materials, forming an industrial chain synergy effect, further enhancing the competitiveness of the company's home appliance parts and promoting the continuous and stable development of the home appliance main business.
Recently, Wanlang Magnetic Plastics has also attracted many institutional investors to conduct research. Institutions are generally concerned about the company's overseas investment strategy and the development of the company's refrigerator door seal business.
On August 13th, Wanlang Magnetic Plastics released a record of investor relations activities, showing that in 2023, the company's refrigerator door seal revenue was 1.014 billion yuan, a year-on-year increase of 17.52%. In recent years, refrigerators have shown trends such as large volume, multi-door, and cross-opening doors, which require increased lengths of door seals and increased sales volumes, and the added value of refrigerator door seal products has also been correspondingly increased. As China's first-tier home appliance brands continue to increase their overseas layout, the company uses its mature overseas operating experience and actively increases overseas investment.In terms of overseas investment, Wanlang Magnetic Plastics stated that since the beginning of its internationalization in 2011, the company has established 13 production bases in 7 countries and is currently increasing its overseas investment. The company will use its overseas subsidiaries as channels to gradually expand product categories and develop new customers based on its advantageous refrigerator door seal products. On this foundation, it will extend its connections with new industries such as automotive parts, create a new business growth curve, and build a dual equilibrium strategy both domestically and internationally.
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