Flower King Eco-Engineering(SH:603007) Zheng Quan Zhi Xing·2025-06-18 13:12Core Viewpoint - The company, Huawang Ecological Engineering Co., Ltd., has received an inquiry letter from the Shanghai Stock Exchange regarding its proposed acquisition of a 55.50% stake in Anhui Niwei Automotive Power System Co., Ltd. for a transaction price of 666 million yuan, raising questions about the valuation and financial assumptions behind the deal [1][6]. Group 1: Inquiry on Target Company - The valuation of Niwei Power's 100% equity was assessed at 1.223 billion yuan as of February 28, 2025, reflecting a significant appraisal increase of 665.84% compared to its book value of 71.7146 million yuan as of December 31, 2023 [1][2]. - The company is required to disclose the purposes and pricing basis of Niwei Power's two external financing rounds over the past three years, as well as the background of the previous valuation [1][2]. - The inquiry requests an explanation of any changes in Niwei Power's asset quality and operational status since the last valuation, and the rationale behind the substantial increase in the current transaction valuation [1][2]. Group 2: Sales and Revenue Projections - Niwei Power's projected revenue growth rates for 2025, 2026, and 2027 are 33.28%, with a stable profit margin forecasted [2]. - The company must provide details on existing orders, including customer names, product models, amounts, and delivery cycles, to validate the revenue projections for 2025 [2][3]. - The inquiry emphasizes the need to align sales forecasts with industry trends and customer demand, and to justify the pricing strategy and gross margin stability [2][3]. Group 3: Capacity Utilization and Capital Expenditure - Niwei Power's capacity utilization rates for 2023, 2024, and early 2025 are reported at 22.82%, 41.85%, and 37.94%, respectively, with some projects exceeding capacity [3][4]. - The company is asked to clarify discrepancies between actual and environmental assessment capacity utilization rates and to provide details on recent capital expenditures and their alignment with asset aging [3][4]. - The inquiry also seeks to understand the implications of planned relocations on future capital expenditures and asset depreciation [3][4]. Group 4: Customer Concentration and Dependency - The top five customers accounted for 96.10%, 94.43%, and 95.27% of Niwei Power's revenue in the first two months of the year, indicating high customer concentration [5]. - The company must explain the reasons for high customer concentration and the potential risks associated with dependency on a single major customer, particularly the first customer, Ideal Automotive [5]. - The inquiry requests details on the stability of customer relationships post-acquisition and any measures to mitigate risks related to customer turnover [5]. Group 5: Transaction Structure and Performance Commitments - The transaction includes a performance commitment that Niwei Power must achieve a net profit of no less than 320 million yuan over the next three years, with penalties for underperformance [6]. - The company is required to justify the performance targets set in relation to the transaction valuation and to explain the rationale behind the reward structure for management [6]. - The inquiry also seeks clarification on the accounting treatment of goodwill arising from the transaction and its potential impact on future performance [7]. Group 6: Shareholder Compliance and Historical Transactions - The inquiry highlights concerns regarding past shareholder transactions, including non-compliance with evaluation procedures and potential tax violations [8]. - The company must provide a detailed account of historical share transfers and the legitimacy of the current ownership structure, including any potential conflicts of interest [8]. - The inquiry requests an explanation of the reasons behind the dissolution of any previous shareholder agreements and their implications for future governance [8].