Shandong Teamgene Technology (SH:603151) Sou Hu Cai Jing·2025-06-19 01:23Core Viewpoint - The company plans to acquire 100% equity of seven companies in the pig farming and feed production sector, aiming to extend its business from feed production to a vertically integrated model that includes pig farming and sales [1][4][5]. Group 1: Acquisition Details - The acquisition involves seven companies: Beixi Agriculture, Ruidong Weili, Xinmu Agriculture, Ruidong Agriculture (Lijin), Ruidong Agriculture (Shandong), Weili Agriculture (Binzhou), and 80% of Paistong [1][4]. - The transaction price will be determined after the completion of auditing and evaluation, adhering to the principles of good faith [4]. Group 2: Financial Performance of Target Companies - Beixi Agriculture reported revenues of 155.19 million, 130.76 million, and 46.81 million for 2023, 2024, and the first four months of 2025, with net profits of -11.91 million, 11.46 million, and 3.75 million respectively [5]. - Ruidong Weili's revenues were 282.14 million, 311.11 million, and 102.26 million for the same periods, with net profits of -13.16 million, 72.40 million, and 34.54 million [5]. - Xinmu Agriculture had revenues of 76.31 million, 33.35 million, and 6.65 million, with net profits of -29.35 million, -26.67 million, and -7.34 million [5]. Group 3: Company Performance and Market Position - The company has seen a continuous decline in net profits since its IPO in 2022, despite revenue growth [7]. - From 2020 to 2024, the company’s revenues were 1.72 billion, 2.04 billion, 1.66 billion, 1.65 billion, and 2.54 billion, while net profits were 113 million, 146 million, 120 million, 84 million, and 52 million, indicating a downward trend in profitability [7]. - In 2024, the company achieved a revenue growth of 54.36%, reaching 2.54 billion, but net profits declined significantly [8]. Group 4: Challenges and Strategic Shift - The company faces challenges in profitability due to high fixed costs during the ramp-up phase of its projects and a shift towards credit sales, leading to increased accounts receivable and bad debt provisions [8]. - The increase in low-margin feed products has further compressed profit margins, despite a favorable trend in raw material costs [8].