WZ Group(SH:600704) Zheng Quan Zhi Xing·2025-07-16 11:12Core Viewpoint - The company aims to enhance its market share in the cogeneration sector by acquiring 100% equity of Huzhou South Taihu Power Technology Co., Ltd. from Meixin Da Xinwang Energy Co., Ltd. for RMB 145.73 million, which is seen as a strategic move to solidify its leading position in the energy industry [1][2][19]. Transaction Overview - The acquisition involves Zhejiang Wuchan Environmental Energy Co., Ltd., a subsidiary of the company, purchasing the entire equity of Huzhou South Taihu Power Technology Co., Ltd. [2][19]. - The transaction does not constitute a related party transaction or a major asset restructuring, and it does not require the approval of the company's shareholders' meeting [1][2][19]. - The total consideration for the acquisition is RMB 145.73 million, which will be paid in installments [4][16]. Financial Assessment - The valuation of the target company was assessed at RMB 153.205 million as of December 31, 2024, with a negotiated transaction price of RMB 152.73 million after accounting for a cash dividend of RMB 70 million [3][14]. - The assessment utilized both asset-based and income-based valuation methods, with the income approach ultimately being adopted due to its better reflection of the company's growth potential and profitability [12][14]. Target Company Profile - Huzhou South Taihu Power Technology Co., Ltd. is a mature enterprise in the cogeneration sector, primarily engaged in the production and supply of steam, hot water, and electricity [5][6]. - The company has a total boiler capacity of 480t/h and an installed power generation capacity of 48MW [5][6]. Strategic Implications - The acquisition is aligned with the company's strategic vision of becoming a leader in green and efficient environmental energy services, leveraging opportunities presented by the dual carbon strategy [2][19]. - Post-acquisition, Huzhou South Taihu Power Technology will become a wholly-owned subsidiary, contributing to the company's energy business development and transformation [19].