Huangshanghuang(SZ:002695) Xin Lang Cai Jing·2025-08-18 10:04Core Viewpoint - The company Huang Shang Huang is attempting to acquire a controlling stake in Fujian Lixing Food Co., Ltd. to address its declining revenue and low capacity utilization, which has dropped to 23% over the past four years [1][6]. Group 1: Acquisition Details - Huang Shang Huang plans to acquire 51% of Lixing Food for 495 million yuan, valuing the company at approximately 971 million yuan, with an assessment value increase rate of 252.58% [1][2]. - Lixing Food reported revenues of 415 million yuan and a net profit of 42.22 million yuan in 2024, with a projected net profit of 75 million yuan in 2025 [2]. Group 2: Financial Performance - Huang Shang Huang's revenue has declined from 2.436 billion yuan in 2020 to 1.739 billion yuan in 2024, while net profit fell from 282 million yuan to 40.33 million yuan during the same period [3][4]. - The company's main revenue sources are marinated meat products (72% of total revenue) and rice products (20%), both of which have seen significant sales declines [4]. Group 3: Operational Challenges - The number of stores has decreased from 4,627 in 2020 to 2,898 by mid-2025, indicating a contraction in market presence [4]. - Despite attempts to expand in 2023, the increase in store numbers did not translate into revenue growth, leading to further declines in store count [4][5]. Group 4: Capacity and Utilization Issues - The company has been expanding its production capacity while facing declining sales, resulting in a capacity utilization rate of only 23% as of 2024 [5][6]. - Fixed assets have increased from 711 million yuan in 2021 to 917 million yuan in 2024, with ongoing construction projects valued at 167 million yuan [5]. Group 5: Profitability Concerns - The gross margin and net margin have been declining, with the net margin dropping to 2.17% in 2024 [6]. - The company is caught in a cycle of declining sales, idle capacity, and reduced profitability, raising questions about the effectiveness of the proposed acquisition to resolve these issues [6].