LY iTECH(SZ:002600) Nan Fang Du Shi Bao·2025-10-31 03:32Core Viewpoint - The company, Liyin Intelligent Manufacturing, announced a cash acquisition of 2.404 billion yuan for a 96.15% stake in Zhejiang Xianglong Machinery, alongside a strong Q3 2025 financial report showing significant profit growth and cash flow [2][5]. Acquisition Details - Liyin's wholly-owned subsidiary will pay 2.404 billion yuan in cash to acquire the stake in Zhejiang Xianglong, which specializes in automotive drive shafts, a key component in vehicle power transmission systems [3]. - Zhejiang Xianglong has established strong ties with major global automotive manufacturers, including Volkswagen and Toyota, as well as domestic companies like BYD and NIO [3][4]. - The acquisition includes performance guarantees, with net profit commitments of at least 175 million yuan, 200 million yuan, and 225 million yuan for the years 2025, 2026, and 2027, respectively [4]. Financial Performance - For the first three quarters of 2025, Liyin reported a net profit of 1.941 billion yuan, a year-on-year increase of 37.66%, with operating cash flow reaching 2.297 billion yuan, up 60.19% [5]. - In Q3 2025 alone, the company achieved a net profit of 1.012 billion yuan, a 39.28% increase from the previous year [5]. Financial Leverage and Debt - The acquisition has led to a significant increase in short-term debt, with short-term loans rising by 245% to 3.210 billion yuan [6][8]. - The company's total short-term liabilities have reached 7.879 billion yuan, exceeding its cash and cash-equivalent assets of approximately 7.029 billion yuan, indicating a potential funding gap [8]. Strategic Positioning - Liyin's acquisition aligns with its "three-legged" strategy, focusing on consumer electronics, automotive components, and future technologies like robotics [10][11]. - The automotive sector is a key growth area for Liyin, with previous acquisitions aimed at enhancing its product offerings in this market [10].