Snowsky Salt(SH:600929) Tai Mei Ti A P P·2025-12-04 02:51Core Viewpoint - Xue Tian Salt Industry (600929.SH) plans to acquire a 41% stake in Hunan Meter New Materials Technology Co., Ltd. for 260 million yuan, increasing its total ownership to 61% after the acquisition, marking a significant move towards diversification beyond its core salt business [2][3]. Group 1: Investment Details - The acquisition is part of Xue Tian Salt's strategy to enhance its business portfolio, following a previous investment of 51 million yuan in a fiber research institute [2]. - The total investment in Meter New Materials will amount to approximately 370 million yuan, reflecting a 41.16% increase in the company's valuation from 245 million yuan to 629 million yuan over three years [3]. - The company aims to improve its revenue and profit scale through this acquisition, which is expected to enhance its competitiveness in the new energy sector [3]. Group 2: Financial Performance - Xue Tian Salt's revenue for 2024 is projected to decline by 13% to 5.39 billion yuan, with a 57% drop in net profit to 304 million yuan [6]. - In the first three quarters of 2025, the company reported a 21% decrease in revenue to 3.24 billion yuan and a 90% decline in net profit, marking the lowest performance since its listing in 2018 [6][8]. - The company's reliance on the soda ash industry, which constitutes about 27% of its business, has led to significant performance volatility due to cyclical downturns in this sector [7]. Group 3: Market Context - The soda ash industry has entered a downward cycle, with prices dropping over 40% in 2024, further impacting Xue Tian Salt's financials [9]. - The company is attempting to shift its product structure towards high-end salt products, but this strategy may not sufficiently counteract the declining prices of soda ash and related products in the short term [9]. - Xue Tian Salt is also investing in a large-scale project in Hunan, which is expected to increase production capacity significantly, but this may lead to higher financial costs amid falling profits [11][12].