Ceepower (SZ:300062) Mei Ri Jing Ji Xin Wen·2025-12-21 12:11Core Viewpoint - Zhongneng Electric has recently announced plans to acquire controlling stakes in three high-voltage electrical companies in Shandong for approximately 857 million yuan, despite having only 661 million yuan in cash as of Q3 2025, raising concerns about the feasibility and risks of this acquisition [1][2][9]. Group 1: Acquisition Details - The acquisition involves purchasing 65% stakes in Shandong Dacheng Electric Co., Shandong Dacheng High Voltage Switch Co., and Shandong Shuifa Chixiang Electric Co., with a total price of 857 million yuan [1][2]. - Zhongneng Electric plans to pay a 100 million yuan deposit before shareholder approval, which could become a sunk cost if the acquisition is not approved [1][4]. - The three target companies have reported significant losses, with two of them collectively losing over 44 million yuan in the first ten months of 2025 [1][9]. Group 2: Financial Implications - If the acquisition is successful, the combined revenue of the three companies is projected to be approximately 1.154 billion yuan for 2024, potentially doubling Zhongneng Electric's revenue [8][9]. - However, the financial health of the target companies is concerning, as they have shown a dramatic decline in performance, with losses reported after previously being profitable [9][10]. - Zhongneng Electric will also assume approximately 292 million yuan in debts associated with the target companies, further complicating the financial outlook [9][10]. Group 3: Governance and Risk Concerns - The management has requested unlimited bidding authority from shareholders, which raises governance concerns and could expose shareholders to risks associated with overpaying for the assets [4][6]. - The acquisition process is complicated by the requirement that bidders must acquire all three companies simultaneously, which adds to the risk and complexity of the transaction [7][8]. - There is uncertainty regarding the success of the acquisition due to market conditions and the performance of the target companies, which could lead to significant financial repercussions for Zhongneng Electric [8][10].