HUAKANG(SH:605077)2024-11-05 03:41Investment Rating - The report maintains an "Outperform" rating for Huakang Co., Ltd. (605077) [5] Core Views - The company plans to acquire 100% equity of Henan Yuxin Sugar Alcohol Co., Ltd. through a combination of issuing shares and cash payment, which will enhance its market position in the sugar alcohol industry [5] - The acquisition is expected to strengthen the company's bargaining power in core products like xylitol, with potential for price increases in the future [5] - The Zhoushan base project is progressing well, with new production capacity set to be released soon, opening up future growth opportunities [5] Summary by Relevant Sections Market Data - Closing price: 16.65 CNY - One-year high/low: 26.15/11.85 CNY - Market capitalization: 4,945 million CNY - Price-to-book ratio: 1.7 - Dividend yield: 4.20% [2] Financial Performance - Total revenue for 2023 is projected at 2,783 million CNY, with a year-on-year growth rate of 26.5% [6] - Net profit for 2024 is forecasted to be 268 million CNY, reflecting a decrease of 27.9% compared to the previous year [6] - Earnings per share for 2024 is estimated at 0.88 CNY [6] Acquisition Details - The acquisition price is set at 12.00 CNY per share, with the target company having a total asset value of 1.368 billion CNY and revenue of 492 million CNY as of H1 2024 [5] - The target company ranks among the top in the industry for xylitol production capacity, with over 30,000 tons [5] Project Development - The Zhoushan base is set to produce 200,000 tons of corn deep processing health food ingredients, with the first phase expected to generate significant revenue upon completion [5] - Additional investments in projects such as corn germ oil and maltodextrin are planned, with expected annual revenues of 1.43 million CNY and 4.44 million CNY respectively [5]