SMHC(600131) ZHESHANG SECURITIES·2024-12-10 10:10Investment Rating - The investment rating for the company is "Accumulate" [7] Core Views - The company announced on December 9, 2024, that it signed a share acquisition letter of intent with its controlling shareholder, which includes commitments to avoid competition and extend the performance period of related transactions [2] - The company plans to acquire 100% of Yili Technology in cash, which will directly enhance its performance. Yili Technology achieved a revenue of 2.636 billion yuan and a net profit of 188 million yuan in 2023, contributing 34.4% and 22.7% to the company's total revenue and net profit, respectively [3] - The company is expected to benefit from a clearer business interface with State Grid Corporation, which will eliminate overlapping business with South瑞 Group and others, potentially increasing its market share significantly [4] - The company aims to reduce the proportion of related transactions below 50% by December 27, 2029, by diversifying its business and actively pursuing mergers and acquisitions [5] - Earnings forecasts for 2024-2026 are 8.528 billion yuan, 9.459 billion yuan, and 10.478 billion yuan, with corresponding net profits of 908 million yuan, 1.037 billion yuan, and 1.186 billion yuan, reflecting growth rates of 11.14%, 10.92%, and 10.77% respectively [6] Summary by Sections Acquisition and Performance Enhancement - The company plans to acquire 100% of Yili Technology, which will enhance its earnings without diluting equity [3] Market Position and Competition - The company is positioned to increase its market share due to the exit of competitors from overlapping business areas [4] Business Diversification Strategy - The company is committed to reducing related transactions and diversifying its business through mergers and acquisitions [5] Financial Projections - Revenue and net profit forecasts for 2024-2026 indicate steady growth, with a projected PE ratio decreasing from 31.14 to 21.75 [6]