Core Viewpoint - Xiangdian Co., Ltd. plans to acquire 12.5% equity of Tongda Electromagnetic Co., Ltd. from its controlling shareholder, Xiangdian Group, for 208 million yuan, amidst concerns over long-term related party transactions and the financial health of Xiangdian Group [1][2]. Group 1: Acquisition Details - The acquisition is valued at 208 million yuan, with a total equity value of Tongda Electromagnetic assessed at 1.664 billion yuan, reflecting a 60.09% appreciation [4]. - The price-to-earnings ratio for the acquisition is notably high at 46 times, based on Tongda Electromagnetic's projected net profit of 36.18 million yuan for 2024 [4]. Group 2: Related Party Transactions - Over the past decade, Xiangdian Co. has engaged in related party transactions exceeding 2.4 billion yuan, including over 1.5 billion yuan in acquisitions and more than 900 million yuan in asset sales to related parties [4]. - Historical transactions have raised concerns about potential harm to minority shareholders, with instances of Xiangdian Group acquiring shares at undervalued prices [4][6]. Group 3: Financial Health of Xiangdian Group - Xiangdian Group has faced significant financial challenges, with a debt ratio reaching 98.87% and a current ratio of 0.68, indicating high debt pressure [6]. - As of December 31, 2021, Xiangdian Group reported total assets of 15.379 billion yuan and a net asset value of 1.808 billion yuan, with a debt ratio of 88.24% [6]. Group 4: Company Performance and Financing - Since its IPO in 2002, Xiangdian Co. has accumulated a net loss of 1.266 billion yuan while raising 10.924 billion yuan through direct financing, with total dividends amounting to only 474 million yuan [8]. - The company has announced a new round of financing plans to raise 2 billion yuan for various projects, although the effectiveness of this financing in improving operational and financial conditions remains uncertain [9][10].

Core Viewpoint - Xiangdian Co., Ltd. plans to acquire 12.5% of Tongda Electromagnetic Co., Ltd. from its controlling shareholder, Xiangdian Group, for 208 million yuan, amidst concerns over past related-party transactions and the financial health of Xiangdian Group [1][2]. Group 1: Acquisition Details - The acquisition price for Tongda Electromagnetic is based on a valuation of 1.664 billion yuan, reflecting a 60.09% increase in value [2]. - The projected price-to-earnings ratio for Tongda Electromagnetic based on its 2024 net profit of 36.18 million yuan is 46 times [2]. Group 2: Historical Related-Party Transactions - Over the past decade, Xiangdian Co. has engaged in related-party transactions exceeding 2.4 billion yuan, including over 1.5 billion yuan in acquisitions from Xiangdian Group and over 900 million yuan in asset sales [2]. - Previous related-party transactions have raised concerns about potential harm to minority shareholders, particularly instances where Xiangdian Group acquired stakes at undervalued prices [5]. Group 3: Financial Health of Xiangdian Group - Xiangdian Group has faced significant financial difficulties, with a debt ratio of approximately 98.87% and a net profit of -12.06 million yuan in 2021 [7]. - As of the end of 2021, Xiangdian Group's total assets were 15.379 billion yuan, with a net asset value of 1.808 billion yuan [7]. Group 4: Company Performance and Challenges - Xiangdian Co. has reported cumulative net losses of 1.266 billion yuan since its IPO, despite raising 10.924 billion yuan through direct financing [11]. - The company experienced significant losses in 2018 and 2019 due to market misjudgments and fraud, leading to a total loss of 19.12 billion yuan in 2018 and 15.79 billion yuan in 2019 [8][9]. - Since 2020, the company has shown slight profitability but has increased its capitalization rate for R&D expenses, which may inflate profit figures [9].