Core Viewpoint - Galaxy Magnetics has initiated an external acquisition of 100% equity in Kyoto Longtai Technology, marking its first external acquisition since its listing in 2010, driven by market dynamics and the need for growth [4][10]. Group 1: Acquisition Details - The acquisition involves signing a letter of intent with 14 counterparties and plans to use a combination of share issuance and cash for the transaction [4][10]. - Kyoto Longtai specializes in ferrite permanent magnets and has a significant market share in the automotive sector, particularly in electronic parking brake (EPB) applications [4][14]. - The acquisition is seen as a strategic move to enhance Galaxy Magnetics' product offerings and market position in the growing automotive electric motor sector [12][14]. Group 2: Financial Performance - Galaxy Magnetics has experienced a revenue decline after peaking at nearly 1 billion yuan in 2022, with revenues fluctuating between 800 million to 1 billion yuan from 2021 to 2024 [8][10]. - The company's net profit has consistently remained above 150 million yuan since its listing, indicating stable financial performance [8][10]. - The stock price has significantly appreciated from under 13 yuan to over 32 yuan, reflecting a strong market response to the company's strategic moves [4][10]. Group 3: Market Context - The rare earth industry has seen a substantial increase in valuations due to policy changes, with the sector's index surpassing previous highs [10][12]. - Galaxy Magnetics' stock performance has been bolstered by the overall growth in the rare earth sector, positioning it favorably for the acquisition [10][12]. - The automotive industry's shift towards comfort, energy efficiency, automation, and intelligence is expected to drive demand for bonded neodymium iron boron magnets, which Galaxy Magnetics produces [4][12].