Core Viewpoint - Cixing Co., Ltd. plans to diversify into the defense technology sector through a restructuring deal to acquire a 75% stake in Shenyang Shunyi Technology Co., Ltd. [2][3] Group 1: Restructuring Details - The restructuring involves issuing shares and cash payments to ten parties, including Li Yingshun and China National Defense Technology, with cash not exceeding 40% of the total transaction price [2] - The audit and evaluation of the target company are still ongoing, and the transaction price has not yet been determined [2] Group 2: Strategic Importance - This move is seen as a significant step for Cixing to enter the defense technology industry, aiming to create a second growth curve and enhance its core competitiveness [3] - Cixing, as a leading company in the domestic computerized flat knitting machine industry, seeks to mitigate cyclical performance fluctuations and overcome industry development bottlenecks [2][3] Group 3: Financial Performance of Shunyi Technology - Shunyi Technology has eight core technologies and holds 40 invention patents, including seven related to national defense [3] - Projected revenues for Shunyi Technology are 284 million yuan in 2023, 225 million yuan in 2024, and 2.84 million yuan in Q1 2025, with net profits of 27.72 million yuan, 54.88 million yuan, and a loss of 1.18 million yuan respectively [3] Group 4: Cixing's Financial Performance - In 2024, Cixing achieved revenues of 2.218 billion yuan, a year-on-year increase of 9.16%, and a net profit of 284 million yuan, up 148.82% [4] - The company sold 36,838 knitting machines in 2024, a 26.41% increase, capturing approximately 28% of the market share [4] - Cixing's knitting machine business generated 1.934 billion yuan in revenue, with a gross margin of 32.51%, reflecting a year-on-year increase of 1.92 percentage points [4]