Core Viewpoint - Hailianxun (300277.SZ) is undergoing a significant transformation through a rare "A-share acquisition of B-share" deal by merging with Hangqilun B (200771.SZ), which has a much stronger financial performance and assets [3][4][9]. Group 1: Transaction Details - Hailianxun plans to issue 1.175 billion shares at a swap price of 9.56 CNY per share to acquire all assets and liabilities of Hangqilun B, with a total transaction value of approximately 11.233 billion CNY [3][4][8]. - The merger will allow Hailianxun to inherit Hangqilun B's assets, liabilities, business, personnel, contracts, and other rights and obligations, while Hangqilun B will cease to exist as a listed entity [4][5]. - The Zhejiang Provincial State-owned Assets Supervision and Administration Commission has approved the overall plan for this transaction [4]. Group 2: Financial Performance - Hailianxun has reported a cumulative net profit of only 155 million CNY over 15 years, indicating poor operational results [2][9]. - In contrast, Hangqilun B has achieved a cumulative net profit of 9.191 billion CNY since its listing, with a significant increase in revenue from 4.762 billion CNY in 2020 to 6.639 billion CNY in 2024 [11]. - Hailianxun's total assets were only 676 million CNY as of the end of Q1 this year, while Hangqilun B's total assets stood at 17.381 billion CNY [3][10]. Group 3: Market Implications - The merger is expected to enhance the profitability of the combined entity, as Hangqilun B's stronger financials will support Hailianxun's struggling operations [3][11]. - Post-merger, Hailianxun will have a dual business model focusing on industrial turbine machinery and power information systems, potentially broadening its financing channels [11]. - However, Hangqilun B has experienced a decline in gross profit margin from 31.72% in 2020 to 19.36% in 2024, raising concerns about future profitability [12]. Group 4: Research and Development Concerns - Hangqilun B's R&D investment has decreased from 350 million CNY in 2021 and 2023 to 260 million CNY in 2024, which may impact its long-term growth prospects [12][13].

Core Viewpoint - Hangzhou Steam Turbine Co., Ltd. (Hangzhou Turbine B) is progressing towards a share swap merger with Hailianxun Technology Co., Ltd. to transition from B-share to A-share, aiming to enhance financing channels and improve company valuation and liquidity [2][4][5]. Group 1: Merger Details - The temporary shareholders' meeting of Hangzhou Turbine B approved the merger proposal, where Hailianxun will absorb Hangzhou Turbine B, leading to the termination of Hangzhou Turbine B's listing and legal status [2]. - The share swap price for Hangzhou Turbine B is set at 9.56 CNY per share, reflecting a 34.46% premium over the average trading price of 7.11 CNY in the previous 20 trading days [4]. - The total share capital of Hangzhou Turbine B is 1.175 billion shares, with a swap ratio of 1:1 for shares exchanged with Hailianxun [4]. Group 2: Business Context - Hangzhou Turbine B specializes in designing and manufacturing industrial steam turbines and gas turbines, along with providing related services [4]. - The company has faced limitations in financing due to the constraints of the B-share market, which has affected its liquidity and valuation compared to A-share peers [4][5]. Group 3: Financial Performance - Hangzhou Turbine B's revenue has shown continuous growth over the past three years, reaching 5.519 billion CNY in 2022, 5.924 billion CNY in 2023, and projected at 6.639 billion CNY in 2024 [7]. - However, the company's net profit attributable to shareholders has fluctuated, with a decline noted in 2023 [7]. - The gross profit margin of the main business has been declining, with figures of 26.58%, 23.89%, and 19.21% from 2022 to 2024, respectively [7][8].