Core Viewpoint - The leading company in the maternal and infant industry, Kidswant, is facing challenges due to changes in birth rates and competition between e-commerce and physical stores, prompting frequent acquisitions to strengthen its market position [1]. Acquisition Details - Kidswant plans to acquire a 65% stake in Jiangsu Xingsiyu Investment Management Co., Ltd. from its related party, Wuxing Holdings Group Co., Ltd. [1][4] - The acquisition will occur in two steps: first, acquiring the stake in Jiangsu Xingsiyu, and then using Jiangsu Xingsiyu to cash purchase 100% of Zhuhai Siyu Industrial Development Co., Ltd. for 1.65 billion yuan [1][4][7]. - After the completion of the stake transfer, Jiangsu Xingsiyu will become a subsidiary of Kidswant [2][6]. Financial Performance of Siyu Industrial - Siyu Industrial, established in July 2014, focuses on hair health care and operates under the brand "Siyu Hair Care," with 2,503 stores and over 2 million members as of the end of 2024 [8]. - The company reported revenues of 623 million yuan in 2022, 689 million yuan in 2023, and 723 million yuan in 2024, with net profits of 158 million yuan, 186 million yuan, and 183 million yuan respectively [9][12]. Valuation and Financial Implications - The valuation of Siyu Industrial was assessed using the income approach, with a total equity value of 1.75 billion yuan, reflecting a significant increase of 583.35% compared to the book value [10]. - The acquisition price of 1.65 billion yuan is below the assessed value, indicating a reasonable valuation with a price-to-earnings ratio of approximately 9 times based on Siyu Industrial's 2024 net profit [10][12]. Strategic Direction - Kidswant's acquisition of Siyu Industrial represents a cross-industry acquisition, aligning with its "three expansions strategy" to diversify its business beyond maternal and infant retail [13][14]. - The company has previously acquired the remaining 35% stake in Leyou International and 60% of Xingyan Biotechnology, further solidifying its market position [14]. Changes in Fund Utilization - Following the acquisition, Kidswant has altered the use of its fundraising, reallocating 429 million yuan from store upgrade projects to fund the acquisition of Siyu Industrial [17][18].

Group 1: Industry Overview - The hair care industry in China has evolved into a separate market from traditional hairdressing services since 2000, with companies like Si Yu Hair Care and Zhang Guang 101 leading the way [1][5] - The market size of hair care services in China has grown from 432.3 billion yuan in 2020 to 570.9 billion yuan in 2023, with a compound annual growth rate (CAGR) of 9.7% [5] - It is projected that the market will reach 812.5 billion yuan by 2028, indicating significant growth potential with a CAGR of 7.3% from 2023 to 2028 [5] Group 2: Company Profile - Si Yu Hair Care, founded in 2003, has expanded rapidly, with over 2,500 stores and more than 2 million members as of the end of 2024 [3][4] - The company's revenue for 2024 is estimated at 7.23 billion yuan, with a net profit of 1.83 billion yuan [3] - In Q1 2025, Si Yu Hair Care reported a revenue of 1.44 billion yuan and a net profit of 26.61 million yuan [4] Group 3: Consumer Trends - The consumer demographic for hair care services has shifted towards younger generations, particularly those born in the 1980s and 1990s, who now represent the majority of the market [5][6] - The primary motivations for these younger consumers include addressing hair loss, scalp issues, and damage from hair treatments, with a strong focus on the quality of products used in services [6] Group 4: Business Model and Challenges - Si Yu Hair Care operates primarily through a franchise model, with only 176 of its 2,503 stores being company-owned, which presents challenges in management and quality control [7] - The rapid expansion of franchise-based brands has led to operational difficulties, with some brands facing closures and financial issues, highlighting the risks associated with this business model [7] - The entry of publicly listed companies into the hair care sector may provide credibility and reduce risks for brands like Si Yu Hair Care [7]