Core Viewpoint - Zhejiang Securities acts as an independent financial advisor for the major asset sale of Green Kang Biochemical Co., Ltd, responding to inquiries from the Shenzhen Stock Exchange regarding the transaction's details and implications [1]. Group 1: Transaction Overview - Green Kang Biochemical plans to sell 100% equity of three subsidiaries, including Green Kang (Yushan) Film Materials Co., Ltd, Green Kang (Haining) Film Materials Co., Ltd, and Green Kang New Energy (Shanghai) Import and Export Trade Co., Ltd, to Jiangxi Raoxin New Energy Materials Co., Ltd for a cash price of 0 yuan [1]. - As of December 31, 2024, the total book value of the three subsidiaries is -100.05 million yuan, with an assessed value of -18.74 million yuan, resulting in an appreciation rate of 81.27% [1]. Group 2: Financial Analysis - The subsidiaries are experiencing negative gross margins due to changes in supply and demand in the photovoltaic industry, leading to indications of long-term asset impairment [2]. - Revenue forecasts for Green Kang Yushan were adjusted from an original projection of 276.93 million yuan in 2025 to 819.99 million yuan due to declining product prices and insufficient financial support [2]. - The assessment method for Green Kang Haining and Green Kang New Energy was based solely on the asset-based approach due to their operational status, aligning with industry practices [2]. Group 3: Historical Context - In January 2023, Green Kang Biochemical acquired 100% equity of Green Kang Yushan amid a booming photovoltaic industry, establishing a dual business model of veterinary products and photovoltaic film products [3]. - Subsequent capital increases of 70 million yuan in June 2023 and 150 million yuan in December 2024 were aimed at supporting operational needs and improving financial conditions [3]. - The verification by Zhejiang Securities supports the rationality and compliance of the major asset sale, safeguarding the interests of the listed company and minority shareholders [3].

Investment Rating - The report maintains a "Cautious Recommendation" rating for the company [4][7]. Core Insights - The company's revenue for 2024 reached 1.335 billion yuan, a year-on-year increase of 106.0%, with a net profit attributable to shareholders of 189 million yuan, up 14.3% year-on-year [1]. - The copper foil business is identified as the core driver of revenue growth, with significant contributions from the electrolytic copper foil segment, which saw a revenue increase of 1477.1% in 2024 [2]. - The company has successfully developed high-value-added high-end copper foil products, including high-temperature extended copper foil and low-profile copper foil, which are expected to drive future growth [4]. Revenue Breakdown - In 2024, the revenue breakdown is as follows: - Electrolytic copper foil: 683 million yuan, accounting for 51.2% of total revenue - Electric and steam: 304 million yuan, 22.8% of total revenue - Veterinary medicine products: 292 million yuan, 21.9% of total revenue - Pesticide products: 21 million yuan, 1.6% of total revenue [2]. Profitability and Cost Management - The company has effectively managed costs, with a sales expense ratio of 1.65% and a management expense ratio of 5.77% in 2024, both showing a decrease compared to the previous year [3]. - The gross margin for the electrolytic copper foil business was -5.35% in 2024, but it is expected to recover in the future as industry processing fees stabilize [3]. Future Outlook - The company is focusing on "import substitution and high-end iteration" in its copper foil business, with plans to expand production capacity based on market demand [4]. - Future profit projections estimate net profits of 279 million yuan in 2025, 356 million yuan in 2026, and 446 million yuan in 2027, with corresponding PE ratios of 31, 24, and 19 [4][6].