Investment Rating - The report assigns an "Accumulate" rating for *ST Weir (002058) [5] Core Views - *ST Weir is undergoing a strategic transformation by acquiring a 51% stake in Zijiang New Materials for 546 million yuan, aiming to enter the high-growth lithium battery aluminum-plastic film sector [1][4] - The acquisition is expected to help *ST Weir mitigate its delisting risk and improve profitability by leveraging Zijiang's strong market position and customer relationships [1][4] Summary by Sections 1. Strategic Acquisition - *ST Weir has faced continuous losses in its traditional business and is at risk of delisting, prompting the need for transformation [1][15] - Zijiang New Materials is a leading player in the aluminum-plastic film market, with a 22.2% market share in China and a 14.6% global share, making it a suitable target for *ST Weir's strategic shift [1][17] - The acquisition plan is designed to ensure "shell protection and risk control," with clear key milestones and manageable funding [1][22] 2. Market Transformation Driven by Solid-State Batteries - The demand for aluminum-plastic films is expected to rise significantly due to the increasing adoption of solid-state batteries, which require enhanced film performance [2][24] - The global aluminum-plastic film market is projected to reach 1.39 billion square meters by 2030, with a market size of 16.07 billion yuan [2][30] 3. Zijiang New Materials' Competitive Edge - Zijiang is expected to achieve over 50 million square meters in shipments in 2024, with a year-on-year growth of 26% and a capacity utilization rate of 50.6% [3][44] - The company has made significant technological advancements, including patents for high-temperature resistant materials and innovative packaging structures, positioning it as a leader in the industry [3][21] - Zijiang's strong customer base includes major players like BYD and ATL, and it is actively expanding into overseas markets [3][20] 4. Profitability Forecast - The report forecasts *ST Weir's revenue to grow significantly post-acquisition, with projected revenues of 884.49 million yuan in 2025, reflecting a year-on-year increase of 444% [4][46] - The expected net profit for 2025 is projected at 227.52 million yuan, marking a substantial turnaround from previous losses [4][46]

Group 1: Market Demand and Business Strategy - Domestic downstream capital expenditure is under pressure, but there are structural opportunities in certain high-end sectors [1] - The company is focusing on high-end product replacement and expanding non-US international business [1] - The company avoids price wars and maintains a high-end strategy to differentiate through product performance and technology [3] Group 2: Product and Export Performance - High-margin products include fully automatic pressure products, which outperform traditional manual solutions [4] - The company has shifted non-US international business to a Singapore operation center due to US tariff impacts, with the US market accounting for approximately 54% of international business [6] - The company aims for a revenue target of 650 million yuan for 2025, with profit gradually recovering despite pressures from rising labor costs and low-margin products [9] Group 3: Market Share and Competition - The company is focused on quality growth rather than price competition, aiming to increase market share through regional and industry management [7][8] - The company is exploring mergers and acquisitions in the instrument and related fields, although current valuations are a challenge [10] Group 4: Sensor Production and Development - The company currently produces about 10,000 high-end sensors annually, with plans to increase self-sufficiency in the future [11] - The company is working on domestic chip production, targeting full supply chain localization within 3 to 5 years [14] - The pressure transmitter product is in the sample stage, targeting high-end process industries, with a launch expected by the end of 2026 [14]

Group 1 - *ST Weir plans to acquire 51% of Zijiang New Materials for 546 million yuan, entering the lithium battery materials sector [1][2] - The actual controllers of *ST Weir, Zijiang Enterprises, and Zijiang New Materials are the same, raising concerns about governance [1][2] - Zijiang New Materials has faced fundamental issues, including product singularity and declining profitability, leading to a failed IPO attempt [4][5] Group 2 - Zijiang New Materials' main product is aluminum-plastic composite film for soft-pack lithium batteries, used in various applications [3] - The company has shown a decline in R&D spending and has several financial irregularities, raising regulatory concerns [4] - Financial projections indicate a significant drop in net profit from 119 million yuan in 2022 to 54 million yuan in 2024, with a continuous decline in gross margin [5][7] Group 3 - *ST Weir is on the brink of delisting due to poor performance and new delisting regulations, with a net profit of -17.06 million yuan in 2023 [9][11] - The acquisition is seen as a maneuver to save *ST Weir from delisting, with asset transfers orchestrated by the controller [12][14] - Different shareholder responses to the acquisition highlight market skepticism, with Ningde New Energy opting to exit while BYD remains invested [13]

Group 1: Sensor Development and Production - The company plans to fully implement and validate the specifications and models of its sensors by 2025, gradually introducing them into production [1] - The focus for the vertical integration project is on expanding the market for digital pressure sensors in meteorology, marine, and civil aviation sectors, while simultaneously designing pressure transmitters [1] Group 2: Financial Performance - The company's current operational status is normal, with specific operational data to be confirmed in the first quarter report [2]