Core Viewpoint - The article discusses the acquisition of Jiangsu Changling Hydraulic Co., Ltd. by He Xin Ting Tao and Cheng Lian Shuang Ying, highlighting the strategic implications for the company and the hydraulic industry as a whole [1][2]. Company Overview - Jiangsu Changling Hydraulic Co., Ltd. was established in December 2006 and listed on the Shanghai Stock Exchange in March 2021, with stock code 605389. The company specializes in hydraulic components, precision castings, and reduction gears, serving various industries including construction machinery, energy extraction, and automotive manufacturing [2]. - The company is recognized as a national-level specialized and innovative "little giant" enterprise and has multiple production and R&D bases. It holds over a hundred effective patents and has developed several proprietary products [2]. Acquisition Details - He Xin Ting Tao and Cheng Lian Shuang Ying plan to acquire a total of 43,211,714 shares of Changling Hydraulic, representing 29.99% of the company's total shares. Additionally, a public tender offer for 17,290,448 shares (12.00% of total shares) will be made at a price of 36.24 yuan per share, with total funding not exceeding 626,605,835.52 yuan [1]. - Upon completion of the acquisition, the acquirers and their concerted parties will hold up to 60,502,162 shares, accounting for 41.99% of the total shares, leading to a change in the actual controller of the company to Hu Kangqiao [1]. Industry Context - The hydraulic industry is experiencing a potential recovery, with signs of improvement in the construction machinery sector. The article notes a significant increase in excavator exports, which rose over 70% this year, despite a 13-month decline in domestic sales [3]. - The industry is transitioning to the "National IV" emission standards starting December 1, indicating regulatory changes that may impact production and sales dynamics [3]. Market Dynamics - The article highlights a positive outlook for the engineering machinery industry, with improved operating rates in February and expectations of a "warm" market environment. The increase in credit in January also suggests a potential recovery in domestic demand [6]. - Major players in the industry, such as Caterpillar, are approaching cyclical turning points, which may influence market sentiment and investment strategies [3].

Core Viewpoint - The actual controllers of Changling Hydraulic, Xia Jifa and Xia Zemin, are planning to transfer the company's control for the second time within six months due to poor business performance and declining profits [1][4][6]. Group 1: Control Transfer Plans - On July 3, Changling Hydraulic announced that its actual controllers are planning a significant matter that may lead to a change in control, resulting in a stock suspension starting July 4 [2][3]. - This is the second time this year that the company has planned a control transfer, with the first attempt in January ending in failure due to disagreements on core terms with the potential buyer [4][5]. - If the current control transfer is completed, it is expected that nearly 30% of the shares will be transferred, potentially allowing the controllers to cash out approximately 1.6 billion yuan based on the last trading price of 38.21 yuan per share [5]. Group 2: Business Performance - Since its listing in 2021, Changling Hydraulic has experienced a decline in both revenue and net profit, with net profit decreasing for four consecutive years from 2021 to 2024 [6][7]. - The company's revenue figures from 2021 to 2024 show slight fluctuations, with net profits dropping significantly: 2.02 billion yuan in 2021 to 0.95 billion yuan in 2024, reflecting a decline of 14.56% to 6.84% year-on-year [7]. - In the first quarter of 2023, the company reported a revenue of 2.19 billion yuan and a net profit of 0.31 billion yuan, both showing year-on-year declines [7]. Group 3: Acquisition Attempts - In 2023, Changling Hydraulic attempted to diversify into the photovoltaic sector by acquiring a 70% stake in Jiangyin Shangchi Machinery for 336 million yuan, but the acquisition has not yielded significant results [8][9]. - The acquired company, Jiangyin Shangchi, had previously achieved notable revenue and profit figures, but Changling Hydraulic's performance post-acquisition has been disappointing, with the acquired entity failing to meet its profit commitments in 2024 [10]. Group 4: Financial Health - The company's accounts receivable have increased, reaching 409 million yuan by the end of the first quarter of this year, a year-on-year increase of 22.09%, while revenue has been declining [11].

Core Viewpoint - The company, Changling Hydraulic, is undergoing a potential change in control, leading to a suspension of its stock trading for an estimated period of no more than three trading days [2]. Group 1: Stock Suspension and Control Change - Changling Hydraulic announced that its stock will continue to be suspended from trading starting July 8, due to ongoing discussions regarding a significant matter that may result in a change of control [2]. - The company's major shareholders, Xia Jifa and Xia Zemin, are currently negotiating key terms of the transaction with the involved parties, which requires internal approval processes [2]. Group 2: Historical Context and Previous Suspensions - The company was listed on the Shanghai Stock Exchange on March 22, 2021, with a three-year lock-up period for its controlling shareholders, which will expire on March 22, 2024 [3]. - In January 2023, the company also suspended trading due to a similar situation regarding a potential change in control, which was later terminated due to disagreements on core terms with the transaction party [3]. Group 3: Financial Performance - For the year 2024, Changling Hydraulic reported a revenue of 883 million yuan, representing a year-on-year increase of 9.75%, while the net profit attributable to shareholders decreased by 6.84% to approximately 94.73 million yuan [4]. - This marks the fourth consecutive year of declining net profit since the company went public, contrasting with a steady increase in net profit from 2017 to 2020 [4].

Core Viewpoint - The actual controller of Changling Hydraulic is planning a significant matter that may lead to a change in the company's control [2] Group 1: Stock Suspension - Changling Hydraulic's stock (code: 605389) will be suspended from trading starting July 4, 2025, due to ongoing negotiations regarding a potential change in control [3] - The suspension is expected to last no more than two trading days to prevent abnormal fluctuations in the stock price [3] Group 2: Shareholding Structure - As of the end of Q1 this year, the major shareholders include Xia Jifa with 58.8 million shares (40.81% of total shares) and Xia Zemin with 39.2 million shares (27.21% of total shares) [3][4] - The total shareholding of the top five shareholders accounts for 77.75% of the total share capital, with a combined market value of approximately 33.84 billion yuan [4] Group 3: Business Overview - Changling Hydraulic operates in the hydraulic, casting, and photovoltaic industries, producing products such as hydraulic central swivel joints, tension devices, and precision castings [4] - The company completed the acquisition of Jiangyin Shangchi in 2023, entering the photovoltaic sector, which is expected to enhance its product offerings [5] Group 4: Financial Performance - In Q1 2025, Changling Hydraulic reported total revenue of 2.19 billion yuan, a year-on-year decrease of 2.64% [6] - The net profit attributable to the parent company was 310 million yuan, reflecting a year-on-year decline of 19.06% [6] - The company has a significant amount of accounts receivable, totaling 409 million yuan [5]

Core Viewpoint - The actual controller of Changling Hydraulic is planning a significant matter that may lead to a change in the company's control [2] Group 1: Stock Suspension - Changling Hydraulic's stock will be suspended from trading starting July 4, 2025, due to ongoing negotiations regarding the potential change in control [3] - The suspension is expected to last no more than two trading days to prevent abnormal fluctuations in the stock price [3] Group 2: Shareholding Structure - As of the end of Q1 this year, Xia Jifa holds 58.8 million shares, accounting for 40.81% of the total share capital, while Xia Zemin holds 39.2 million shares, accounting for 27.21% [4] - The total shareholding of the main shareholders and their concerted actions amounts to 112.01 million shares, representing 77.75% of the total share capital [5] Group 3: Business Overview - Changling Hydraulic operates in the hydraulic, casting, and photovoltaic industries, with products including hydraulic central swivel joints, tensioning devices, and precision castings [5] - The company completed the acquisition of Jiangyin Shangchi in 2023, entering the photovoltaic sector, which is expected to enhance its product offerings [6] Group 4: Financial Performance - In 2024, Changling Hydraulic's net profit attributable to the parent company decreased by 6.84%, despite an increase in revenue [6] - For Q1 this year, both revenue and net profit showed a year-on-year decline, with accounts receivable reaching 409 million yuan [6] - The total revenue for Q1 was 2.19 billion yuan, with a year-on-year change of 0%, while the net profit was 310 million yuan, down 19.06% year-on-year [7]