Core Viewpoint - The transaction involving Lingyi Zhi Manufacturing's acquisition of a 66.46% stake in Jiangsu Kedas from multiple parties through convertible bonds and cash payment is aimed at entering the automotive parts industry, which is seen as a high-potential market [1][4]. Transaction Details - Lingyi plans to acquire the stake for a total price of 332 million yuan and will raise up to 207 million yuan through a share issuance to specific investors, with 100 million yuan allocated for Jiangsu Kedas' working capital and bank loan repayment [1]. - Jiangsu Kedas specializes in manufacturing automotive interior components, and the acquisition will allow Lingyi to quickly enter this sector [1][4]. Financial Performance and Projections - Jiangsu Kedas is projected to achieve revenues of 899 million yuan in 2024, a year-on-year increase of 10.18%, with a net profit of approximately 40.98 million yuan, reflecting a 61.84% growth [2]. - However, the company's gross margin is expected to decline from 15.39% in 2024 to 14.96% by 2027, which is below the industry average [2]. - The decline in gross margin is attributed to a higher revenue share from lower-margin products and increased competition in the automotive parts industry [2]. Performance Commitments - The transaction includes performance commitments from the sellers, with net profit targets set at no less than 47 million yuan, 56 million yuan, and 65 million yuan for the years 2025, 2026, and 2027, respectively [3]. - In the first half of the current year, Jiangsu Kedas achieved 52.5 million yuan in revenue, which is nearly half of the projected annual revenue [3]. Strategic Rationale - Lingyi views the acquisition as a strategic move to leverage Jiangsu Kedas' established customer relationships in the automotive sector, particularly with domestic brands focusing on new energy vehicles [4][5]. - Jiangsu Kedas has been certified as a first-tier supplier by several major automotive manufacturers, which enhances its market position [5]. Industry Positioning - Lingyi is transitioning from a Tier 2 to a Tier 1 supplier in the automotive industry, which will provide significant advantages in product development and customer engagement [6][7]. - The company aims to capitalize on emerging trends in the new energy vehicle market, focusing on technologies related to battery systems and thermal management [7].

Core Viewpoint - The company Lianyi Intelligent Manufacturing plans to acquire a 66.46% stake in Jiangsu Keda for 332 million yuan, aiming to transition from a Tier 2 to a Tier 1 automotive supplier, enhancing its capabilities in the automotive parts industry [1][2][3]. Group 1: Acquisition Details - Lianyi Intelligent Manufacturing will issue convertible bonds and pay cash to acquire the stake in Jiangsu Keda, which will become a subsidiary post-transaction [1]. - The valuation of Jiangsu Keda's 100% equity is set at 505 million yuan, with the final transaction price for the 66.46% stake being 332 million yuan [1][3]. - The company plans to raise up to 207 million yuan through a stock issuance to support the acquisition [1]. Group 2: Strategic Objectives - The acquisition allows Lianyi Intelligent Manufacturing to quickly enter the automotive decorative parts sector, enhancing its product matrix and customer resources [2][3]. - The company aims to assist Jiangsu Keda in expanding its operations internationally, aligning with the localization strategies of automotive manufacturers [2]. Group 3: Financial Performance and Projections - Jiangsu Keda reported revenues of 815 million yuan and 899 million yuan for the fiscal years 2023 and 2024, respectively, with net profits of approximately 25.32 million yuan and 40.98 million yuan [4]. - The asset appraisal indicates a value increase of 258 million yuan, representing a 104.06% appreciation [3]. - Performance commitments have been established, with expected net profits for Jiangsu Keda set at no less than 47 million yuan, 56 million yuan, and 65 million yuan for the years 2025, 2026, and 2027, respectively [3]. Group 4: Industry Context - The automotive sector is still in a nurturing phase for Lianyi Intelligent Manufacturing, which has historically focused on precision components for Apple [5][6]. - The company is diversifying its revenue streams, with automotive and low-altitude economy businesses generating only 4.79% of total revenue in 2024, indicating significant growth potential [6][7]. - The acquisition of Jiangsu Keda is expected to enhance Lianyi Intelligent Manufacturing's revenue structure and expand its automotive business [7].