Core Viewpoint - Zhejiang Longsheng (600352.SH) announced the acquisition of a 37.57% stake in Desida Global Holdings (Singapore) from KIRI Company for approximately $69.65 million, aiming to make Desida a wholly-owned subsidiary and resolve ongoing litigation with KIRI [1][2]. Group 1: Transaction Details - The acquisition involves purchasing KIRI's 37.57% stake in Desida, which has a clear ownership structure and is not subject to any legal restrictions or encumbrances [2]. - Desida's total issued and paid-up capital is SGD 69.83 million, with Longsheng holding 62.43% of the shares and KIRI holding 37.57% [2]. - The valuation of Desida is estimated between $1.178 billion and $1.288 billion, based on an EV/EBITDA multiple of 8.6 and projected EBITDA of $138 million for 2024 [2]. Group 2: Strategic Implications - This acquisition aligns with the company's strategic goal of becoming a leading global specialty chemicals producer, which is expected to enhance profitability once Desida becomes a wholly-owned subsidiary [3]. - The funding for this transaction will come from the company's own funds and bank loans, leading to a slight increase in overall debt levels [3]. Group 3: Financial Performance - For the fiscal year 2024, Zhejiang Longsheng reported total revenue of CNY 15.88 billion, a year-on-year increase of 3.79%, and a net profit attributable to shareholders of CNY 2.03 billion, up 32.36% [4][6]. - In the first quarter of 2025, the company experienced a revenue decline of 7.21% to CNY 3.24 billion, while net profit surged by 100.44% to CNY 396 million [6][7].

Group 1 - The annual general meeting of Zhejiang Longsheng Group Co., Ltd. was held on May 30, 2025, with no resolutions rejected [2] - The meeting was presided over by Chairman Ruan Weixiang, and all procedures complied with the Company Law and Articles of Association [2][3] - All proposals presented at the meeting, including the 2024 annual financial report and profit distribution plan, were approved [4][5][6] Group 2 - The company signed a share purchase agreement to acquire 37.57% of the issued share capital of DyStar Global Holdings (Singapore) Ltd. from KIRI Industries Limited for USD 69,654.78 thousand [21][23] - The transaction is not classified as a related party transaction or a major asset restructuring and falls within the board's authority [22] - The acquisition aims to resolve ongoing litigation and make DyStar a wholly-owned subsidiary, enhancing the company's profitability [23][34] Group 3 - The financial evaluation of DyStar estimated its enterprise value between USD 1.178 billion and USD 1.288 billion, with a projected value of 100% shares between USD 1.791 billion and USD 1.901 billion [26][27] - The purchase price was determined based on fair negotiations and market valuation methods, including EBITDA multiples [26] - The acquisition is expected to increase the company's liabilities but is aligned with its strategic goal of becoming a leading specialty chemicals producer [34]

Core Viewpoint - Zhejiang Longsheng Group Co., Ltd. has signed a share purchase agreement to acquire 37.57% of the issued share capital of DyStar Global Holdings (Singapore) Ltd. from KIRI Industries Limited, aiming to make DyStar a wholly-owned subsidiary and resolve ongoing litigation with KIRI [1][3]. Transaction Overview - The transaction involves the purchase of 37.57% of DyStar's shares for a total consideration of approximately USD 69.65 million, which may be adjusted on the delivery date [2][3]. - The transaction does not constitute a major asset restructuring and is within the board's authority, thus not requiring shareholder approval [2][3]. Reason for Transaction - The acquisition is prompted by a ruling from the Singapore International Commercial Court regarding the overall sale of DyStar shares, with the company seeking to eliminate litigation risks and prevent the complete sale of DyStar [3]. Counterparty Information - KIRI Industries Limited is an Indian company established in 1998, primarily engaged in the production and trade of dyes and chemical products [3][4]. Target Asset Information - DyStar is a Singapore-registered company specializing in manufacturing and selling textile dyes and chemical products, with a total issued capital of SGD 69.83 million [5][6]. - As of the first quarter of 2025, DyStar reported total assets of USD 128.45 million, total liabilities of USD 24.40 million, and a net profit of USD 2.35 million [6]. Valuation and Pricing - The pricing of the transaction was determined through negotiations and reference to DyStar's EBITDA multiples, with an estimated enterprise value of DyStar ranging from USD 1.178 billion to USD 1.288 billion [7][8]. - The estimated value of 100% of DyStar's shares is between USD 1.791 billion and USD 1.901 billion, considering its cash and cash-like assets [7][8]. Impact on the Company - Upon completion of the transaction, DyStar will become a wholly-owned subsidiary, which is expected to enhance the company's profitability [12]. - The acquisition will increase the company's liabilities due to the funding structure involving self-owned funds and bank loans, but the overall debt ratio is not expected to rise significantly [12].