Core Viewpoint - Shaoyang Hydraulic plans to acquire all or part of the shares of Chongqing Xincheng Hangrui Technology Co., Ltd., which is expected to constitute a major asset restructuring [2][3] Group 1: Acquisition Details - The acquisition target, Xincheng Hangrui, was previously planning for an IPO and has strong comprehensive capabilities [2][3] - Shaoyang Hydraulic's stock will be suspended from trading starting June 23, with a maximum suspension period of 10 trading days [3] - Xincheng Hangrui specializes in manufacturing high-end forged components, serving high-tech sectors such as aerospace, shipping, and energy [3][4] Group 2: Financial Background - Shaoyang Hydraulic terminated its planned fundraising of up to 150 million yuan for 2024, citing market conditions and company performance [6] - The company has experienced a significant decline in profits, with net profit dropping nearly 90% to 6.578 million yuan in 2023 [6][7] - Despite a revenue increase of 27.33% in 2024, net profit decreased by 2.76%, indicating a trend of increasing costs and financial pressure [6][7] Group 3: Strategic Implications - The acquisition may allow Shaoyang Hydraulic to expand its business and enhance profitability, especially given its recent financial struggles [7] - Xincheng Hangrui has received investments from notable institutions and has completed three rounds of financing, indicating strong backing [4][5] - The decision to pursue acquisition over independent IPO suggests a strategic shift for Xincheng Hangrui, aiming for integration into a larger entity [5]

Core Viewpoint - Shaoyang Hydraulic plans to acquire all or part of Chongqing Xincheng Hangrui Technology Co., Ltd. through a combination of share issuance and cash payment, which is expected to constitute a major asset restructuring [1][3]. Group 1: Transaction Details - The transaction is anticipated to be a significant asset restructuring, with the company expected to disclose the transaction plan within 10 trading days, no later than July 7 [3]. - If the board meeting to review and disclose the transaction plan is not held within the specified timeframe, Shaoyang Hydraulic will resume trading on July 7 and will not plan any major asset restructuring for at least one month [3]. Group 2: Target Company Overview - The target company, Xincheng Hangrui, was established in 2004 and has over 500 employees, including a technical team of more than 70 members. It is recognized as a high-tech enterprise and a national-level specialized and innovative small giant [5]. - Xincheng Hangrui has two production bases in Chongqing and Zunyi, specializing in high-end forged components for the aerospace, shipping, and energy sectors, with capabilities in free forging, die forging, precision casting, and heat treatment [5]. - The company’s product range includes various materials such as stainless steel, heat-resistant steel, aluminum alloy, high-temperature alloy, and titanium alloy. It had previously signed an IPO guidance agreement with a brokerage firm, intending to apply for an initial public offering by the end of 2023 [5]. Group 3: Shaoyang Hydraulic's Financial Performance - Shaoyang Hydraulic has experienced a continuous decline in performance over the past four years, necessitating new growth points. The net profits for 2023 and 2024 are projected to be 6.5784 million yuan and 6.3966 million yuan, respectively, reflecting year-on-year declines of 86.88% and 2.76% [8]. - In the first quarter of this year, the company reported an operating income of 61.0838 million yuan, a year-on-year increase of 3.31%, while the net profit attributable to the parent company was 811,300 yuan, down 49.45% year-on-year [9]. Group 4: Stock Performance - Prior to the announcement, Shaoyang Hydraulic's stock price was suspended from trading at 31.9 yuan per share, with a total market capitalization of 3.488 billion yuan. Earlier in January, the stock price had dropped to 13.38 yuan per share, but it subsequently surged, reaching a historical high of 38.78 yuan per share [12][13]. - The stock price increased by 2.89 times from its low to its high within the year, but later faced a decline of over 43% due to external factors, before rebounding again [13]. - The market's response to the acquisition and its potential as a new profit growth point for Shaoyang Hydraulic will be observed after the resumption of trading [15].