Core Viewpoint - Meihua Biotech has successfully completed the acquisition of the amino acid business and assets from Concord Fermentation, enhancing its product and business structure in the synthetic biology sector [1]. Group 1: Acquisition Details - The acquisition was finalized on July 1, 2025, with a transaction price of approximately 16.8 billion Japanese yen, equivalent to about 833 million RMB [1]. - The final transaction price was adjusted based on the cash reserves and working capital of the target assets at the time of closing, which included an estimated cash amount of 11.3 billion Japanese yen (approximately 560 million RMB) [1]. - Concord Fermentation is recognized as a leader in biotechnology and fermentation, focusing on high-quality amino acids and other synthetic biology products [1]. Group 2: Business Expansion - The acquisition allows Meihua Biotech to diversify its product offerings by adding various new amino acid products and strains, enhancing its fermentation and refinement capabilities for high-value pharmaceutical amino acids [1]. - The company will also gain production capabilities and intellectual property for three types of Human Milk Oligosaccharides (HMO) through the integration of a precision fermentation platform [1]. - The acquisition supports the company's strategy to expand its industrial footprint internationally by acquiring multiple domestic and foreign operational entities [1]. Group 3: Financial Performance - In Q1 2025, the feed amino acid segment generated revenue of 2.939 billion RMB, accounting for approximately 46.9% of total revenue, marking a year-on-year increase of 6.68% [2]. - The growth in this segment is attributed to the rise in both volume and price of lysine, as well as increased sales of threonine, positioning it as a potential new growth driver for the company [2].

Core Viewpoint - Meihua Biotechnology is advancing steadily in the synthetic biology sector through diversified expansion and deepening development, highlighted by its recent acquisition of assets from Kyowa Hakko Bio, which will enhance its amino acid product lines and operational capabilities [1][2]. Group 1: Acquisition Details - The acquisition agreement between Meihua Biotechnology and Kyowa Hakko Bio is set to be completed by July 1, 2025, with a final transaction value of approximately 16.8 billion yen, equivalent to about 833 million yuan [1]. - The cash reserves of the target assets are estimated at around 11.3 billion yen, or approximately 560 million yuan, as of June 30, 2025 [1]. Group 2: Product and Market Expansion - Post-acquisition, the company will introduce various new amino acids and fermentation strains, including arginine, histidine, serine, citrulline, ornithine, and hydroxyproline, along with patents related to these amino acids [2]. - The transaction will enable the company to extend its industrial chain, enhancing its fermentation and refinement capabilities for high-value pharmaceutical-grade amino acids [2]. Group 3: Strategic Positioning - Meihua Biotechnology aims to implement its overseas development strategy through this acquisition, gaining multiple domestic and international production entities [2]. - The company will also acquire the ability to produce three types of HMO products through a precision fermentation platform, along with the associated intellectual property rights [2]. Group 4: Industry Background - Kyowa Hakko Bio has a long-standing reputation in the global synthetic biology field, with over 70 years of technological expertise and numerous patents in amino acid and HMO product development [3]. - The company has successfully commercialized various amino acids and HMO products, including 2'-fucosyllactose, 3'-sialyllactose, and 6'-sialyllactose [3]. Group 5: Financial Performance - Meihua Biotechnology reported a revenue of 25.069 billion yuan and a net profit of 2.74 billion yuan for 2024, with a significant year-on-year growth of 35.52% in net profit for the first quarter of 2025 [3].

Core Insights - The acquisition of assets from Kiri Holdings by Meihua Biological has been successfully completed, with a final transaction price of approximately 16.8 billion yen, equivalent to about 833 million yuan [1] - The acquisition will enhance Meihua Biological's business structure, product offerings, and industry layout, particularly in the high-value-added pharmaceutical amino acid sector [2] Group 1: Acquisition Details - The acquisition includes food amino acids, pharmaceutical amino acids, and human milk oligosaccharides (HMO) business and assets [1] - The final transaction price was adjusted based on the cash reserves and working capital of the acquired assets, with an estimated cash reserve of about 11.3 billion yen, or approximately 560 million yuan [1] Group 2: Business Expansion - Post-acquisition, Meihua Biological will gain access to various new amino acid strains and patents, enhancing its fermentation and refinement capabilities [2] - The company will also introduce production capabilities for three types of HMO products and strengthen its intellectual property system [2] Group 3: Financial Performance - In Q1 2025, the feed amino acid segment generated revenue of 2.939 billion yuan, accounting for approximately 46.9% of total revenue, marking a year-on-year increase of 6.68% [2] - The segment is expected to become a new growth driver for the company, following its transformation from a "monosodium glutamate king" to a "synthetic biology giant" [2] Group 4: Market Outlook - Institutional investors maintain a positive outlook on Meihua Biological, with projected net profit for 2024 at 2.740 billion yuan, a year-on-year decrease of 13.85% [3] - However, Q1 2025 net profit reached 1.019 billion yuan, reflecting a year-on-year increase of 35.52% and a quarter-on-quarter growth of 36.72%, indicating robust performance and future growth potential [3]