Yangtze Business Daily reporter Cai Jia
Through external acquisitions, Wangzi New Materials (002735.SZ) continues to expand its layout in the military industry.
According to the acquisition plan, Wangzi New Materials’ wholly-owned subsidiary China Electric Huarui plans to acquire 51% equity stake through equity transfer and capital increase.
announcement shows that Chengdu Gauss was established in 2019 and its main business includes data link communication terminals, foreign military simulator terminals, etc. A reporter from the Yangtze Business Daily noticed that although the scale of Chengdu Gauss is currently very small, Prince New Materials still gives it a higher valuation.
In this transaction, the appraised value of 100% equity of Chengdu Gauss was RMB 30.6241 million, which is more than 7124% of its net asset value of RMB 423,900.
It is worth noting that Wangzi New Materials, which started with its plastic packaging materials business, has frequently made arrangements in the military industry in recent years, and China Electric Huarui is its core subsidiary in the military industry. In July this year, Wangzi New Materials completed the acquisition of the remaining 49% stake in China Electric Huarui.
However, currently Prince New Materials has developed diversified business, but its profitability has not continued to improve. In the first half of this year, Wangzi New Materials achieved operating income of 829 million yuan, and increased by year-on-year; but the net profit after deducting non-recurring gains and losses was 5.4777 million yuan, a year-on-year decrease of 82.88%. Among them, in the first five months of this year, China Electric Power Huarui achieved operating income of 3.7679 million yuan and net profit of -5.832 million yuan. The net assets of
are only 420,000 yuan. The overall valuation is 30.62 million
. Information shows that the Chengdu Gauss, which Prince New Materials plans to acquire, was established in 2019. Its main business is data link communication terminals, foreign military simulator terminals, high-efficiency RF amplifiers, and embedded AI products. It is a high-tech enterprise integrating design and R&D.
Wangzi New Materials introduced that the target company has a deep technical accumulation in military applications such as anti-interference communication, data link, ad hoc network, digital signal processing, radio frequency amplifier, etc., and is at the leading domestic or advanced global level. It has established long-term and stable technical and product cooperation relationships with many scientific research institutes and technology companies in the military industry in China.
Wangzi New Materials believes that in the field of military application, Chengdu Gauss' strong R&D and design capabilities and high-quality customer resources form a good complement to the company's military technology business. This investment further extends the existing military technology sector business, which is conducive to improving the industrial chain layout in this field, enhancing the voice of the industrial chain, and making the military industry business bigger and stronger.
According to the acquisition plan, China Electric Huarui plans to acquire 9.8% and 6.53% of the equity of Chengdu Gauss held by Zheng Yu and Wang Xiaoxi for RMB 3 million and RMB 2 million respectively. Other shareholders of Chengdu Gauss agreed to waive the right of first refusal. At the same time, China Electric Huarui increased its capital by 21.67 million yuan in Chengdu Gauss, and other shareholders of Chengdu Gauss agreed to give up their right to increase capital in Chengdu Gauss in the same proportion. After the above-mentioned equity transfer and capital increase is completed, China Electric Huarui will hold 51% of the equity of Chengdu Gauss.
, which was still in its early stages of its establishment, has not strong profitability. In 2021 and the first half of 2022, Chengdu Gauss achieved operating income of RMB 2.7313 million and RMB 1.8963 million, and net profit of RMB 583,100 and RMB 17,700 respectively. As of the end of June this year, Chengdu Gauss' total assets of were 5.571 million yuan, total liabilities were 4.1472 million yuan, net assets were 423,900 yuan, and the debt ratio was about 74.44%.
reporter from the Yangtze Business Daily noticed that in this transaction, the parties to the transaction determined that the value of 100% equity of Chengdu Gauss was 30.6241 million yuan, which is more than 7124% compared with its book net assets.
high premium acquisition is accompanied by performance commitments. The parties to the transaction agreed that from October 1, 2022, the turnover of Chengdu Gauss in the three complete years will reach RMB 12 million, RMB 21 million and RMB 27 million respectively, and the net profit will also reach RMB 4 million, RMB 7 million and RMB 9 million respectively, with a total turnover and net profit of RMB 60 million and RMB 20 million respectively.
, and China Electric Huarui increased its capital of 21.67 million yuan to Chengdu Gauss, of which 9.67 million yuan will be paid after the performance commitment assessment in the above three years is completed.
The core military industry subsidiary lost 5.83 million in the first five months
not only this acquisition of Chengdu Gauss, but in recent years, Wangzi New Materials has been expanding its military industry business layout.
reporter from the Yangtze Business Daily noticed that Wangzi New Materials started with its plastic packaging materials business and entered the capital market in 2014. In the early stages of listing, Wangzi New Materials' performance growth was weak, and from 2013 to 2015, the company's net profit fell for three consecutive years.
In 2016, Wangzi New Materials launched a big move, which was to acquire 100% of Feiliu Jiutian's equity for 5 billion yuan and enter the mobile Internet field, but failed. Starting from 2018, Wangzi New Materials acquired 51% equity in Chongqing Fuyida and 85% equity in Dongguan Qunzan, and added lithium battery energy and 3C consumer industries on the basis of expanding the original plastic packaging segment.
In November 2020, Wangzi New Materials implemented another merger and acquisition, acquiring 51% of the equity of China Electric Huarui with its own funds of 150 million yuan. Through this transaction, Wangzi New Materials officially entered the field of military technology.
, driven by the three major industries of packaging, military technology and consumer electronics, Wangzi New Materials' profitability has steadily improved. From 2018 to 2020, Wangzi New Materials achieved operating income of 912 million yuan, 1.326 billion yuan and 1.542 billion yuan, respectively, a year-on-year increase of 52.41%, 45.4% and 16.3%; net profits of 49.7612 million yuan, 55.0556 million yuan, and 86.722 million yuan, a year-on-year increase of 28.77%, 10.64% and 57.52%.
It is worth noting that in order to expand its layout in the military industry, in 2021, Wangzi New Materials acquired Anhejie Testing, expanding the military industry technology industry from R&D and manufacturing to the military product testing field. At the same time, the company also planned to acquire the remaining 49% of China Electric Huarui's equity through issuing shares and paying cash.
However, due to the long promotion time and the market environment has undergone major changes, in July this year, Wangzi New Materials changed to cash and completed the acquisition of the remaining 49% equity of China Electric Huarui for 172 million yuan.
. In the process of promoting the acquisition, China Electric Huarui's performance was lower than expected. At the same time, coupled with factors such as rising raw material prices, Wangzi New Materials' performance has not been good this year.
In 2021, Wangzi New Materials achieved operating income of 1.735 billion yuan, a year-on-year increase of 12.55%; net profit of 84.4298 million yuan, a year-on-year decrease of 2.64%. Among them, China Electric Huarui's net profit attributable to shareholders in 2021 was RMB 25.6692 million, exceeding the current performance commitment of RMB 23 million.
However, in the first half of this year, Wangzi New Materials achieved operating income of 829 million yuan, a year-on-year increase of 7.53%; net profit was 48.2892 million yuan, although it increased by 47.55% year-on-year, but the net profit after deducting non-recurring gains and losses was 5.4777 million yuan, a year-on-year decrease of 82.88%.
According to data previously disclosed by Wangzi New Materials, in the first five months of this year, China Electric Power Huarui achieved operating income of 3.7679 million yuan and net profit of -5.832 million yuan. At present, China Electric Huarui still has a performance commitment of no less than 65 million yuan in cumulative net profits achieved in 2022 and 2023.
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