On August 1, Hyde Control issued a major asset reorganization draft, and intends to purchase 75% of Shanghai Xingzhida Automation Technology Co., LTD. (hereinafter referred to as “Xingzhida”). On June 30 this year, because the financial information recorded in the application documents has expired and needs to be supplemented, Hyde Control’s previous acquisition of Xingzhida was suspended by the Shenzhen Stock Exchange. Now just over a month, Hydel Control has once again launched an attack on the acquisition firm Zhida.

Whether this acquisition can provide new growth impetus for Hyde Control and the problem of high receivables of Xingzhida have become the focus of market attention.

Asset transaction price 1.278 billion yuan

Public information shows that Haide Control mainly carries out research and development, production and sales of hardware and software products, system integration and solutions mainly characterized by industrial automation control technology, industrial information technology and its fusion technology, and its main business covers three major sectors: industrial electrical automation business, industrial information business, and new energy business.

TRICONEX 4000093-145

In this asset reorganization, Haide-Control intends to purchase 75% of Xingzhida’s equity held by Shen Chang and other 8 counterparties by issuing shares and paying cash. The asset transaction price is $1.278 billion, of which $338 million is paid in cash and the remainder is paid in shares.

Xingzhida is a solution provider in the field of industrial automation, the main business includes industrial automation product sales business and industrial automation system integration business, downstream covering new energy vehicles, photovoltaic, consumer electronics, medical equipment and semiconductor and other advanced manufacturing industries. As the largest authorized distributor of Omron in Greater China, the purchase amount from Omron in 2022 accounted for 75.69% of the total purchase amount, and there is a risk of significant dependence on suppliers.

As of December 31, 2022, the book value of the owner’s equity attributable to the parent company of Xingzhida was 657 million yuan, and the evaluation result using the income method was 1.715 billion yuan, and the value-added rate was 161.07%.

The parties to the transaction promise that in the three fiscal years of 2023, 2024 and 2025, the net profit of Xingzhi Da to the mother will be no less than 170 million yuan, 180 million yuan and 190 million yuan respectively. According to the announcement, the net profit of Xingzhi Da from January to May this year was 113 million yuan.

Haide Control said that the target company and the listed company have significant complementary advantages in terms of industry, technology and products. After the completion of the acquisition, the listed company will effectively integrate the target company’s capacity reserves in products and supply chains, combine the target company’s market advantages and experience accumulation, and realize the extension of the industrial automation industry service chain to achieve complementary advantages. Further enhance listed companies’ main business operation capabilities.