On the evening of December 6, Xu Ji Electric announced that the company intends to acquire 100% of the shares of Harbin Electrical Instrument Research Institute Co., LTD. (hereinafter referred to as “Harbin Table Institute”) held by Xu Ji Group Co., LTD. (hereinafter referred to as “Xu Ji Group”) with its own funds of 440 million yuan.

Because the company and Xuji Group are controlled by China Electric Equipment Group Co., LTD., and Habiao is a wholly-owned subsidiary of Xuji Group, this transaction constitutes an affiliated transaction.

In terms of performance commitments, Xu Ji Group promises that the net profit after deducting non-recurring gains and losses in 2024, 2025 and 2026 will be no less than 19.44 million yuan, 19.75 million yuan and 19.9 million yuan. If the net profit after deducting non-recurring gains and losses accumulated in the performance commitment period is less than the net profit after deducting non-recurring gains and losses accumulated in the performance commitment period, Xuji Group will compensate the company year by year during the performance commitment period.

Announcement shows that the table was built in 1958, in June 2000, the institute into the Xuji Group, Heilongjiang Electrical instrumentation Engineering Technology Research Center Co., LTD., Harbin Jinhe Electrical Measurement and Instrumentation magazine Publishing Co., LTD., China Electrical instrumentation quality supervision and inspection Center three wholly-owned units.

According to the consolidated statement of the company, as of August 31, 2023, its total assets were 577 million yuan, and in 2022 and the first eight months of 2023, the company achieved revenue of 337 million yuan and 267 million yuan, respectively, and the corresponding net profit was 256.112 million yuan and 29.3352 million yuan.

According to the data, the Institute undertakes the functions of the secretariat of the National Technical Committee for Standardization of Electrical Instruments (SAC/TC104), the secretariat of the International Electrotechnical Commission IEC/TC85, and the domestic technical centralization work of the International Electrotechnical Commission IEC/TC13 and IEC/TC85.

Xu Ji Electric said that the acquisition of 100% of the shares of Hartable will further enhance the company’s core competitiveness in the field of intelligent electricity industry influence, domestic and international standards development, market development and other core competitiveness, give full play to synergistic advantages, enhance the viscosity of large customers, and support the company’s domestic and overseas market expansion. After the completion of the transaction, the company’s business structure continued to be optimized and its profitability further improved. After the completion of this transaction, the company will be included in the scope of the company’s consolidated statements.

Shen Meng, executive director of Chanson Capital, told the Securities Daily reporter: “Xuji Electric’s acquisition of Hartable can enhance the foundation of listed companies in research and innovation, which is conducive to highlighting the differentiation advantage of enterprise competition.”

Xuji Electric is a leading enterprise in China’s power equipment industry, focusing on the five core businesses of UHV, smart grid, new energy, electric vehicle charging and replacement, rail transit and industrial intelligence, and emerging businesses such as integrated energy services, advanced energy storage, intelligent operation and maintenance, and power Internet of Things. Its products are widely used in all aspects of the power system.

According to the National Energy Administration data, from January to October this year, the country’s major power generation enterprises completed investment of 662.1 billion yuan, an increase of 43.7%. The investment in power grid projects was 373.1 billion yuan, up 6.3% year on year.

Haitong Securities research report analysis that this year, Jinshang-Hubei, Longdong-Shandong, Ningxia – Hunan, Hami – Chongqing UHV DC projects have been approved to start, UHV AC and DC transmission channel construction accelerated, power grid construction demand continues to be strong. The company won the bid for DC control protection and converter valves and other products totaling more than 1.3 billion yuan. With the continuous advancement of UHV construction, Xuji Electric is expected to benefit deeply as the core target of UHV DC equipment.

Song Qinghui, an economist and founder of Qinghui Think Tank, told the Securities Daily reporter: “Xu Ji Electric’s acquisition of 100% of the shares of Hartable, on the one hand, helps to play a synergistic effect, increase the size of the company and enhance profitability, on the other hand, is expected to further enhance the company’s core competitiveness.” In recent years, with the continuous rapid development of social economy, the scale of power equipment has been continuously expanded, in this context, as the leader of power grid equipment Xuji Electric is facing a rare opportunity for development, with broad market prospects.”