On the evening of August 22nd, Laike Electric announced that the company plans to acquire 81.7341% equity of Suzhou Lihua Technology Co., Ltd. (referred to as “Lihua Technology”) held by Laike Electric Investment Group (referred to as “Laike Investment”) and 14.8114% equity of Lihua Technology held by RayVal Holding CompanyLimited with its own funds of 273 million yuan, totaling 96.5455% equity.
After the completion of this acquisition, the company can leverage its strength in the core component business field, form synergies through business integration with Lihua Technology, promote internal business integration and technological innovation, and further expand its electronic control business in the fields of communication, industrial control, medical, and new energy.
According to the announcement, Lihua Technology is an EMS enterprise with decades of experience in electronic manufacturing and processing services in China, providing manufacturing and supply chain solutions services to OEM companies in various industries. Our independent research and development team, professional PCBA manufacturing equipment, sound quality system, and professional project team have earned Lihua Technology a good reputation in the domestic EMS industry and long-term cooperation with leading customers in the European and American industries; Lihua Technology’s services involve fields such as communication, industrial control, and healthcare. The global industrial technology is developing rapidly, with a huge market and vast potential for expansion in the future; At present, the sales scale of Lihua Technology is about 1 billion yuan, and the customer development is relatively stable. Lihua Technology has established deep cooperation with it, and the future development prospects are good.
Laike Electric is a home appliance enterprise that focuses on high-speed motors as its core technology, and specializes in green intelligent small household appliances such as home cleaning, air purification, water purification, kitchen appliances, horticultural tool products, and core supporting components.
In daily business operations, Laike Electric also engages in related party transactions with Lihua Technology. According to the 2022 annual report of Laike Electric, the total amount of related party transactions between the company and Lihua Technology and its subsidiaries for purchasing goods was 31.3107 million yuan, and 1.4125 million yuan was sold to Lihua Technology and its subsidiaries.
Financial data shows that Lihua Technology achieved a revenue of 1.059 billion yuan and a net profit of 48.9909 million yuan in 2022; From January to June 2023, Lihua Technology achieved a revenue of 480 million yuan and a net profit of 21.3969 million yuan. As of June 30, 2023, Lihua Technology’s net assets were 285 million yuan. The valuation of this transaction is basically consistent with the net assets of Lihua Technology.
Laike Electric stated that the electronic manufacturing services (EMS) industry has good development prospects and a huge market. Currently, the industry is in a period of rapid growth and development. After the completion of this acquisition, the listed company can leverage its strength in the core component business field to form synergies through business integration with Lihua Technology, promote internal business integration and technological innovation, further expand its electronic control business in the fields of communication, industrial control, healthcare, and new energy, expand its business scale, provide new growth points for the company’s future performance, and reduce related party transactions, Beneficial to the long-term development and strategic planning of the company.
Recently, Laike Electric also disclosed its performance forecast for the 2023 half year report, which predicts that it will achieve a net profit attributable to the parent company of 495 million to 605 million yuan in the first half of the year, a year-on-year increase of 2.69% -25.51%. The reason for the expected increase in performance is that the company adheres to independent innovation, seizes market opportunities, continuously optimizes business and product structure, focuses on advantageous products, and increases the proportion of high value-added businesses; At the same time, effective measures such as optimizing organizational structure and controlling operating costs are being promoted to reduce costs and increase efficiency, and the exchange gains brought about by the appreciation of the US dollar have a positive impact.