Chinese-English Technology Plans Major Asset Restructuring! Stock Continues Trading

On the evening of February 27, Zhongying Technology announced that the company is planning to acquire at least 51% of Changzhou Yingzhong Electric Co., Ltd. and obtain its controlling interest. After the transaction is completed, Yingzhong Electric will become a controlling subsidiary of the company.

This transaction is expected to constitute a major asset restructuring and a related-party transaction. It does not involve issuing shares, does not constitute a reorganization or listing, and will not result in a change of the company’s controlling shareholder or actual controller. According to relevant regulations, the company’s stock will remain trading during this planning process.

Image source: Company announcement

Wind data shows that on February 27, Zhongying Technology closed at 44.50 yuan per share, with a latest total market value of 3.3 billion yuan.

Plan to acquire at least 51% of Yingzhong Electric

According to the announcement, Zhongying Technology plans to acquire at least 51% of Yingzhong Electric with cash. After the transaction, Yingzhong Electric will become a controlling subsidiary of the company and will be included in the consolidated financial statements. On February 26, the company signed a “Share Purchase Intent Agreement” with three shareholders of Yingzhong Electric—Yu Yingzhong, Yu Biao, and Zhu Lijuan—and reached a preliminary consensus on the acquisition.

This transaction is expected to constitute a major asset restructuring and, due to related-party relationships, also qualifies as a related-party transaction. The announcement states that Yu Yingzhong and Zhu Lijuan are spouses, and Yu Biao is their son. They hold 60%, 10%, and 30% of Yingzhong Electric’s shares, respectively. Yu Yingzhong and Yu Weizhong, one of the actual controllers of Zhongying Technology, are brothers, making this a related-party transaction.

The announcement clarifies that this transaction does not involve issuing shares, does not constitute a reorganization or listing, and will not change the company’s controlling shareholder or actual controller. Currently, the transaction is still in the preliminary planning stage. Key details such as the specific transaction plan and price will be further negotiated based on an asset valuation report from an appraisal agency. Subsequent internal and external decision-making and approval procedures will also be required.

Additionally, according to relevant rules, this planning does not involve a suspension of trading of the company’s stock. Zhongying Technology will disclose information in phases as the transaction progresses to ensure investors are informed.

Benefits such as improving the company’s asset quality

The announcement states that Yingzhong Electric, as a professional supplier of insulating fiber materials and their molded products, has developed over many years in the industry. Its products now cover all voltage levels, including medium, low, high, ultra-high, and extra-high voltage AC/DC power transmission and transformation equipment supporting products, forming good synergy with Zhongying Technology’s business layout.

Zhongying Technology is a leading domestic enterprise in high-end communication materials, focusing on R&D, production, and sales of high-frequency communication materials and their products. The company stated that if this acquisition proceeds smoothly, it will help improve asset quality and overall competitiveness, expand business scale, and increase profitability, creating greater value for all shareholders.

The announcement also highlights relevant investment risks that investors should pay close attention to: First, the transaction is still in the preliminary planning stage, and the transaction plan and terms require further discussion and negotiation. There is a possibility that internal and external decision-making and approval processes may not be completed. Second, there is uncertainty in the transaction; external environmental changes could lead to adjustments or termination of the deal. Third, since the stock will not be suspended, subsequent transaction progress and market fluctuations may impact the stock price.

On the evening of January 30, Zhongying Technology issued a performance forecast for 2025. The company expects net profit attributable to shareholders of listed companies to be between 1.8 million and 2.7 million yuan, a year-on-year decrease of 94.31% to 91.47%.

(Source: China Securities Journal)