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According to the Financial News Agency on December 12 (Reporter Chen Kang), Hangzhou Gaoxin (300478.SZ) announced tonight that it will acquire a competitor. According to the announcement, the company is planning to acquire 51% of the shares held by Fujian Nanping Sun Cable Co., Ltd. (referred to as "Sun Cable") from Hangzhou Ruixin Cable Materials Partnership (General Partnership) (referred to as "Hangzhou Ruixin") by paying cash for assets.

Sun Cable is a limited liability company primarily engaged in the research and development, production, and sales of polymer rubber and plastic materials. Hangzhou Gaoxin stated that Sun Cable has a high degree of synergy with the company's main business. Upon completion of this transaction, the company will obtain control of Sun Cable, which will become a subsidiary held by the company, thereby strengthening the company's overall competitiveness.

The announcement has not disclosed the valuation of the target company. The final valuation will be determined in the formal acquisition agreement. The total transaction price is the valuation of the target company multiplied by the ratio of the target equity to the registered capital of the target company after this transaction.

Fujian Shanghang Sun Copper Co., Ltd. (which is a subsidiary controlled by Fujian Nanping Sun Cable Co., Ltd., referred to as "Sun Copper") holds 49% of the target company shares and has agreed to waive its preferential purchase rights to the target company's equity. Currently, Hangzhou Gaoxin has signed a "Letter of Intent for Acquisition" with the shareholders of Sun Cable, Hangzhou Ruixin, and Sun Copper.

Since its establishment, Hangzhou Gaoxin has changed its actual controller and chairman multiple times. Its founder, Gao Changhong, faced a debt crisis in 2019 due to violations involving the improper use of company funds and loans and guarantees totaling nearly 2 billion yuan. As a result, Hangzhou Gaoxin suffered a loss of 0.293 billion yuan in 2019. From 2019 to the third quarter of 2024, the company only made a profit in two years, 2021 and 2023, with net incomes of 14.81 million yuan and 23.65 million yuan, respectively.

Financial News reporters noted that in July of this year, Hangzhou Gaoxin issued two correction announcements consecutively due to errors in the "Product Capacity Situation" section of the annual reports for 2022 and 2023. Before the correction, the capacity utilization rates of the company's main products—polyvinyl chloride cable materials, halogen-free low-smoke flame-retardant cable materials, and special polyethylene and cross-linked polyethylene cable materials—for the fiscal years 2022-2023 were 50%, 60%, and 90%, respectively. After the correction, the capacity utilization rates for the three major products in 2022 dropped to 32.29%, 25%, and 76.02%, while for 2023 they were changed to 31.82%, 39.9%, and 93.34%.

The adjustment of production capacity utilization also indirectly confirms the challenges faced by Hangzhou Gaoxin in the New Materials market. The company's long-term poor performance is not only related to repaying debts brought by the founder but also to the operational pressure faced by the company itself.

In addition, two days ago, the company announced that the shareholder holding more than 5% of shares, Liaoning Zhongke, plans to reduce its shareholding in the company by no more than 1% of the company's total shares through centralized bidding or block trading.