Incident: On December 29, 2023, the company announced that Haier Group had acquired 20% of the company's shares held by Kirriff, with a total transfer price of 12.5 billion yuan (transfer price 9.4 yuan/share, closing price 8 yuan/share on December 29), with a premium of 17.6%. The actual controller of the company, Haier Group, holds 26.58% of the voting rights. After the transaction is completed, Kirriff will continue to hold 6.58% of Shanghai Rice's shares and reserve a seat on the board of directors. In addition, Kirriff and Shanghai Laishi signed a ten-year exclusive agency agreement for albumin: between 2024-2028, a minimum annual supply of albumin is guaranteed, and at prices not higher than those previously charged by Kirriff and at competitive prices in the market at that time.

Haier Group is strong and helps the company grow in many ways: Founded in 1984, Haier Group is a collectively owned enterprise (non-state-owned enterprise, non-private enterprise), ranked 79th among the top 500 Chinese enterprises, and is a leading enterprise in Shandong Province. Haier has established 10 R&D centers, 71 research institutes, 35 industrial parks, 138 manufacturing centers, and 230,000 sales networks around the world. In recent years, Haier has focused on setting up a big health industry circuit. Currently, it owns two listed companies, Haier Biotech and Yingkang Life. Committed to the R&D, production and application of high-end scientific research equipment, medical devices and medical service solutions, our products and services have entered nearly 160 countries and regions around the world. Haier will support Race to continue to increase investment in R&D. It will also use its long-term accumulated advantages in intelligent manufacturing, lean management, and corporate governance to empower Race to continuously improve product technology and technological innovation capabilities, and help Race become a competitive company in China and the world.

Shandong has a large population, and its average pulp collection volume is high. As a leading enterprise in Shandong, Haier is expected to enable new growth in plasma stations in Shandong: Shandong is a province with a large population and high population density. As a major blood products province, Shandong has a total of 52 counties, and there are less than 20 plasma collection stations by 2023. Among them, Taibang Biology and Temple of Heaven all have prize stations. With Haier's position in Shandong, it is expected to enable the development of new pulp stations.

Profit forecast and investment rating: We estimate that the company's revenue for 2023-2025 will be 76.91, 90.68, and 10.661 billion yuan, respectively, and net profit to mother will be 22.18, 26.66, and 32.26 billion yuan, respectively. The current market value corresponds to PE of 24 times, 20 times, and 17 times, respectively. The blood products industry has broad room for growth and high industry concentration. As an underrated leading target among blood products companies, the company's new majority shareholders are expected to enable the company to grow in a new round, stabilize the agency business in the future, and maintain a “buy” rating.

Risk warning: risk of performance falling short of expectations, risk of impairment of goodwill, exchange rate risk, etc.