Incidents:
On June 18, Shanghai Laishi issued an announcement regarding the progress of the company's shareholders' agreement to transfer the company's shares and the completion of transfer registration. The transfer registration procedure for the relevant shares was completed on June 18, 2024. Haiyingkang holds 20% of the company's shares and controls the voting rights corresponding to 26.58% of the company's shares in total, becoming the controlling shareholder of the company, and Haier Group will become the actual controller of the company. On the same day, the company also announced the “Ninth Amendment to the Exclusive Agency Agreement” and the “Exclusive Strategic Cooperation General Agreement” signed with Kirriff.
The equity transfer was officially implemented, and the company began a new journey:
On December 29, 2023, Shanghai Race signed a “Strategic Cooperation and Share Purchase Agreement”. Haier Group or its designated related parties intend to agree to acquire 1,329 billion shares of the company held by Kirriff, accounting for 20.00% of the company's total share capital, with a transfer price of RMB 12.5 billion. Based on the company's market capitalization of 51.4 billion dollars at the close of June 18, 2024, the premium rate is 16.7%. In 2023, Shanghai Laishi had a total of 5 blood products enterprise licenses. The total number of plasma stations reached 43 (41 in operation), with a pulp collection capacity of more than 1,500 tons. It is in the first tier of the blood products industry in China. The entry of Haier Group is expected to empower Shanghai Laishi's development in various aspects such as pulp station expansion and development, operation and management, channel sales, and upstream and downstream industrial chains, and further open up the company's growth ceiling.
Kiri's partnership continues to deepen, obtaining long-term benefits as an exclusive agent for albumin:
In the “Exclusive Strategic Cooperation Master Agreement”, Kirriff and Haier agreed to carry out in-depth cooperation in various areas such as blood products business agency, distribution, research and development, and joint research and development; in addition to the blood products business, they are also bound to cooperate with existing and future products in the fields of nucleic acid testing, bioscience, and diagnosis. In the “Ninth Amendment to the Exclusive Agency Agreement”, Haier and Kirriff have agreed on the minimum annual quantity applicable from January 1, 2024 to December 31, 2028, which shall apply to all products; for the next five years, the parties further agree to discuss and agree in good faith on the minimum annual quantity to be applied for the next five years after January 1, 2029 no later than the minimum annual quantity for 2028 as set out in this agreement. Price aspect: For products ordered by the dealer before June 18, 2024, the original price shall continue to apply; for products ordered by the dealer from June 18, 2024 until December 31, 2026, the new product price shall apply; after the expiration of the validity period of such prices, the two parties shall negotiate the new price applicable to the product, provided that the price of the product from January 1, 2024 to December 31, 2028 is not higher than Kirriff Global's past price The price charged before the delivery date, and the competitive price in the market at that time. In the next ten years, the stability of Shanghai Laishi's exclusive agent Kiri's albumin business will be further improved.
Investment advice:
We expect the company's net profit to be returned to mother in 2024-2026, respectively
22.94/26.49/3.085 billion yuan, corresponding EPS is 0.35/0.40/0.46 yuan respectively. The current stock price corresponding PE is 22.42/19.41/16.67 times, respectively. It continues to be recommended and given a “buy” rating.
Risk warning:
The amount of pulp collected falls short of the expected risk; the risk of product sales falling short of the expected risk; the launch of a new product falls short of the expected risk.