Shanghai Weitai Industrial Automation Co., Ltd. (hereinafter referred to as "Weitai," "the listed company," or "the company") recently received the Shenzhen Stock Exchange's inquiry letter titled "Inquiry on the Cash Acquisition of Significant Assets by Shanghai Weitai Industrial Automation Co., Ltd." (Mergers and Acquisitions Inquiry Letter [2025] No. 13, hereinafter referred to as "the inquiry letter"). The company and relevant intermediaries have conducted thorough discussions and analyses regarding the matters involved in the inquiry letter. Based on the information provided by all parties, the company has responded to the relevant questions in the inquiry letter to the Shenzhen Stock Exchange, and the response content and related matters are disclosed as follows. Unless otherwise specified, the abbreviations appearing in this response are consistent with the definitions in the "Report on the Cash Acquisition and Related Transactions of Shanghai Weitai Industrial Automation Co., Ltd. (Draft)." In this response to the inquiry letter, if there are discrepancies in the totals compared to the sum of individual values, they are due to rounding.
Question 1
The report shows that Zijiang New Materials primarily engages in the research, production, and sales of aluminum-plastic composite films for soft-pack lithium batteries, with a declining trend in revenue and profitability in recent years. In 2023, 2024, and the first quarter of 2025, the company achieved operating revenues of 711 million yuan, 623 million yuan, and 155 million yuan, respectively, with net profits of 90.2365 million yuan, 53.5151 million yuan, and 10.1226 million yuan, and gross profit margins of 25.89%, 22.15%, and 21.40%. In 2024, Zijiang New Materials' operating revenue, net profit, and gross profit margin decreased by 12.37%, 40.69%, and 14.45%, respectively. The decline in profitability is mainly due to the decrease in sales prices imposed by key downstream customers for cost control and the introduction of other suppliers for competition, leading to a decline in sales volume and market share for the target company.
- Please explain the core competitiveness of the target product in conjunction with the patent technology, product upgrade pace, competitors' R&D capabilities, and product quality; and please outline the measures to be taken in terms of technology reserves, product characteristics, sales and service, and cost control to address operational risks such as industry technology iteration and market competition, as well as the single product structure.
- Please explain whether the declining performance trend of the target company will continue, considering the industry development situation, competitive landscape, and order status; and please clarify whether the aluminum-plastic film business has synergy with your company's existing main business, whether the core technical personnel and management team of the target company are stable, whether customer resources are sustainable, and whether your company possesses the capability for business development, management, technology, and business reserves in the industry to which the target company belongs.
- Please further explain whether the acquisition decision is prudent and whether this transaction is beneficial for enhancing your company's sustainable operating capacity and core competitiveness. Please have an independent financial advisor provide verification opinions.
Response
- Please explain the core competitiveness of the target product in conjunction with the patent technology, product upgrade pace, competitors' R&D capabilities, and product quality.
- The target asset possesses internationally advanced independent R&D core technology. Zijiang New Materials has been deeply engaged in the aluminum-plastic film industry for many years, owning internationally advanced and domestically leading independent R&D core technology. As of the date of this response, Zijiang New Materials and its subsidiaries have obtained a total of 68 domestic patents, including 18 invention patents and 50 utility model patents. The status of the invention patents is shown in the following table: