On the evening of June 25th, Zhejiang Sanfer Electric Co.,Ltd. (ASX: 605336) announced its plan to acquire a 100% equity stake in Hangzhou Huijia Information Technology Co., Ltd. (referred to as "Huijia Technology") through a cash payment, with a preliminary valuation for Huijia Technology ranging between 450 million and 500 million yuan.

This transaction is expected to constitute a major asset restructuring. The deal does not involve the issuance of new shares, will not affect the company's shareholding structure, and will not result in a change of the listed company's controlling shareholder or actual controller. Upon completion, Huijia Technology will become a wholly-owned subsidiary of the company.

The company stated that the transaction is still in its preliminary planning stages, with core elements such as the final transaction structure and price requiring further discussion and negotiation.

On June 26th, the company's stock price hit the daily limit-down, closing at 15.09 yuan. Prior to this decline, the stock had been on a rising streak, with consecutive daily limit-up gains on June 23rd and 24th, followed by a 2.39% increase on the 25th.

Details of the Major Restructuring

It is reported that Huijia Technology was established in December 2016. Its main business involves power distribution equipment, power transmission and distribution equipment, online monitoring hardware, while also providing smart grid solutions and intelligent power services encompassing consulting, information engineering, operation & maintenance, and IT development. Its product portfolio covers intelligent transmission line detection, substation monitoring, distribution network integration equipment, and smart power distribution series.

The company operates a wholly-owned subsidiary, Hangzhou Shengneng Electric Power Technology Co., Ltd., which holds a Grade 3 qualification for general contracting of power engineering construction and Grade 4 qualifications for installation, repair, and testing. This subsidiary specializes in undertaking power installation and equipment testing & maintenance operations.

Regarding the equity structure, Li Lianqiang and Si Yingchang hold 51.02% and 41.75% stakes respectively, while Ningbo Huijia Enterprise Management Partnership holds 7.23%. Notably, Ningbo Huijia Enterprise Management Partnership is a platform for indirect holdings by Li Lianqiang and Si Yingchang, meaning the two individuals collectively hold 100% of Huijia Technology's equity directly and indirectly.

As of now, key financial data for Huijia Technology, such as specific revenue scale and net profit, have not been publicly disclosed.

The announcement indicated that the target company's main products are power distribution equipment, power transmission and distribution equipment, and specialized power online monitoring devices. According to the "National Economic Industry Classification and Codes" (GB/T4754-2017), both the listed company and the target company belong to the "C38 Electrical Machinery and Equipment Manufacturing" industry.

Although both the target company and Zhejiang Sanfer Electric Co.,Ltd. operate within the electrical machinery and equipment manufacturing sector, the listed company's product line includes integrated stoves, integrated cooking centers, integrated sink dishwashers, water heaters, whole kitchens, and whole-house customization. There are significant differences between the two parties in terms of product systems, application scenarios, and customer structures, suggesting limited business synergy.

The company pointed out that if this transaction proceeds smoothly, it will gain control of the target company, which will then be included in its consolidated financial statements. This move is intended to enhance the company's asset quality and comprehensive competitiveness, increase business scale and profitability, thereby creating value for all shareholders.

It is noteworthy that this acquisition marks the company's first-ever major asset restructuring initiative.

Sharp Decline in Performance

Public information shows that Zhejiang Sanfer Electric Co.,Ltd. was founded in 1998, with its core business being the R&D, design, production, and sales of modern new kitchen appliances centered around integrated stoves. The company listed on the Shanghai Stock Exchange Main Board in October 2020.

However, in recent years, influenced by adjustments in the real estate sector, demand in the integrated stove market has slowed and industry competition has intensified.

Merely two years after its IPO, the company's performance trajectory reversed and began a sustained decline. In 2022, the company achieved operating revenue of 946 million yuan, a year-on-year decrease of 3.20%, and net profit attributable to shareholders of the parent company of 214 million yuan, a year-on-year decrease of 13.08%.

From 2022 to 2025, the operating revenues realized by Zhejiang Sanfer Electric Co.,Ltd. were 946 million yuan, 831 million yuan, 430 million yuan, and 227 million yuan respectively, while net profits were 214 million yuan, 190 million yuan, 60 million yuan, and -57 million yuan respectively.

It is evident that since 2022, the company's operational performance has weakened year by year, with both revenue and net profit continuously declining. The year 2025 saw a particularly steep drop, with revenue amounting to only 24% of the 2022 figure, and net profit shifting from profit to loss.

In the first quarter of 2026, the company's downturn continued, with revenue of 23 million yuan, a year-on-year decrease of 51.99%, and a net loss attributable to shareholders of the parent company of 7.2 million yuan, indicating a further widening of the loss compared to the same period last year.

It should be noted that the company has recently been placed under a delisting risk warning.

On April 21st, the company announced that, as the lower value among its audited total profit, net profit, or net profit after deducting non-recurring gains and losses for 2025 was negative, and its operating revenue after deducting income unrelated to its main business and income lacking commercial substance was below 300 million yuan, it had triggered conditions for a delisting risk warning. The company's stock was suspended for one day on April 22nd, resumed trading on April 23rd with the implementation of the delisting risk warning, and its stock abbreviation was changed from "Shuaifeng Electric" to "Zhejiang Sanfer Electric Co.,Ltd.", with a daily price fluctuation limit of 5%. If the company's 2026 financial indicators continue to trigger the relevant conditions, its stock will face termination of listing.

Currently, the downward trend in the company's core integrated stove market persists, making it unlikely for the company to return to profitability through its existing business within the year. Furthermore, the company has publicly stated that it will actively optimize its product structure, control costs and expenses, and promote investment and mergers and acquisitions, striving to have the delisting risk warning revoked as soon as possible.

However, it has been observed that as of the end of the first quarter of 2026, the monetary funds on the company's balance sheet stood at 216 million yuan.

Given that this acquisition is a cash transaction with the target company valued between 450 million and 500 million yuan, this implies that the company will need to secure bank loans or other financing methods to complete the purchase. This raises the question of whether it will impose significant debt pressure on the company.