From October 13 to 14, GON TECHNOLOGY (02768) came under heavy capital pressure: its Hong Kong-listed shares fell nearly 45% over two days, while its A-share counterpart Guoen Holdings hit the daily limit down for two consecutive sessions.
In sharp contrast to the steep share price decline, the company's preliminary third-quarter report disclosed on the evening of October 14 showed that net profit attributable to shareholders is expected to reach 950 million to 1.1 billion yuan, a year-on-year increase of 54.45% to 78.84%, with high growth in its core modified plastics and composite materials businesses delivering as expected.
Market panic is not unfounded. The stock's abnormal movement was directly triggered by the company's October 12 announcement of a 1.504 billion yuan cash acquisition of an 80% stake in Sichuan Zhongfuneng—the target's valuation appreciation rate exceeds 200%, and it is currently embroiled in a trade secret lawsuit. At the same time, the company faces significant cash payment pressure and guarantee risks related to its computing power business. Against the backdrop of solid and improving fundamentals, is this "cross-border" gamble a precise positioning for the domestic substitution window in semiconductor materials, or a radical adventure under a heavy-asset expansion cycle?
Cash Flow Stress Test Under High-Premium Acquisition
According to the company's disclosure, GON TECHNOLOGY's 1.504 billion yuan cash acquisition of an 80% stake in Sichuan Zhongfuneng constitutes a stress test on its balance sheet. The transaction uses the income approach for valuation, with the target company's total equity valued at approximately 1.883 billion yuan, representing an appreciation of about 1.256 billion yuan over its book net assets of approximately 628 million yuan—an appreciation rate of 200.07%. After completion, significant goodwill will be recognized in the consolidated financial statements.
More critically, this is an all-cash transaction: the first installment of 110 million yuan, the second installment of 792.4 million yuan, and the third installment of 601.6 million yuan must be paid in concentrated fashion shortly after the agreement takes effect and delivery, directly consuming the company's freely disposable monetary funds.
The problem is that GON TECHNOLOGY's current cash flow situation is not comfortable. As of the end of the first quarter of 2026, the company's monetary funds stood at approximately 4.006 billion yuan, with net cash flow from operating activities at 132 million yuan, down 28.94% year-on-year. Based on current liabilities of approximately 7.736 billion yuan for the same period, the monetary funds-to-current liabilities ratio is about 51.94%, and the operating cash flow-to-current liabilities ratio is about 1.71%, indicating a relatively weak short-term liquidity safety margin.
Against this backdrop, the 1.5 billion yuan cash outflow, combined with the company's PEEK project, aviation acrylic glass project, and the commissioning and debugging of Guoen Chemical (Dongming)—which still require nearly 1 billion yuan in follow-up investment—as well as guarantee limits of up to 15 billion yuan for its computing power business, has significantly compressed the company's liquidity safety margin.
Although the transaction includes performance commitments (cumulative net profit of no less than 400 million yuan from 2026 to 2028) and double cash compensation clauses, the market is naturally skeptical about the performance delivery capability of cross-border acquisitions. Zhongfuneng's net profit in 2025 was only 71.21 million yuan, and achieving 110 million yuan in net profit in 2026 would mean nearly doubling performance, implying a steep growth trajectory. If future performance falls short of expectations, goodwill impairment will directly impact the income statement, forming a negative cycle of "high-premium purchase—performance miss—goodwill impairment."
Disconnect Between Profit Alert and Hidden Concerns: Bright Book Profits, Pressured Free Cash Flow Expectations
The preliminary third-quarter report disclosed on the evening of October 14 showed that GON TECHNOLOGY's net profit attributable to shareholders is expected to reach 950 million to 1.1 billion yuan, a year-on-year increase of 54.45% to 78.84%. The high growth in the core modified plastics and composite materials businesses is undeniable. Following the profit alert, the stock rose accordingly on the 15th, surging more than 18% at one point during the session before retreating to close at 29.48, up 9.84%.
The market's concern is that profits hard-earned from the core business will be used for a premium acquisition of new assets with lingering uncertainty, and future ROE faces the risk of dilution.
From a sector perspective, electronic specialty gases do possess a long-term narrative of "domestic substitution plus AI-driven demand." Global tungsten hexafluoride supply has contracted due to capacity exits in Japan and South Korea, with prices rising sharply and industry prosperity improving. According to TECHCET data, global tungsten hexafluoride demand has grown from approximately 4,500 tons in 2020 to nearly 9,000 tons in 2025, almost doubling in five years. Business Research Insights predicts the global tungsten hexafluoride market will be approximately 740 million USD in 2026 and could climb to 3.45 billion USD by 2035, with a compound annual growth rate of about 19%. Meanwhile, China's overall electronic specialty gas market is expected to exceed 42 billion yuan by 2030, with an average annual growth rate significantly higher than the global average.
On the supply side, the global supply chain is undergoing structural reshaping. High-purity tungsten powder, the core raw material for tungsten hexafluoride, accounts for 60%-70% of production costs, and China controls over 80% of global tungsten resources. As domestic export controls on tungsten-related items tighten, Japan's Kanto Denka Kogyo and Central Glass—two leading manufacturers that together account for about 25% of global capacity—permanently ceased production from July 2026 due to raw material supply disruptions, creating a global supply gap of approximately 2,000 tons per year.
Under the supply-demand mismatch, tungsten hexafluoride prices rose sharply in 2026, with 5N-grade product quotes up more than 100% from the beginning of the year, 6N-grade spot quotes reaching 2.2 million to 3 million yuan per ton at one point, and 7N-grade long-term contract prices exceeding 3.3 million yuan per ton. In this historic window, the industry is moving from "overseas monopoly" to "domestic dominance," and companies with technical reserves and first-mover capacity advantages will fully enjoy the dividends of rising volumes and prices.
Zhongfuneng's planned 900-ton-per-year tungsten hexafluoride project, with its 100-ton-per-year pilot facility currently advancing, is precisely a key layout positioning itself in this scarce track. Although process validation and customer introduction still require time, standing at the starting point of an industry supply-demand reversal, this forward-looking positioning is expected to open a second growth curve for Guoen Holdings, advancing from traditional new materials to core semiconductor consumables.
However, the electronic specialty gas industry is welcoming an expansion wave from domestic enterprises, and under intensifying competition, the profit sustainability of new entrants is questionable. CSSC Special Gas has existing tungsten hexafluoride capacity of 2,000 tons per year, with net profit up 95.63% year-on-year in the first half of 2026. Haohua Technology, Zhongjuxin, and Heyuan Gas are also actively advancing capacity expansion and customer certification.
In other words, GON TECHNOLOGY's earnings boost is "past tense"—contributed by mature core businesses; what the market is pricing in is the "future tense"—concerns about deteriorating free cash flow, ROE dilution, and cross-border integration risks outweighing the appeal of book profits. Whether GON TECHNOLOGY's cross-border gamble is a precise positioning for the domestic substitution window in semiconductor materials or a radical adventure under a heavy-asset expansion cycle still needs time and performance to verify.
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