Following its announcement in January to pursue a Hong Kong listing, Dinglong Co., Ltd., with a market value of 40 billion yuan, has recently unveiled an acquisition plan, intending to invest 630 million yuan to heavily bet on the lithium battery material sector.
According to an announcement released by Dinglong Co., Ltd. on the evening of January 26, the company plans to use its own or raised funds to acquire 70% equity of Shenzhen Haofei New Material Co., Ltd. (hereinafter referred to as "Haofei New Material") through a share transfer agreement.
It is understood that Dinglong Co., Ltd. primarily focuses on strategic areas such as integrated circuit design, semiconductor process materials, semiconductor display materials, and printing and copying consumables, whereas Haofei New Material is currently the absolute leading domestic enterprise for new lithium battery dispersants.
The intention behind this acquisition is quite clear for Dinglong Co., Ltd.: it aims to leverage Haofei New Material's technological advantages and market position to enter the lithium battery material industry, represented by key functional process auxiliary materials such as lithium battery binders and dispersants, thereby building a new growth engine for the company and optimizing its business structure and profit quality.
It is worth noting that last October, Zhu Shuangquan, Chairman of Dinglong Co., Ltd., along with Zhu Shunquan and Zhu Mengqian, acquired 25.63% of the voting rights in another listed company, Zhongyuan Co., Ltd., and subsequently was successfully elected as Chairman of that company, thus becoming the helmsman of two listed companies.
In terms of performance, Dinglong Co., Ltd. saw growth in both revenue and net profit attributable to shareholders in the first three quarters of last year. As of the market close on January 28, Dinglong Co., Ltd.'s latest market value reached 44.165 billion yuan.
Beneath the surface of frequent capital moves and seemingly impressive performance, Dinglong Co., Ltd. also faces some underlying concerns that cannot be ignored. For example, in the first three quarters of last year, the performance of the company's traditional consumables business was under significant short-term pressure.
As of the end of the third quarter of last year, Dinglong Co., Ltd.'s asset-liability ratio had increased significantly by over 7 percentage points compared to the end of the previous year. The rise in the asset-liability ratio indicates a heavier debt burden for the company.
Public information shows that Dinglong Co., Ltd. started with printing consumables and, through continuous innovation and transformation, has now developed into a leading platform-based company in China for various core innovative materials in key major sectors.
Currently, Dinglong Co., Ltd. focuses on three segments within the semiconductor innovative materials field: CMP process materials for semiconductor manufacturing and wafer photoresists, semiconductor display materials, and semiconductor advanced packaging materials, while continuously expanding its layout in innovative materials for other related major application areas.
Regarding the plan to spend 630 million yuan to acquire 70% equity of Haofei New Material, Dinglong Co., Ltd. has its own considerations, aiming to implement the strategic development goal of becoming an "innovative materials platform-based enterprise," cultivate industrial growth poles in multiple fields, and strengthen the company's business layout and competitiveness in the new energy materials track.
The funding source for Dinglong Co., Ltd.'s acquisition of Haofei New Material is the company's own or raised funds. After the completion of this transaction, Haofei New Material will become a subsidiary controlled 70% by Dinglong Co., Ltd. and will be included in Dinglong Co., Ltd.'s consolidated financial statements.
Based on the reverse calculation from the 630 million yuan acquisition price, the overall valuation of 100% equity of Haofei New Material is 900 million yuan. This valuation comprehensively considers factors such as Haofei New Material's industry influence, supply chain integration capabilities, business development and future trends, and profitability level, combined with its financial data and asset situation, and was finally determined through negotiation between the two transacting parties.
From a valuation logic perspective, the announcement mentioned that the price-to-earnings (P/E) ratio for the overall valuation of Haofei New Material in this transaction does not exceed 10 times, and does not exceed the average P/E ratio of comparable transaction target companies, indicating that Haofei New Material's valuation is relatively prudent and the transaction pricing is fair.
It is noteworthy that the payment arrangement for part of the transaction consideration is directly linked to performance: the final 100 million yuan installment of the 630 million yuan acquisition price is to be paid within five working days after Haofei New Material achieves a non-GAAP net profit of 100 million yuan, confirmed by Dinglong Co., Ltd., starting from January 1, 2026. This clause indirectly sets a threshold for Haofei New Material's profitability.
In terms of performance, Haofei New Material has seen significant revenue growth in recent years, recording revenues of 290 million yuan, 345 million yuan, and 481 million yuan for 2023, 2024, and January to November 2025, respectively.
However, the announcement did not disclose Haofei New Material's profitability in recent years.
The reason given in the announcement for this omission is: Due to the confidentiality constraints of the transaction counterparty and the target company, and to protect the commercial interests of both parties, it was mutually agreed upon not to publicly disclose the specific net profit data of the target company involved in this transaction. The share transfer agreement for this transaction will be filed with the securities regulatory authorities.
According to the agreement, after the completion of this transaction, the daily operation and management of Haofei New Material will be primarily handled by the existing team; if required by the company's business needs, the parties will negotiate the arrangement for appointing relevant management personnel. Dinglong Co., Ltd. retains the right to appoint a financial responsible person to Haofei New Material.
To maintain the continuous competitiveness of Haofei New Material's products, Haofei New Material should continue its R&D investments in 2026, 2027, and 2028, with the annual R&D investment in each of these three years not lower than the average R&D investment amount for 2024 and 2025.
Haofei New Material, which has caught the eye of Dinglong Co., Ltd., is a new energy enterprise focused on lithium battery process materials. Its core team has deep experience in the lithium battery materials field for over ten years, possessing profound technical accumulation and industry experience.
As the absolute leading domestic enterprise for new lithium battery dispersants, Haofei New Material has built a solid technological barrier relying on strong R&D capabilities.
To date, Haofei New Material owns more than 40 related invention patents, has established R&D centers in multiple locations, and has built large-scale production and logistics bases.
Simultaneously, Haofei New Material's product layout closely follows industry technology trends.
Targeting application scenarios such as new energy vehicles, large-scale energy storage, AI data centers, low-altitude economy, and robotics, as well as new technology routes like solid-state batteries, sodium-ion batteries, silicon-based anodes, and high-nickel ternary materials, Haofei New Material has developed various functional dispersants, binders, and other functional process auxiliary materials, which can effectively improve the interfacial activity of battery materials and enhance conductivity and safety.
Reportedly, Haofei New Material's cooperative customers cover the top ten global new energy manufacturers by shipment volume. Its product quality and service capabilities are widely recognized, and its market share holds a leading position in the supply chain for similar products among downstream customers.
From an industry perspective, the sector in which Haofei New Material operates has high growth potential. Benefiting from demand pull from downstream industries such as new energy vehicles and energy storage, the lithium battery material market has maintained strong growth momentum in recent years.
Lithium battery binders and dispersants are key functional process auxiliary materials within lithium battery materials. The domestic market size for binders and dispersants is expected to exceed 20 billion yuan by 2030.
In the view of Dinglong Co., Ltd., this transaction will help it enter the high-growth new energy materials track and lay out a new performance growth curve; leverage its platform advantages to achieve integration and synergy of technology and customer resources, and expand into new categories of lithium battery materials; optimize its financial structure and enhance profit quality.
Dinglong Co., Ltd. stated that after the acquisition is completed, the company can integrate the R&D, procurement, management, and sales resources of both parties, achieve economies of scale, reduce unit production costs, and improve overall operational efficiency.
Dinglong Co., Ltd. believes that the stable cash flow and profit contribution from Haofei New Material in the field of key functional process auxiliary materials for lithium batteries will significantly boost the company's performance and optimize its business structure and profit quality.
Furthermore, the high growth potential and valuation advantages of the new energy sector will further enhance the company's overall valuation level and strengthen capital market confidence in the company's future development.
An analysis reveals that this plan to acquire Haofei New Material is not the only recent capital move by Dinglong Co., Ltd.
In January of this year, Dinglong Co., Ltd. announced that the company was planning a Hong Kong stock market listing.
Explaining the move for a Hong Kong listing, Dinglong Co., Ltd. stated that it aims to deepen the global strategic layout in the field of innovative materials, accelerate the process of overseas business expansion, enhance brand international influence and comprehensive competitiveness, while simultaneously building an international capital operation platform and strengthening overseas financing capabilities, among other reasons.
Corporate information shows that the actual controllers of Dinglong Co., Ltd. are Zhu Shuangquan and Zhu Shunquan.
Furthermore, in late October last year, Zhu Shuangquan, Zhu Shunquan, and Zhu Mengqian also acquired 25.63% of the voting rights in Zhongyuan Co., Ltd., thereby becoming the new actual controllers of that listed company.
Currently, Zhu Shuangquan is not only the Chairman of Dinglong Co., Ltd. but also holds the key position of Chairman at Zhongyuan Co., Ltd.
It is understood that Zhongyuan Co., Ltd. is mainly engaged in the R&D, manufacturing, sales, and service of products related to intelligent recording and analysis for power systems, time synchronization, distribution network automation equipment, and integrated automation systems.
In the first three quarters of last year, Zhongyuan Co., Ltd.'s revenue increased by 18.65% year-on-year to 415 million yuan, and its net profit attributable to shareholders increased by 69.27% year-on-year to 113 million yuan.
Shifting the focus back to Dinglong Co., Ltd., the company also delivered a satisfactory report card for the first three quarters of last year. During the reporting period, the company achieved revenue of 2.698 billion yuan, a year-on-year increase of 11.23%; net profit attributable to shareholders was 519 million yuan, a year-on-year increase of 38.02%.
According to the latest performance forecast released by Dinglong Co., Ltd., the company expects to achieve a net profit attributable to shareholders of 700 million to 730 million yuan for the full year of last year, representing a year-on-year increase of 34.44% to 40.2%.
Dinglong Co., Ltd. explained that its performance growth is mainly attributed to two factors. On one hand, the strong growth of its semiconductor materials and display materials businesses provided solid support; on the other hand, the company continued to deepen cost control, and the effective release of lean operation efficiency helped drive the overall improvement in profitability.
Despite frequent capital operations and steady performance growth, the potential risks facing Dinglong Co., Ltd. should not be overlooked. Specifically, regarding individual businesses, the performance of Dinglong Co., Ltd.'s general printing and copying consumables business declined.
In the first three quarters of last year, this segment achieved sales revenue (excluding printing consumable chips) of 1.153 billion yuan, a decrease of 13% year-on-year. As a traditional business of Dinglong Co., Ltd., the sales revenue of this segment was under short-term pressure, mainly affected by continuous fluctuations in demand and industry sentiment in the consumables market.
In terms of cash flow, for the first three quarters of 2025, cash flow from operating activities generated by Dinglong Co., Ltd. was 770 million yuan, and cash flow from financing activities was 1.213 billion yuan. However, cash flow from investing activities was -1.253 billion yuan, primarily due to payments made during the reporting period for acquiring minority shareholder equity in subsidiaries and increased purchases of wealth management products.
Regarding assets and liabilities, as of the end of the third quarter of last year, Dinglong Co., Ltd.'s total liabilities were 3.691 billion yuan, an increase of 46% compared to the end of 2024; the asset-liability ratio was 41.11%, an increase of over 7 percentage points from 34.08% at the end of 2024.
Subsequent developments regarding Dinglong Co., Ltd. will continue to be monitored.
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