On the evening of November 26, Shanghai Huafon Aluminium Corporation (601702.SH) announced that it had signed a share transfer agreement with Huafon Group to acquire a 100% stake in Shanghai Huafon Puern Polyurethane Co., Ltd. ("Huafon Puern") for 100.0605 million yuan in cash. The move aims to strengthen and expand the company's business development resources.
Established on June 5, 2008, Huafon Puern is located at No. 1369, Jinshan District, Shanghai, and primarily engages in the production and R&D of polyurethane rigid foam and high-strength polyurethane panels for insulation materials. However, due to underperforming operations, the company has ceased operations.
Financial data reveals that in 2024, Huafon Puern generated revenue of 663,900 yuan but recorded a net loss of 5.0701 million yuan. From January to October 2025, its revenue stood at 411,500 yuan, with a net loss of 4.4416 million yuan. As of October 31, 2025, the company's total assets amounted to 53.7558 million yuan, while its liabilities reached 126 million yuan, resulting in negative net assets of -72.3779 million yuan.
Despite being inactive and carrying negative assets, Huafon Puern was valued at a significant premium in this transaction. Yinxin Asset Appraisal Co. assessed its equity value at 100.0605 million yuan using the asset-based approach—a 172 million yuan increase over its book net assets, representing a 238.25% appreciation.
Notably, in addition to the share transfer payment, Shanghai Huafon Aluminium will indirectly assume the target company's debt. Prior to the transaction, Huafon Group had provided Huafon Puern with 126 million yuan in financial support. Post-acquisition, Huafon Puern will be consolidated into the listed company's financial statements, and Shanghai Huafon Aluminium plans to support its debt repayment through capital injections or loans. Factoring in the debt assumption, the total cost of the acquisition exceeds 220 million yuan.
Shanghai Huafon Aluminium attributed the high valuation premium primarily to the appreciation of land assets held by Huafon Puern. The company, primarily invested in by Huafon Group, specializes in aluminum alloy sheets, strips, and foils for heat transfer applications, widely used in automotive, construction machinery, power plants, and HVAC systems, as well as components for new energy vehicle batteries.
In 2025, Shanghai Huafon Aluminium continued its production expansion. In March, it upgraded its Chongqing base project from an annual output of 150,000 tons to 450,000 tons of high-end aluminum sheets and foils for new energy vehicles, with total investment rising to 2.619 billion yuan and requiring an additional 500 acres of land.
Currently, the company faces tight capacity and storage constraints for raw materials, semi-finished goods, and equipment. It stated that Huafon Puern's vacant land and existing facilities, located nearby, would alleviate logistical and storage challenges.
Following the acquisition, Shanghai Huafon Aluminium will discontinue Huafon Puern's polyurethane insulation business and repurpose its facilities for R&D and production of aluminum heat-transfer materials and stamping parts, aiming to scale up production and enhance efficiency.
The transaction is not a strategic move into polyurethane insulation but rather an efficient acquisition of much-needed land and space resources.
Financial results show that in the first three quarters of 2025, Shanghai Huafon Aluminium achieved revenue of 9.109 billion yuan, up 18.63% year-on-year, with net profit attributable to shareholders rising 3.24% to 896 million yuan. Adjusted net profit grew 0.40% to 861 million yuan.
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