Yunnan Energy New Material Co., Ltd. (YNNM) plans to acquire 100% equity of Qingdao Zhongke Hualu New Material Co., Ltd. (Zhongke Hualu) and will resume trading on December 15.
On the evening of December 12, YNNM disclosed a transaction proposal indicating its intent to purchase Zhongke Hualu’s full stake via a share issuance, alongside a private placement to raise supporting funds. As a leading lithium-ion battery separator manufacturer in the A-share market, YNNM is pursuing this deal amid an industry upcycle.
Li Xiaoming, Chairman of YNNM, recently stated, "The separator segment and the broader lithium battery industry are expected to maintain robust growth in the coming years." YNNM suspended trading on December 1 pending this transaction and is set to resume on December 15. As of November 28, its shares closed at RMB 55.35 apiece, with a total market cap of RMB 54.37 billion.
**Key Transaction Terms** The issuance price for the acquisition is set at RMB 34.38 per share, representing no less than 80% of YNNM’s 120-day average trading price prior to the pricing benchmark date. The final transaction value remains undetermined as auditing and valuation of Zhongke Hualu are ongoing, making precise post-deal equity structure calculations impossible at this stage.
Concurrently, YNNM plans a private placement targeting up to 35 qualified investors to raise ancillary funds. Proceeds will cover intermediary fees, taxes, Zhongke Hualu’s project development, and working capital for both firms. The fundraising cap is 100% of the acquisition’s share-based consideration, with new shares not exceeding 30% of YNNM’s post-issuance total. The placement price will be no lower than 80% of YNNM’s 20-day average pre-benchmark price.
**Strategic Rationale** YNNM, a global leader in battery separators, aims to integrate Zhongke Hualu’s expertise in wet-process separator equipment and products to mitigate supply chain risks and enhance competitiveness. Zhongke Hualu specializes in R&D and production of lithium battery separator equipment and polymer film materials, serving battery and separator manufacturers.
Post-acquisition, YNNM expects closer collaboration in separator equipment to prioritize supply security during peak demand cycles. The firm reported Q3 2025 revenue of RMB 3.78 billion, up 40.98% YoY. Li emphasized strong industry demand and high capacity utilization.
**Financial Snapshots** As of September 30, 2025: - Zhongke Hualu: Total assets RMB 4.478 billion; equity attributable to owners RMB 1 billion. Net losses (attributable) were RMB 82.43 million (2023), RMB 293 million (2024), and RMB 190 million (Jan–Sep 2025). - YNNM: Total assets RMB 48 billion; equity attributable to owners RMB 24.778 billion. Net profits (attributable) were RMB 2.527 billion (2023), followed by losses of RMB 556 million (2024) and RMB 86.323 million (Jan–Sep 2025).
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