On December 3, Doright Co.,Ltd. (300950) announced that its board of directors had approved the termination of its plan to issue shares and pay cash for asset acquisition while raising supporting funds, marking the end of a five-month cross-industry restructuring effort.
The announcement cited the failure to reach an agreement on core terms as the primary reason for the termination.
The proposed major asset restructuring was initially planned in June this year. Doright intended to acquire 100% equity of Whale Cloud Technology Co., Ltd. ("Whale Cloud") through a combination of share issuance and cash payment, alongside raising supporting funds. Preliminary assessments indicated the transaction would constitute a significant asset restructuring and related-party transaction but would not alter the company's actual controller or qualify as a backdoor listing.
Doright outlined its strategic rationale for this cross-industry acquisition in the transaction proposal. As a company specializing in energy-saving and environmental protection equipment manufacturing, Doright has faced increasing industry competition and limited market segments in recent years. For the first three quarters of 2025, Doright's net profit declined by 26.39% year-on-year. Whale Cloud, an international software and IT service provider with operations spanning telecom software, cloud, and AI services, maintains subsidiaries in 20 countries and has been recognized by Gartner as a global benchmark supplier in multiple sectors. Doright aimed to establish a second growth curve and achieve digital transformation through this acquisition.
Reviewing the restructuring timeline: Doright's shares were suspended from trading starting June 30; on July 11, the board approved the transaction proposal, with shares resuming trading on July 14; over the following three months, the company issued three monthly progress updates to fulfill disclosure obligations. Following the proposal's release, market expectations for the transformation drove multiple surges in Doright's stock price. After resuming trading on July 14, the share price peaked at an 82% increase before retreating from mid-October, accumulating a decline exceeding 40% to date. As of December 3, the stock closed at 22.8 yuan per share, with a total market capitalization of 3.477 billion yuan.
The disclosure revealed that despite multiple negotiations between Doright and the counterparty regarding transaction pricing and structure, no consensus was reached on core terms. On November 6, Whale Cloud communicated that its major shareholders disagreed with the restructuring valuation and performance commitment compensation clauses. Whale Cloud's financial data showed net profits of 202 million yuan and 205 million yuan for 2023 and 2024 respectively, but a 133 million yuan loss in Q1 2025 due to seasonal industry factors—a volatility that likely exacerbated valuation disagreements.
Doright stated that terminating the restructuring was a prudent decision to protect company and shareholder interests, given the inability to formulate a mutually acceptable solution within the effective timeframe. On December 3, the parties signed a termination agreement confirming no liability for breach of contract as no substantive agreement had been executed. Doright committed to refrain from planning any major asset restructuring for one month following the termination announcement.
Regarding the impact, Doright emphasized that the termination would not adversely affect normal business operations or production activities.
Fundamentally, Doright reported net operating cash flow of 60.55 million yuan for the first three quarters, a 1,447.22% year-on-year surge, with total assets growing 10.09% since year-end 2024, demonstrating resilience in core operations.
Comments