A highly anticipated cross-border "David vs. Goliath" merger has been unexpectedly terminated. On November 7, Doright Co.,Ltd. announced receiving feedback from Whale Cloud Technology Co., Ltd. (the target company), stating that parties failed to reach a mutually satisfactory agreement within the effective timeframe, prompting discussions to terminate the major asset restructuring.
When first announced on July 14, the market reacted enthusiastically—Doright's stock hit a 20% daily limit up, followed by a 10.4% gain the next day and another limit-up on the third day, totaling a 59% surge. Including subsequent gains, the stock nearly doubled within two months.
Notably, three days before trading resumed (July 11), controlling shareholder Wei Zhenwen transferred 5% of shares via block trade to a three-month-old limited partnership platform. This entity is linked to Liu Xiaodan, former chairwoman of Huatai United Securities and founder of Morning Fund, dubbed the "M&A Queen." The timing raises questions about why Wei relinquished near-guaranteed profits ahead of the rally.
Doright's termination notice stated the company won't pursue major restructuring for at least one month. Whether restructuring efforts resume afterward warrants attention.
**Disparate Scales and Sudden Collapse** The deal, in works for over four months, proposed acquiring 100% of Whale Cloud through stock issuance and cash payments. Whale Cloud specializes in cloud computing, big data, and AI solutions for telecom operators and enterprises—a stark contrast to Doright's energy-saving heat exchange equipment business.
Financially, Whale Cloud dwarfed Doright: 2024 figures showed Whale Cloud's total assets (¥5.413B) and revenue (¥3.654B) were roughly 4x and 6x Doright's (¥1.124B assets, ¥509M revenue), respectively. The abrupt termination followed three progress reports insisting the deal was "advancing smoothly."
**Pre-Surge Stake Transfer** Despite the deal's collapse, Doright's stock soared post-resumption—three days of double-digit gains lifted shares from ¥22 to ¥35. Wei Zhenwen, holding over 50% of shares, saw his net worth jump ~¥1B. Yet curiously, he sold 7.624M shares (5% stake) at ¥17.82/share (total ¥136M) to Hangzhou Morning Start LP on July 11. The LP, established in April 2025, is tied to Liu Xiaodan's Morning Fund.
**Volatile Performance and Repeated IPO Project Delays** Since its 2021 IPO, Doright's earnings have fluctuated wildly—2021 net profit plunged 30%, rebounded 53% in 2022, then dropped 41% in 2023 before surging 150% in 2024. 2025 Q1-Q3 saw revenue and profit decline again by 9.3% and 26.4%, respectively.
Remarkably, its ¥110M IPO-funded "Energy-Saving Equipment Production Line Upgrade" has been delayed four times since 2022, with only 79% completion as of October 2025, citing external disruptions like geopolitical shifts. The project's deadline now extends to October 2026.
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