Fengguang Co. announced plans to acquire a 90% equity stake in Anhui Ruihua New Materials Co., Ltd. for 81 million yuan in cash. After the transaction, Ruihua New Materials will become its controlled subsidiary. Ruihua New Materials is the first domestic company to achieve the third-generation high-temperature continuous tubular process for stearate production, with a total capacity of about 80,000 tonnes. In 2025, it recorded revenue of 324 million yuan and net profit of 9.1255 million yuan, but in the first quarter of 2026, revenue was 86.7585 million yuan with a net loss of 1.8635 million yuan. The counterparty committed that Ruihua New Materials' cumulative net profit from 2026 to 2028 will be no less than 21.3093 million yuan. Fengguang Co. itself reported net losses of 62.3544 million yuan, 48.6177 million yuan, and 622,300 yuan for 2024, 2025, and the first quarter of 2026, respectively. On July 17, its closing share price fell 9.57% to 16.16 yuan, with a total market capitalization of 3.252 billion yuan.
Yingkou Fengguang Advanced Material Co.Ltd.Fengguang plans to acquire 90% of Ruihua for 81 million yuan; Ruihua is profitable but recently loss-making, and Fengguang itself has been loss-making; market reacted negatively with 9.57% share price drop.
Ruihua is being acquired at a valuation that implies a premium; it is the first domestic producer of third-generation stearate with 80,000 tonnes capacity and has positive net profit in 2025.