NBTM New Materials has resumed its review of the restructuring plan to acquire the remaining stake in its controlled subsidiary Shanghai Future. The transaction is priced at 673 million yuan, with the target's appraisal value reflecting a premium of 105.44 percent. When NBTM increased its stake in Shanghai Future in February 2025, the overall valuation was 1.353 billion yuan. The latest appraisal, based on the end of 2025, has risen to 1.938 billion yuan, marking a 43 percent increase within one year. The appraisal firm used the income approach to arrive at a valuation of 1.648 billion yuan, which differs by 504 million yuan from the result under the asset-based approach, a discrepancy of 44.08 percent. The Shanghai Stock Exchange has issued an inquiry letter regarding the reasonableness of the valuation. The market has questioned the applicability of the income approach, given that Shanghai Future's net profit fluctuated sharply from 2021 to 2023, and the appraisal assumptions appear optimistic, including a long-term stable gross margin of 22.99 to 23.95 percent and a discount rate of 9.28 percent, which is below the industry average of 11.53 percent. In addition, the write-off of a long-term payable of approximately 290 million yuan directly pushed the target's valuation up to 1.938 billion yuan. The performance commitment requires Shanghai Future to achieve cumulative net profit attributable to the parent, excluding non-recurring items, of no less than 693 million yuan from 2026 to 2028.
NBTM New Materials Group Co LtdValuation method disputed, SSE inquiry, optimistic assumptions, and 43% valuation jump raise concerns about overpayment and deal fairness.
Target valuation increased 43% to 1.938 billion yuan, implying higher worth for Shanghai Future.