Haitai Tech plans to acquire a controlling stake in Xuyu Shares

By a reporter from our newspaper, Liu Zhao

On the evening of April 6, Qingdao Haitai Ke Molded Plastic Technology Co., Ltd. (hereinafter referred to as “Haitai Ke”) issued an announcement stating that the company is currently planning to issue shares and pay cash to acquire assets, and will simultaneously raise supporting funds. The company intends to obtain control of Qingdao Xuyu Geosynthetic Materials Co., Ltd. (hereinafter referred to as “Xuyu Shares”). To avoid abnormal fluctuations in the share price and to safeguard the interests of investors, the company’s stock will be suspended from trading starting from the opening of business on April 7. The company expects to disclose the transaction plan for this deal and apply for resumption of trading before April 21. If the disclosure is not completed on schedule, the company’s stock will also resume trading starting from the opening of business on April 21, and the related matter will be terminated.

Based on the information disclosed at present, Haitai Ke has already signed a “Memorandum of Cooperation on Equity” with the major counterpart(s), and has initially reached an intention to purchase assets. The announcement shows that the transaction is expected not to constitute a related-party transaction, and is also not expected to constitute a material asset restructuring.

Haitai Ke seeks expansion beyond its core

One important background for why this acquisition has attracted market attention is that Haitai Ke’s current own operating performance has already shown a clear improvement. The company’s previously disclosed 2025 performance forecast indicates that the net profit attributable to shareholders of listed companies is expected to be between RMB 51.50 million and RMB 66.80 million, representing an increase of 226.86% to 323.97%. The net profit after deducting non-recurring gains and losses is expected to be between RMB 37.00 million and RMB 48.00 million, representing an increase of 353.30% to 488.06%.

A person in charge of Haitai Ke stated that the growth in performance mainly benefits from higher industry sentiment, the gradual release of production capacity from its first-offering fund-raising and investment projects, continuous growth in orders, as well as stronger cost control and reduced pressure from finance costs.

At this time, the company pushing forward an acquisition is more like proactively seeking new growth drivers on the basis of a rebound in its main business. Public information shows that Haitai Ke has long been deeply engaged in the field of automotive molds and related plastic products, with its business closely linked to the automotive industry chain. For manufacturers of this kind, fluctuations in the prosperity of a single track, changes in downstream customer demand, and evolution in the competitive landscape often have a relatively direct impact on operating performance. Entering new sub-segments through acquisitions, expanding asset and profit sources, and strengthening the ability to withstand cyclical risks has become an important route for many manufacturing-listed companies to seek breakthroughs in growth.

Xing Xing, Chief Economist of Jin Donghui Enterprise Management Development (Beijing) Co., Ltd., said to a reporter from Securities Daily that, judging from the transaction framework, Haitai Ke uses a “shares + cash” approach to advance the acquisition, and also raises supporting funds in parallel. This shows that the company is not only aiming to obtain control, but rather hopes to make a systematic layout around subsequent integration, business expansion, and capital arrangements. On the one hand, such arrangements help balance the pressure of cash outlays; on the other hand, they also leave room for the integration of resources later. Especially against the backdrop of the capital market paying more attention to acquisition quality and integration effectiveness, whether a listed company can truly build sustainable growth capability through external acquisitions has become an important standard by which the market evaluates transaction value.

For this reason as well, beyond its existing automotive mold main business, Haitai Ke is expected to gradually cultivate new business support points. If the subsequent integration goes smoothly, this deal could help the company move from a single manufacturing business toward a diversified manufacturing platform.

The fundamentals of the target are relatively solid

As the target of this transaction, Xuyu Shares mainly engages in the R&D, production, and sales of geotechnical synthetic materials. Its core products include geogrids, geocells, and so on.

From an operational perspective, Xuyu Shares has a certain degree of growth potential. In 2025, it achieved operating revenue of RMB 280 million, representing a year-on-year increase of 27.80%. The net profit attributable to shareholders of the listed company was RMB 43.58M, up 25.34% year on year. The net profit after deducting non-recurring gains and losses grew 42.45% year on year. Among them, geogrid products remain the main source of revenue, and overseas business revenue has also maintained growth. According to the annual report, the company has established overseas sales networks covering regions such as Asia, Africa, Europe, North America, South America, and Oceania, and its products are sold to more than 50 countries and regions worldwide.

From a business nature perspective, Haitai Ke and Xuyu Shares are not traditional upstream-downstream relationships. One mainly serves the automotive industry chain, while the other places greater emphasis on infrastructure construction and engineering materials. However, this does not mean that the two sides lack a basis for synergy. Specifically, both companies are manufacturing enterprises, and both emphasize R&D, process, quality, and delivery capabilities. There are strong commonalities between them in terms of production organization, cost control, supply chain management, and expanding overseas customers.

When interviewed by a reporter from Securities Daily, Zhan Junhao, a partner of Fuzhou Gong Sun Ce Public Relations Consulting Co., Ltd., said that both sides are closely related to the processing and application of high-molecular materials. Haitai Ke focuses on automotive molds and plastic components, while Xuyu Shares is deeply engaged in geotechnical synthetic materials based on material systems such as polypropylene and polyethylene. Although the end-application scenarios differ, there is still certain room for integration in material understanding, process optimization, equipment investment, and lean manufacturing. In addition, both companies are located in Qingdao, and both have a certain foundation for “going global.” In the future, there may be further linkage in areas such as the integration of regional resources, opening up overseas markets, and empowering capital platforms.

Of course, cross-industry acquisitions are never just a simple addition on the balance sheet. Haitai Ke and Xuyu Shares have significant differences in customer structure, industry logic, and sales models. Whether the deal can ultimately achieve “1+1>2” depends crucially on the effectiveness of the subsequent integration.