Huayi Group to Acquire 60% Stake in San Ai Fu for Strategic Expansion in Fluorochemical Industry

On March 17, 2025, Huayi Group announced its intention to acquire a 60% stake in San Ai Fu New Materials Co., Ltd. (referred to as San Ai Fu) from its parent company, Shanghai Huayi Holding Group Co., Ltd. (hereafter Shanghai Huayi), through a cash transaction. This acquisition is seen as a strategic move to enhance Huayi Group’s positioning in the fluorochemical sector.

Shanghai Huayi, which holds 36.99% of Huayi Group’s shares, is also the sole owner of San Ai Fu, making this transaction a related party deal. In its announcement, Huayi Group emphasized that this acquisition aims to further its strategic layout within the fluorochemical industry, enhancing overall competitiveness and achieving synergy. If successfully implemented, this deal would expand Huayi Group's portfolio in high-barrier products such as fluoropolymers and fluorochemical fine chemicals, effectively strengthening its profit-generating capabilities.

The announcement details that the collaboration with San Ai Fu will focus on product development, market expansion, and operational management, leveraging combined resources to boost Huayi Group’s competitiveness in the fluorochemical market and enhance future growth potential, thus maximizing shareholder value.

San Ai Fu is known for its specialization in the research, development, production, and operation of various fluorinated chemicals, including fluoropolymers, fluorochemical fine chemicals, and fluorinated refrigerants. As of December 31, 2024, San Ai Fu reported an unaudited net asset value of 5.91 billion yuan attributed to parent company shareholders.

Huayi Group also noted that the acquisition is still in the planning phase and requires approval from the board of directors and the shareholders’ meeting. Additionally, the evaluation results must be submitted for record or approval by the state-owned assets supervision and administration authority or its authorized unit, introducing some uncertainty into the process.

On the same day, Huayi Group announced that it received a notification from its controlling shareholder, Shanghai Huayi, indicating plans to increase its holdings of Huayi Group’s A-share stock through centralized bidding within six months. The total investment is expected to be no less than 150 million yuan (inclusive) and not more than 300 million yuan (exclusive), while also not exceeding 2% of the company’s total share capital.