ORIENTAL YUHONG(SZ:002271) Ge Long Hui A P P·2025-11-20 11:17Core Viewpoint - The company, Dongfang Yuhong, is advancing its internationalization strategy by acquiring a 60% stake in Brazilian company Novakem, aiming to expand its presence in the Latin American market and enhance its overseas business operations [1][3]. Group 1: Acquisition Details - Dongfang Yuhong's wholly-owned subsidiary in Brazil plans to invest approximately 108 million Brazilian Reais (around 144 million RMB) to acquire the stake in Novakem, with the final transaction amount subject to adjustments based on operational capital and net debt at the time of closing [1]. - The acquisition agreement was signed on November 19, 2025, in Brazil, involving several individual sellers [1]. Group 2: Market Context - Brazil is the largest economy in Latin America, characterized by a stable political environment and a well-established legal system, making it an attractive destination for foreign investment, particularly from Chinese enterprises [2]. - The construction and infrastructure market in Brazil is rapidly developing, with strong and sustained demand for cement additives and high-performance concrete admixtures [2]. Group 3: Strategic Objectives - The acquisition aligns with the company's vision to become the most valuable enterprise in the global construction materials industry, leveraging Novakem's strengths in the additives sector to enhance its market position in Brazil and Latin America [3]. - The company aims to deepen its industry moat and create new profit growth points by capitalizing on Brazil's vast construction market, mineral resources, and economic growth prospects [3]. - The transaction is expected to synergize Novakem's brand influence, experienced management, and customer resources with the company's core competencies in technology research and development, product expansion, and supply chain integration [3].