Core Viewpoint - Defu Technology is undergoing significant capital operations, planning to raise 1.93 billion yuan through a private placement while simultaneously witnessing substantial share reductions by major shareholders, raising concerns about the implications of this "simultaneous placement and reduction" phenomenon [1] Group 1: Capital Operations - Defu Technology disclosed a private placement plan on September 16, 2025, intending to issue no more than 189 million shares to raise 1.93 billion yuan, with 1.43 billion yuan allocated for acquiring 100% equity of Luxembourg Copper Foil, 200 million yuan for electronic chemical projects, and 300 million yuan for supplementary working capital [1] - The planned issuance price for the private placement will not be lower than 80% of the average trading price of the company's stock over the 20 trading days prior to the pricing benchmark [1] Group 2: Shareholder Reductions - Since 2024, several original shareholders of the company have gradually reduced their holdings, with LG Chem reducing 12.84 million shares in total during the third and fourth quarters of 2024 and the first quarter of 2025 [1] - On September 25, 2025, the actual controller of Defu Technology, Ma Ke, announced a high-level reduction of shares, holding 192,588,725 shares, which accounts for 30.55% of the total share capital [1] - Many of the reduction actions occurred after a significant increase in Defu Technology's stock price, which surged by 170% since the beginning of 2025, particularly rising by 172.99% from June 20 to August 13 [1] Group 3: Financial Performance - In the first half of the year, Defu Technology reported revenue of 5.299 billion yuan, a year-on-year increase of 66.82%, and a net profit attributable to shareholders of 38.7062 million yuan, marking a turnaround from losses [1] - Despite the apparent improvement in performance, the net cash flow from operating activities was -570 million yuan, continuing a trend of negative cash flow for several years, with net cash flows of -310 million yuan, -372 million yuan, -477 million yuan, and -550 million yuan from 2021 to 2024 respectively [1]

Group 1 - The company is actively pursuing a large-scale financing plan while significant shareholders are frequently reducing their holdings [1][2] - The company plans to raise up to 710 million yuan (approximately 100 million USD) through a private placement of A-shares, which is about 43% of its latest net assets [1] - A major shareholder, controlled by the actual controller of the company, reduced its holdings by 3,726,600 shares, amounting to approximately 123 million yuan (around 17 million USD), bringing the controlling shareholder's stake below 50% [1][2] Group 2 - The recent reduction in holdings is part of a series of sell-offs that began in 2025, with directors and senior management also participating due to "personal funding needs," resulting in over 53.8 million yuan (about 7.5 million USD) in cashing out [2] - The simultaneous occurrence of private placement and share reduction raises questions about the rationality of the company's capital operation strategy, suggesting that insiders may have a conservative view on the company's current valuation or future prospects [2] - The company's stock price has surged by 398% over the past year, creating a favorable environment for shareholder reductions, and the timing of the financing plan at a high stock price allows for more funds to be raised with less dilution [2]

Core Viewpoint - Defu Technology is undergoing significant capital operations, including a planned private placement to raise 1.93 billion yuan while simultaneously witnessing substantial share reductions by major shareholders, raising concerns about the implications of this "simultaneous placement and reduction" phenomenon [1][3]. Group 1: Capital Operations - Defu Technology plans to issue up to 189 million shares in a private placement to raise 1.93 billion yuan, with 1.43 billion yuan allocated for acquiring 100% equity of a Luxembourg copper foil company, 200 million yuan for electronic chemical projects, and 300 million yuan for working capital [1]. - The private placement price will not be lower than 80% of the average stock price over the 20 trading days prior to the pricing date, which sets a lower limit of approximately 28.32 yuan per share based on the current stock price of 35.4 yuan [1][3]. Group 2: Shareholder Reductions - Since 2024, several original shareholders have been reducing their stakes, with LG Chem reducing 12.84 million shares and Ganfeng Lithium reducing nearly 2.3 million shares [1]. - In July 2025, Gansu Tuozhen Equity Investment Fund and its concerted parties announced plans to reduce up to 21.44 million shares, representing 3.4% of the total share capital, potentially cashing out around 527 million yuan at a stock price of 24.6 yuan [1]. Group 3: Stock Performance and Market Reaction - Defu Technology's stock price has surged by 170% since the beginning of 2025, with a notable increase of 172.99% from June 20 to August 13 [2]. - The simultaneous high-level reductions by shareholders and the upcoming private placement may indicate that the current stock price is overvalued, as the significant price increase has prompted investors to seek optimal exit strategies [3]. Group 4: Financial Performance - In the first half of the year, Defu Technology reported revenue of 5.299 billion yuan, a year-on-year increase of 66.82%, and a net profit attributable to shareholders of 38.71 million yuan, marking a turnaround from previous losses [4]. - Despite the apparent improvement in performance, the company has reported negative net cash flow from operating activities for several consecutive years, indicating insufficient actual cash generation capacity [4].