Core Viewpoint - Huafeng Chemical (SZ002064) announced plans to acquire 100% equity of Zhejiang Huafeng Synthetic Resin Co., Ltd. and Zhejiang Huafeng Thermoplastic Polyurethane Co., Ltd. through a combination of share issuance and cash payment, but the acquisition was terminated due to insufficient shareholder approval [1][11]. Group 1: Acquisition Details - The total consideration for the acquisition was set at 6 billion yuan in cash and 54 billion yuan in shares, with a proposed issuance of 879 million shares, representing 15.05% of the post-issue total share capital [2][4]. - The valuation reports indicated a significant premium, with Huafeng Synthetic Resin's equity valued at 4.045 billion yuan, reflecting a 506.96% premium over its book value, and Huafeng Thermoplastic's equity valued at 1.963 billion yuan, with a 478.49% premium [2][5]. Group 2: Financial Performance - Huafeng Chemical has experienced a decline in net profit for three consecutive years, with a 10.43% decrease in net profit year-on-year, despite a 2.41% increase in revenue last year [5][12]. - In contrast, Huafeng Synthetic Resin reported a revenue of 3.234 billion yuan and a net profit of 342 million yuan for 2024, while Huafeng Thermoplastic achieved a revenue of 3.181 billion yuan and a net profit of 163 million yuan [6][9]. Group 3: Shareholder Response - During the shareholder meeting, only 47.04% of the votes supported the acquisition proposal, with a significant portion of shares abstaining, primarily from "northbound" funds, indicating a lack of support for the transaction [11][12]. - The company acknowledged that the high abstention rate contributed to the failure of the proposal, and it plans to reassess the acquisition strategy, potentially increasing the cash component in future negotiations [12][10].

Core Viewpoint - Huafeng Chemical's 19 proposals related to a 6 billion yuan acquisition were collectively rejected, impacting its strategic expansion in the polyurethane industry [1][2]. Group 1: Acquisition and Market Impact - The proposed acquisitions aimed to enhance Huafeng Chemical's product matrix across multiple key segments of the polyurethane industry, facilitating vertical integration from raw materials to end products [2]. - The TPU market is experiencing rapid growth, with a global market size of $3.804 billion in 2023, projected to reach $5.83 billion by 2030, reflecting a CAGR of 6.5% from 2024 to 2030 [2]. Group 2: Competitive Landscape - Major global manufacturers in the TPU sector include BASF, Covestro, Huntsman, Lubrizol, Wanhua Chemical, Huafeng Chemical, and Merck, all actively expanding their production capacities [3]. - Covestro announced a multi-million euro investment in a TPU production base in Zhuhai, Guangdong, aiming for an annual capacity of nearly 120,000 tons [3]. Group 3: Innovations and Applications - The TPU industry is diversifying with innovations such as high-performance paint protection films (PPF) launched by Covestro in collaboration with Shell and others, entering the supply chains of major automotive brands [5]. - The demand for high-quality PPF is rapidly increasing, with consumers seeking enhanced protection features and sustainability [6]. Group 4: Bio-based TPU Developments - Bio-based TPU is emerging as a significant trend, with companies like Wanhua Chemical and BASF developing products from renewable resources, enhancing their competitive edge in sustainability [7][9]. - BASF has initiated a strategy combining product innovation, closed-loop production, and global certification to strengthen its position in the bio-based TPU market [7].