Yanjiang (300658) stock shows impressive growth amid transformational deal

The market responded positively to the company’s strategic plans: by the close of trading on December 31, 2025, the stock price had increased by 11.68%, reaching 14.82 yuan per share. This dynamic reflects investor expectations of a major corporate transformation announced by the publicly listed company Yanjiang Co., Ltd.

Market Reaction to Strategic Reorientation

The company’s stock showed significant growth following the announcement of ambitious plans. On the evening of January 4, 2026, Yanjiang announced its intention to acquire control of Ningbo Yongqiang Technology Co., Ltd., which was perceived by the market as a positive signal. At the time of the announcement, the company’s market capitalization reached 4.9 billion yuan, demonstrating shareholders’ confidence in the deal’s prospects.

It is important to note that trading of the company’s securities on Chinese exchanges was temporarily suspended starting January 5, 2026. This step was taken to protect investors’ interests from potential negative impacts during the negotiation phase of the deal. The company plans to disclose full details of the plan within no more than 10 trading days.

Ningbo Yongqiang Technology - Acquisition Target

The acquisition is based on a preliminary agreement dated December 31, 2025, with the actual controller of Yongqiang Technology, JIANGQIHE, and partners QIANGYUAN and Ningbo Yuanlu Zai Technology Partnership. Currently, negotiations are active, with parties agreeing on the acquisition share, transaction structure, and other key terms.

Founded in 2019, Yongqiang Technology specializes in the development and manufacturing of microelectronic materials—specifically IC substrates, high-quality display substrates, and high-speed substrates. Its products are used in critical sectors of the modern economy: 5G/6G communications, artificial intelligence, data centers, and vehicle internet systems.

The quality of its products has already been recognized by industry leaders—Yongqiang’s products are certified by top companies including Intel, Huawei, Inspur, Sugon, New H3C, and Accelink. Additionally, the company has successfully attracted investments through several funding rounds, with an valuation exceeding 1 billion yuan, making it an attractive target for asset portfolio expansion.

Yanjiang Co., Ltd.'s Diversification Strategy

On the surface, this acquisition appears to be an inter-industry deal, as Yanjiang Co., Ltd.'s main business focuses on developing and manufacturing materials for hygiene products. However, the company has long signaled intentions to expand its activities. In its 2024 annual report, the company identified its priority as “cautious selection and development of new industries,” demonstrating clear plans for diversification.

In the disposable hygiene products segment, Yanjiang holds a leading position. Its main products—three-dimensional perforated non-woven materials and perforated PE films—are in demand for manufacturing feminine hygiene products and baby diapers. Its regular clients include some of the world’s largest brands: Procter & Gamble, Kimberly-Clark, and Hengan.

Financial Dynamics and Growth Rates

In the first three quarters of 2025, Yanjiang reported revenue of 1.295 billion yuan, representing a 22.99% year-over-year increase. Net profit for the same period was 42.5018 million yuan, with a 27.95% annual growth. Notably, the third quarter’s net profit reached 16.6626 million yuan, demonstrating an explosive 209.1% year-over-year growth.

These figures indicate that the company’s core business is gaining momentum, providing a solid platform for financing and implementing strategic initiatives.

Global Expansion and Capacity Expansion Plans

In recent years, Yanjiang has actively expanded its geographic footprint. The company already has manufacturing facilities in Egypt, the USA, and India. According to its strategic plan, Singaporean subsidiaries “Singapore Holdings” and “Yanjiang International” have been gradually ramping up operations and have been showing positive results since 2022.

In Egypt, the hot production line capacity is estimated at 12,000 tons annually, with confirmed capacity around 10,000 tons. Full capacity is expected to be reached in the first half of 2026. In the US market, commercial production of the hot line is scheduled to begin in 2026.

Regarding profitability, net profit margins for both the parent company and the Egyptian subsidiary increased year-over-year in the first three quarters, with the Egyptian unit showing higher growth rates. The American and Indian subsidiaries are gradually approaching break-even, indicating ongoing operational adjustments abroad.