More Than Two Months After Terminating Cross-Border High-Speed Cable Business, Jinfutech Again Bets on Liquid Cooling Track, Plans to Acquire 2 Companies for 570 Million Yuan

Amid sluggish growth in its main business, one of China’s major suppliers of plastic anti-theft bottle caps, Jinfu Technology (SZ003018, stock price 28.04 yuan, market value 7.3 billion yuan), has begun seeking new sources of performance growth. This time, Jinfu Technology has turned its attention to the high-growth liquid cooling and heat dissipation sector. After terminating a cross-industry attempt at the end of 2025, the company is once again pursuing mergers and acquisitions, and this time, going even further.

On the evening of March 13, Jinfu Technology disclosed a series of announcements, revealing plans to acquire 51% stakes in Foshan Zhuohui Metal Products Co., Ltd. (hereinafter referred to as Zhuohui Metal) and Foshan Lianyi Thermal Energy Technology Co., Ltd. (hereinafter referred to as Lianyi Thermal) for a total cash consideration of 571 million yuan. The transaction price for Zhuohui Metal’s 51% stake is 408 million yuan, and for Lianyi Thermal’s 51% stake, it is 163.2 million yuan.

The “Daily Economic News” reporter noted that this deal involves a high premium and a complex binding scheme, including the controlling shareholder and actual controller of Jinfu Technology, Chen Jinpei, transferring 6% of the listed company’s shares to the transaction counterparty. Chen Jinpei also promised to provide a final performance guarantee for the transaction counterparties and that the acquisition of the two target companies cannot be split up.

Agreements that the two acquisitions “must not be implemented separately”

In February this year, Jinfu Technology announced plans to acquire 51% stakes in Zhuohui Metal and Lianyi Thermal, with proposed transaction prices not exceeding 510 million yuan and 204 million yuan respectively, totaling no more than 714 million yuan. However, the announcement on the evening of March 13 indicated that the final prices were significantly lower than the previously estimated maximums.

The announcement shows that both target companies focus on the liquid cooling and heat dissipation field, mainly engaged in the research, development, production, and sales of liquid cooling modules and precision structural components. Zhuohui Metal’s main clients include Qihong Electronics and Baode Technology, while Lianyi Thermal’s clients include Baode Technology and Shuanghong Electronics.

It should be noted that the transaction counterparts for the two acquisitions are not exactly the same. The counterparts for the Zhuohui Metal acquisition are Mo Zhenlong, Zhou Chao, and Yang Ke, while those for Lianyi Thermal are Yang Ke, Mo Zhenlong, Yin Shaojun, Zhou Chao, and Cai Ling.

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Image source: Announcement screenshot

The “Daily Economic News” reporter observed that the transaction counterparts also signed supplementary acquisition agreements with Jinfu Technology, stipulating that the two acquisitions must not be implemented separately. The effectiveness and performance of either transaction depend on the other, and both transactions will be completed and implemented simultaneously.

Jinfu Technology stated that before this transaction, the company mainly engaged in the research, design, production, and sales of packaging products used in beverages and food. After this transaction, the company will enter the high-growth liquid cooling and heat dissipation sector, forming a second growth curve.

The reporter found that not long ago, Jinfu Technology responded to investors’ questions about the company’s development strategy, stating that on one hand, the company had achieved revenue and profit growth through acquisitions in 2021. On the other hand, the company’s original main business faces fierce competition, and long-term development considerations are necessary.

Valuation with low added value also up to 9 times

The “Daily Economic News” reporter discovered that, to acquire the two targets, both parties set many conditions, with Jinfu Technology’s controlling shareholder Chen Jinpei providing the final performance guarantee for the transaction counterparties. Meanwhile, Mo Zhenlong, the transaction counterparty, will also provide a pledge of equity as collateral.

For example, the transaction plan stipulates that Chen Jinpei will transfer 15.6 million shares of the listed company to Mo Zhenlong via agreement transfer, accounting for about 6% of the total shares. After the transfer is completed, Mo Zhenlong plans to pledge his 6% stake in the listed company to Chen Jinpei. Additionally, if the transaction counterparties fail to meet the performance commitments and do not make full compensation by the end of the performance period, Chen Jinpei promises to make up the remaining compensation to the company.

According to the announcement, the actual net profit of the target companies in 2026 should not be less than 110 million yuan, and the cumulative net profit for 2027 and 2028 should not be less than 280 million yuan. In the first ten months of 2025, Zhuohui Metal achieved revenue of 228 million yuan and net profit of 53.4 million yuan. Lianyi Thermal’s figures were 82.4 million yuan and 12.9 million yuan respectively.

Furthermore, the valuation appreciation rate for this transaction is also noteworthy. According to the announcement, as of October 31, 2025, based on the income approach, the total equity value of Zhuohui Metal and Lianyi Thermal was assessed at 801 million yuan and 325 million yuan respectively. Compared to their book net assets at that time, the appreciation rates were as high as 990.86% and 2083.07%.

Image source: Announcement screenshot

In fact, this transaction comes less than three months after Jinfu Technology’s previous failed cross-industry attempt. On December 27, 2025, Jinfu Technology announced that the plan to acquire Guangdong Lanyuan Technology Co., Ltd., a high-speed cable company, was terminated due to “the parties failing to reach consensus on key terms.” Compared to the “quick retreat” last time, this acquisition process from framework agreement to formal signing appears more resolute.