A subsidiary acquired over a year ago was named at the "3.15" gala! Multifluor encountered trouble, with its equity relationship actually originating from related-party transactions.

More than a year ago, Duofuduo (002407) invested over 28 million yuan to acquire a 54% stake in Henan Yifeng Electronic New Materials Co., Ltd. (hereinafter referred to as “Yifeng Electronics”), becoming a major shareholder of the company. What investors did not expect was that now, Yifeng Electronics appeared on CCTV’s “3.15” evening show, being named as a problematic company. Even more worth pondering is that the 54% equity transfer that Duofuduo acquired at that time was a related-party transaction, with the counterparty being Duofuduo Group, controlled by Li Shijiang, the controlling shareholder of Duofuduo.

On the evening of March 15, CCTV’s “3.15” evening show exposed issues with bleached chicken claws, mentioning the use of hydrogen peroxide for processing chicken claws and disinfecting utensils. Yifeng Electronics was also investigated for violations such as providing unlabeled food additives and breaching hazardous chemical management regulations. By reviewing the shareholding relationships, Beijing Business Daily reporters quickly found that Yifeng Electronics is a subsidiary of Duofuduo, listed on the A-shares market.

According to business registration information from Tianyancha, Duofuduo, Henan Xingtu Enterprise Management Consulting Partnership (Limited Partnership), Sun Xiaofeng, Henan Polyfluorine New Materials Technology Co., Ltd., and Cui Social Security hold 54%, 25.6%, 14.4%, 4%, and 2% of Yifeng Electronics, respectively.

Reviewing Duofuduo’s historical announcements, its holding period of Yifeng Electronics’ shares was relatively short.

The timeline goes back to January 22, 2025, when Duofuduo announced its intention to acquire a 54% stake in Yifeng Electronics. At that time, Duofuduo stated that Yifeng Electronics is a company engaged in the production and sales of ultra-pure chemical materials and other fine chemical products for the microelectronics industry. The company planned to acquire the 54% stake with its own funds of 28.45 million yuan, which would help diversify its electronic chemicals product portfolio.

Based on the acquisition price at that time, evaluated using the asset-based approach, as of the baseline date October 31, 2024, Yifeng Electronics’ net asset book value was 40.04 million yuan, and the total equity value was 42.70 million yuan, representing a 6.64% increase.

It should be noted that Duofuduo’s investment in Yifeng Electronics was a related-party acquisition. The 54% stake originally belonged to assets of Duofuduo Group, and the actual controller of Duofuduo Group is Li Shijiang, the controlling shareholder of Duofuduo.

This related-party acquisition involved a slight premium. Now, just over a year later, Yifeng Electronics has been named on the “3.15” evening show, and this transaction by Duofuduo is undoubtedly attracting market attention.

Additionally, according to Duofuduo’s acquisition announcement disclosed in January 2025, Yifeng Electronics’ performance was not optimistic, with continued losses from January to October 2024. Specifically, as of October 31, 2024, Yifeng Electronics’ total assets were 64.82 million yuan, and net assets were 40.04 million yuan; revenue from January to October 2024 was 36.26 million yuan, with a net loss of 180,100 yuan. Looking at the 2023 financial data, as of December 31, 2023, Yifeng Electronics’ total assets were 53.94 million yuan, and net assets were 32.52 million yuan; for the full year of 2023, revenue was 53.98 million yuan, with a net profit of 29,560 yuan.

Duofuduo is a leading enterprise in the lithium hexafluorophosphate market in A-shares, mainly engaged in the research, production, and sales of high-performance inorganic fluorides, electronic chemicals, lithium-ion batteries, and related materials.

From a fundamental perspective, in 2024, Duofuduo achieved approximately 8.207 billion yuan in revenue, a decrease of 31.25% year-on-year; corresponding net profit attributable to shareholders was about -308 million yuan, turning from profit to loss. However, the company’s performance is expected to recover in 2025. The 2025 earnings forecast indicates that the company expects to achieve a net profit attributable to shareholders of between 200 million and 280 million yuan, turning profitable year-over-year.

In the secondary market, as of the close on March 13, Duofuduo’s stock price was 30.85 yuan per share, with a total market capitalization of 36.72 billion yuan. The Beijing Business Daily will continue to monitor the developments related to this incident.