Dongtu Technology terminates acquisition of Gao Wei Ke, who has failed to go public multiple times.

Ask AI · Why does Dongtu Technology choose a cooperation model of first collaborating and then acquiring?

China Economic Journalists Gu Mengxuan Li Zhenghao Guangzhou Beijing Report

Wu Qing Another example of a terminated acquisition by a listed company. Recently, Dongtu Technology (300353.SZ) announced that the company’s board of directors approved the proposal to terminate the plan for issuing shares and paying cash to purchase assets and raise supporting funds (hereinafter referred to as “the termination of the acquisition”).

On the same day, Dongtu Technology also announced that it had decided to sign a “Strategic Cooperation Agreement” with Beijing Gaowei Ke Electric Technology Co., Ltd. (hereinafter referred to as “Gaowei Ke”) and, based on the progress of both parties’ collaboration, to restart the overall acquisition.

The “China Business Journal” reporter noted that both parties involved in this acquisition are profitable. Although Dongtu Technology experienced losses in the first three quarters of 2025, according to its earnings forecast, the company is expected to be profitable for the full year of 2025.

The reporter also observed that the target company, Gaowei Ke, has previously failed multiple times to go public. This time, they chose a “detour” to rescue the situation but ultimately shifted to strategic cooperation.

To further understand the details related to the termination of this acquisition, the reporter contacted Dongtu Technology by phone and email, but as of the time of publication, the company has not responded.

First collaborate, then integrate

At the investor briefing held on March 31 regarding this acquisition, Dongtu Technology stated that the main reason for terminating the acquisition of Gaowei Ke was that the business collaboration between both sides was still in the verification stage, and the technical integration and large-scale commercialization still required time. To genuinely protect the interests of the listed company and all shareholders, after careful assessment during investor relations activities, the company decided to postpone the major asset restructuring.

Senior corporate management expert and senior consultant Dong Peng told the reporter that the core reason for terminating the acquisition was that Dongtu Technology, under the dual pressures of industry cycle and capital constraints, made a key decision to shift from “transaction thinking” to “strategic thinking.”

Specifically, Dong Peng pointed out: First, the external industrial automation industry is entering a deep adjustment period, and the original plan’s collaboration realization cycle can no longer match the current market rhythm, making forced integration risky; second, the company itself is in a loss-making state, and by issuing shares to bring future expectations forward for capitalization, if the realization path lengthens, it will significantly dilute existing shareholder value.

The reporter noted that on the same day Dongtu Technology announced the “Proposal for Terminating the Acquisition,” it also issued the “Resolution Announcement of the 19th Meeting of the Seventh Board of Directors” (hereinafter referred to as “the announcement”). The announcement stated that, considering industry development changes, the realization cycle of collaboration results, and the pace of obtaining large orders, among other objective factors, to more stably release collaborative value and reduce integration risks, after friendly consultation, both sides decided to terminate the original major asset restructuring and sign a “Strategic Cooperation Agreement,” and based on the progress of collaboration, to restart the overall acquisition.

What is Dongtu Technology’s intention in terminating the acquisition and signing the “Strategic Cooperation Agreement”?

Dongtu Technology stated at the investor briefing that the company believes that both parties in the acquisition have strong complementarities in industrial control and industrial communication fields, and the cooperation foundation is good. Therefore, they chose to sign the “Strategic Cooperation Agreement,” to first carry out business cooperation and collaborative verification, gradually promote technological integration and market expansion, and consider further arrangements when conditions are mature. This arrangement helps reduce integration risks and enhances the certainty of future cooperation.

Nanning College financial expert and PhD Shi Lei told the reporter that the core reason for terminating this acquisition is that both sides decided to adopt a more cautious phased cooperation model of “first collaboration, then integration.”

Given that business integration involves deep integration across multiple fields and a longer cycle, and that the collaborative value still needs time to be further reflected in customer verification, large order acquisition, and operational results, both sides decided to delay a “one-step” acquisition and instead sign a “Strategic Cooperation Agreement,” establishing a path of “collaboration first, phased integration, and innovative fusion,” planning to restart the overall acquisition after the effects of business collaboration become clear.

High Zengyang, a special researcher at the Shangshang Bank, told the reporter that shifting from acquisition to strategic cooperation is Dongtu Technology’s way of balancing collaborative value and integration risk.

The reason is that although the business collaboration between both sides has been preliminarily verified, it has not yet achieved large-scale implementation. Direct acquisition at this point might cause performance fluctuations due to the long cycle of technology and business integration. Through strategic cooperation, they can implement “first collaboration, then integration” gradually, at lower cost and with more flexible mechanisms, further verifying the collaborative value.

The core advantage of this cooperation model is that it can reduce corporate integration risks, shorten decision-making chains, and offer high flexibility and adaptability, while reserving the right to pursue acquisition in the future. “Once the collaboration effects meet expectations, a smooth transition to acquisition integration can be achieved, ensuring short-term performance stability and aligning with long-term strategic layout. This is a typical phased approach to industry integration,” said Gao Zhengyang.

Both parties are profitable

Public information shows that before this transaction, Dongtu Technology focused on core technologies of industrial networks and intelligent control, promoting software-defined control technology and full IP industrial networks, integrating industrialization and informatization technologies. The company’s main products include industrial operating systems and related software services, intelligent controllers and solutions, and industrial network communications.

Gaowei Ke is a high-tech enterprise specializing in industrial automation, digital comprehensive services, and core product R&D, manufacturing, and sales of automation control systems, providing automation solutions for manufacturing clients over the long term.

On November 1, 2025, Dongtu Technology issued the “Preliminary Plan for Issuing Shares and Paying Cash to Purchase Assets and Raising Supporting Funds” (hereinafter referred to as “the plan”).

Dongtu Technology stated in the plan that after this acquisition, the company’s independently controllable, industrial artificial intelligence-oriented new generation intelligent control products can be rapidly promoted to more industrial sectors by integrating Gaowei Ke’s rich industry application experience and extensive market channels, improving the localization rate of core control technologies in equipment manufacturing, especially in high-end equipment manufacturing, and accelerating the transformation and upgrading of China’s new industrialization.

Regarding Dongtu Technology’s motivation for the acquisition, Gao Zhengyang analyzed that the core logic of the previous plan to acquire Gaowei Ke was to achieve technological and market channel synergy and complementarity.

Gao Zhengyang said that Dongtu Technology owns an independently controllable industrial network and intelligent control platform, while Gaowei Ke has been deeply engaged in industrial automation services for many years, accumulating rich customer resources and mature channel networks.

“This acquisition plan allows Dongtu Technology’s intelligent control technology to rely on Gaowei Ke’s industry experience to quickly adapt to various manufacturing scenarios; at the same time, Gaowei Ke’s industry application data can also feed back into Dongtu Technology’s technological upgrades,” Gao Zhengyang said.

From an operational performance perspective, according to the plan, Dongtu Technology’s net profits from 2022 to 2024 were 14.25 million yuan, 260 million yuan, and 42.5 million yuan respectively. In the first three quarters of 2025, the net profit was -152 million yuan.

According to Dongtu Technology’s recent earnings forecast, in 2025, the company expects to achieve a profit, with net profit attributable to the parent of 70 million to 105 million yuan, an increase of 81.19% to 171.78% year-on-year; non-recurring net profit attributable to the parent of 14 million to 21 million yuan, an increase of 51.61% to 127.41%.

The target of this terminated acquisition, Gaowei Ke, is in a weak profit state. According to the plan, net profits in 2023 and 2024 are expected to be 57.7 million yuan and 13.36 million yuan respectively. In the first three quarters of 2025, Gaowei Ke’s net profit was 3.25 million yuan.

What impact will acquiring Gaowei Ke or signing the “Strategic Cooperation Agreement” have on Dongtu Technology’s performance?

Gao Zhengyang pointed out that the impact of this acquisition on Dongtu Technology’s operations may need to be viewed dialectically from both short-term financial performance and long-term strategic value.

If the acquisition of Gaowei Ke proceeds smoothly, the company will still go through a period of business integration initially, which may exert some short-term pressure on profits; but as the synergy effects gradually emerge—such as jointly developed solutions expanding high-margin businesses, relying on localization to reduce core procurement costs, and expanding revenue through channel sharing—the company’s medium- and long-term revenue structure and profitability are expected to improve substantially.

“Meanwhile, the impact of strategic cooperation on the company’s profit statement is more moderate,” Gao Zhengyang said. It can verify the business model’s feasibility while effectively controlling financial risks, and contribute revenue through specific project cooperation. Compared to direct acquisition, this approach may better meet the current operational needs of the enterprise.

The target of the acquisition is questioned as a “wholesaler”

The reporter found that Gaowei Ke’s troubled listing journey is one of the most bumpy scripts in A-shares. Since 2011, it has failed three times in independent IPO attempts, and this time’s acquisition also ended in failure.

In 2011, Gaowei Ke first applied for an IPO, but was directly rejected by the CSRC in January 2012. The main reason was governance issues, with frequent changes in the board of directors within three years. In 2015, Gaowei Ke attempted to list on the Shanghai Stock Exchange’s main board again but withdrew voluntarily in January 2018. At that time, Gaowei Ke’s net profit was only 18 million yuan, far below the listing threshold.

In 2022, Gaowei Ke switched to the ChiNext board, and successfully got approval in September 2023. However, during the one-year waiting period for registration, new regulations on the ChiNext increased the financial thresholds, requiring net profits of no less than 60 million yuan in the most recent year. Coupled with Gaowei Ke’s declining performance at that time, it ultimately withdrew voluntarily in September 2024, ending its IPO dream.

After the prospect of independent listing was lost, Gaowei Ke turned to the “being acquired by a listed company” route, leading to Dongtu Technology’s current acquisition plan. However, on March 27, 2026, Dongtu Technology announced the termination of this major asset restructuring.

Regarding Gaowei Ke’s rocky listing path, Shi Lei told the reporter that Gaowei Ke’s more than ten-year listing journey was full of obstacles, with three failed IPO attempts mainly due to doubts about its business model and sharp decline in profitability.

Shi Lei analyzed that over 60% of Gaowei Ke’s revenue comes from agency distribution, making it more like a “wholesaler” rather than an innovative enterprise, and it heavily relies on upstream suppliers. Meanwhile, the company’s net profit sharply dropped from 57.7 million yuan in 2023 to 3.25 million yuan in the first three quarters of 2025, with thin margins and deteriorating performance that cannot support its independent listing financial requirements.

The reporter noted that recently, the capital market has seen multiple cases of companies attempting to “rescue themselves” via being acquired by listed companies, such as Lingzhi Software acquiring Kaimairde, which also failed multiple times to go public and ultimately chose to be acquired, though this acquisition was also terminated.

Shi Lei believes that being acquired by a listed company is a rational choice for companies seeking a “curve to go public.” It can help resolve funding and gambling pressures, achieve capital exit, and provide listed companies with high-quality targets that are financially compliant and reasonably valued, aiding their transformation and upgrading.

“However, this path is fraught with opportunities and risks,” Shi Lei said. Valuation disagreements are the primary reason for transaction failures, and post-merger challenges such as technology and team integration, as well as potential goodwill impairment risks, test the quality of the acquisition. Therefore, this should not be seen as a fallback for IPO failure; its success ultimately depends on the quality of the target, strategic fit, and integration capability.

Gao Zhengyang pointed out that from the perspective of industrial capital, mergers and acquisitions provide diversified paths for enterprises to enter the capital market. For the acquired party, it offers another route for value realization and sustained development. For listed companies, M&A provides opportunities for external expansion and industry integration, helping them quickly acquire key industry resources and complete industrial layouts.

Gao Zhengyang also warned that potential issues during mergers and acquisitions—such as unhealthy acquisitions, overvalued targets, lack of genuine industry synergy, and a focus solely on capital—could harm the legitimate rights and interests of shareholders. “Therefore, enterprises engaging in M&A should return to industry logic, focus on real collaborative value, emphasize long-term investment returns, and achieve win-win development,” Gao Zhengyang concluded.