Dalian Bai'ao Chemical is acquiring a significant stake in Xinhuilian, a semiconductor equipment manufacturer, as part of its strategy to diversify and capture growth opportunities in the emerging tech sector.

Information on the Target

Dalian Bai'ao Chemical Co., Ltd., hereafter referred to as Bai'ao Chemical, announced on October 8, 2024, that its wholly-owned subsidiary, Shanghai Xin'aohua Technology Co., Ltd. (Xin'aohua), plans to invest RMB 700 million in Xinhuilian, acquiring a 46.6667% equity stake. Following this investment, Xin'aohua will hold a total voting control of 54.6342%, turning Xinhuilian into a holding subsidiary and integrating it into the consolidated financial statements of the publicly listed company. This strategic transaction marks a significant move towards diversification for Bai'ao Chemical, which has primarily operated in the industrial biocide sector for over two decades.

Xinhuilian specializes in semiconductor equipment, focusing on tools such as adhesive development machines and lithography systems. Despite facing financial losses in 2022 and 2023, Xinhuilian transitioned to profitability in the first half of 2024, fueled primarily by its remanufacturing business for lithography equipment.

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