HONG KONG, Oct. 1, 2026 /PRNewswire/ — On 30 September 2026, Global New Material International Holdings Limited ("GNMI" or the "Company", together with its subsidiaries, the "Group"; stock code: 06616.HK) announced that, in respect of the transaction under which the Company acquires approximately 29.89% of the shares of Zhejiang Jihua Group Co., Ltd. ("Zhejiang Jihua", stock code: 603980.SH; together with its subsidiaries, the "Jihua Group") through Tonglu Junheng Equity Investment Partnership (Limited Partnership) ("Junheng LLP"), the registration of the share transfer was completed with China Securities Depository and Clearing Corporation Limited, Shanghai Branch on 29 September 2026. Subsequent arrangements, including the reorganisation of the board of directors of Zhejiang Jihua, will proceed in accordance with the relevant procedures.
Turning the clock back to 6 February 2026, the date on which the acquisition agreement was signed: from signing to share transfer, the transaction took approximately eight months, passing through reviews by the stock exchanges in both jurisdictions, funding arrangements and the share transfer. It stands as one of the more smoothly executed cases in recent years of a Hong Kong-listed company acquiring control of an A-share listed company.
At first glance, market attention tends to focus on the consideration of RMB1,495 million paid to secure control of an A-share listed company. Looking beyond the capital transaction, however, a clear industrial logic emerges. As a global leader in surface performance materials, GNMI has consistently pursued organic growth alongside external M&A and integration. The acquisition of a controlling stake in Jihua Group continues the development path established by its earlier acquisitions of CQV and SUSONITY, which broadened the Group’s product, technology and geographic coverage, and marks a key step in expanding the Group’s industrial footprint.
Quality of the Target: A Leading Dye Manufacturer in a Cyclical Recovery Window
To understand the rationale behind GNMI’s acquisition, one must first take stock of what Jihua Group actually brings to the table.
Jihua Group is no ordinary dye manufacturer. It is a leading player in China’s disperse dye segment and operates the world’s third-largest dye production base, with complete production capacity across the entire fine chemicals chain and self-sufficiency in disperse dyes, reactive dyes and the key intermediate H-acid. Against the backdrop of sharp raw-material price volatility and continuously tightening environmental standards in the dye industry, Jihua Group’s full-industry-chain foundation constitutes a barrier that is difficult to replicate.
Beyond its core dye business, Jihua Group has extended into water-based non-stick coatings, polyurethane foam and other businesses, and has entered the pharmaceutical and healthcare sector. In June 2025, Jihua Group was granted the Drug Registration Certificate for Rivastigmine Transdermal Patch by the National Medical Products Administration, marking a major breakthrough in the pharmaceutical field.
In terms of research and development, Jihua Group holds 119 patents and has led or participated in the formulation of 41 national and industry standards. Its three subsidiaries, namely Jiangsu Jihua, Jihua Jiangdong and Jihua Materials, are all recognised as high-tech enterprises, and it operates platforms including a national-level postdoctoral research workstation and a provincial-level enterprise research and development centre.
Turning to its asset base, as at 30 June 2026, Jihua Group’s liability-to-asset ratio was only 11.15%, with current assets amounting to as much as RMB3,124 million and ample cash on its balance sheet. In addition, Jihua Group owns production bases and industrial land totalling more than 710,000 square metres across multiple locations in the Yangtze River Delta, further reinforcing its physical foundation.
Despite its robust asset base, this fine chemicals platform — with solid assets, low leverage and a full industry chain — has seen its profitability come under pressure in certain periods, owing to cyclical fluctuations in the dye industry and phases of overcapacity. That said, the cyclical trough has not weakened Jihua Group’s underlying industrial strength.
Its financial trajectory places Jihua Group precisely at the point where an earnings inflection is being confirmed. In the first half of 2026 ("1H2026"), Jihua Group recorded operating revenue of RMB796 million, representing a year-on-year increase of 12.27%; net profit attributable to shareholders of the listed company of RMB46.16 million, representing a year-on-year increase of 1,235.47%; net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses of RMB19.64 million, turning around from a loss in the corresponding period of the previous year; and net cash flows from operating activities of RMB111 million, representing a year-on-year increase of 436.91%.
Since the beginning of 2026, the price of H-acid, a core dye intermediate, has risen from approximately RMB40,000 per tonne at the start of the year to RMB150,000 per tonne in early September, an increase of 275%. Jihua Group has total dye production capacity of nearly 100,000 tonnes (including 75,000 tonnes of disperse dyes, ranking among the top three in the industry, and 20,000 tonnes of reactive dyes), supported by upstream intermediate capacity of 20,000 tonnes of H-acid and 330,000 tonnes of sulphuric acid. In the current intermediate-constrained price upcycle, Jihua Group’s H-acid capacity provides an important supply safeguard against rising raw-material prices.
M&A and Integration at Home and Abroad: GNMI Continues to Expand Its New Materials Footprint
Jihua Group’s solid fine chemicals foundation also places high demands on the acquirer’s industrial integration capabilities — an area in which GNMI has accumulated extensive hands-on experience.
Since its listing in Hong Kong in 2021, GNMI has completed two landmark overseas acquisitions: the acquisition of CQV in Korea in 2023, and, in July 2025, the acquisition of SUSONITY (formerly Merck Surface Solutions, the global surface solutions business of Merck, Germany, and currently the Group’s German business operation) for EUR665 million — the largest overseas acquisition to date in China’s pearlescent materials industry.
1H2026 marked the first full half-year following the consolidation of the overseas assets into GNMI, during which the Group’s global synergies continued to materialise. The German business operation moved past the disruptions of the acquisition transition period and restored its production capacity, with average monthly revenue up 32.3% compared with its initial consolidation period. Excluding foreign-exchange impacts, revenue of the Korea business operation increased by 17.2%. The Group advanced cross-selling across business segments, coordinated supply among its six global manufacturing bases, and the alignment of process technologies between its domestic and overseas operations. The proportion of overseas revenue rose significantly to 57.5%, and a global structure featuring multi-region, multi-point growth has taken shape.
The results of this expansion are likewise borne out in the Group’s financial statements. In 1H2026, GNMI’s revenue increased by 180.5% year-on-year to RMB2,558.3 million, gross profit increased by 106.3% year-on-year to RMB977.7 million, and adjusted EBITDA reached RMB589.3 million, representing a year-on-year increase of 36.6%.
GNMI’s technological strength is equally notable. The Company has synthetic mica as its core technological foundation. Compared with natural mica, synthetic mica offers significant advantages in purity, whiteness and control of heavy-metal content, and serves as the entry ticket to high-end cosmetic-grade and automotive-grade pearlescent pigments. As one of the few companies worldwide to have mastered full-chain synthetic mica technology, GNMI possesses the world’s largest synthetic mica production capacity. This advantage at the fundamental materials level underpins the Company’s pricing power and customer loyalty in the high-end market.
At present, under GNMI’s integrated operational coordination, the Group has established a sales network covering more than 150 countries and regions worldwide, directly serving the supply chains of leading global end brands such as Mercedes-Benz, BMW, L’Oréal and Estée Lauder.
Synergy Logic: Bridging Colour and Lustre Materials, from "Colour" to "Surface Functional Materials"
If the acquisitions of the Korean and German businesses represented GNMI’s horizontal integration within the pearlescent pigment segment, the acquisition of Jihua Group will bring the Group multiple synergies of a "vertical + cross-sector" nature.
First, the transaction achieves a strategic extension of the product portfolio. GNMI’s pearlescent pigments are characterised by lustre and angle-dependent colour-shifting effects, while Jihua Group’s dyes impart colour to textiles. Collaboration between the two would give GNMI the opportunity to upgrade from an effect pigment supplier to a comprehensive surface performance materials platform covering "colour + effect + function". This change not only brings diversified revenue — Jihua Group’s revenue of RMB1,524 million in 2025 was equivalent to approximately 52.2% of GNMI’s revenue for the same period — but also means that the business is expected to expand beyond automotive, cosmetics and industrial coatings into the trillion-scale textile printing and dyeing sector.
Second, the two parties have a strong complementary foundation in research and development, manufacturing and market resources.
GNMI excels in inorganic materials, with deep expertise in synthetic mica, platelet substrates and surface modification; Jihua Group specialises in organic chemicals, with deep expertise in dye synthesis, intermediates and large-scale chemical production. Its subsidiary, Jihua Materials, has 6,000 tonnes of water-based non-stick coating production capacity, and coatings happen to be a core downstream application for GNMI’s pearlescent pigments. In addition, GNMI has built a mature overseas distribution and customer service network.
Subject to compliance with their respective listing rules and relevant undertakings, the two parties can fully tap into their technological, industrial and channel resources to explore "organic + inorganic" technology integration and the iterative testing of pigment formulations, advance closed-loop validation across raw materials, formulations and end applications, and jointly build a more comprehensive research and development platform for colourants, coatings and specialty functional materials. Meanwhile, the two parties may assess market cooperation opportunities and study the potential feasibility of providing colour material solutions to textile industry clusters in Southeast Asia and South Asia.
Overall, as the subsequent steps of the acquisition are implemented, GNMI is expected to build a richer business matrix, opening up new room for long-term growth.
Pro Forma Financial Information Highlights a Strengthened Balance Sheet; Controlling Shareholder’s Share Purchases Demonstrate Confidence in Long-term Development
According to the unaudited pro forma financial information set out in the circular, assuming the transaction had been completed on 31 December 2025, the Group’s total assets would increase from RMB14,801 million to RMB19,636 million, net assets would increase from RMB4,474 million to RMB7,787 million, and the gearing ratio would decrease from 56.8% to 47.1%. The pro forma figures under this hypothetical scenario illustrate the strengthening effect that a cash-rich company would have on the Group’s financial statements.
For GNMI, this represents the third key piece of its M&A footprint, following the acquisition of CQV in Korea in August 2023 and the completion of the SUSONITY acquisition in Germany in July 2025. The successful completion of the first two transactions has already validated the Company’s platform-based growth model of acquisition, integration and continuous expansion.
Actions on the capital market front are progressing in parallel. On 17 September 2026, GNMI entered into a subscription agreement, and convertible bonds in an aggregate principal amount of RMB1.3 billion were issued on 24 September 2026. The initial conversion price of HK$10.93 per share represents a premium of approximately 15.05% over the closing price of HK$9.50 per share on 17 September 2026, the date on which the agreement was signed. The net proceeds amounted to approximately RMB1,281 million, which will be mainly used for the refinancing of existing debts and replenishment of working capital.
Since the beginning of this year, Dr SU Ertian has increased his shareholding in the Company on multiple consecutive occasions, and currently holds 36.4% of the Company’s shares. The controlling shareholder’s share purchases with real money and the issuance of bonds at a premium together form a set of mutually corroborating capital market signals.
Conclusion: With the Share Transfer Completed, Synergy Realisation Reaches a New Starting Point
Looking back on GNMI’s development, its strategic path has been clear and resolute: building on its synthetic mica technology, integrating brands, channels and production capacity through successive rounds of global M&A, and continuously upgrading towards a full-dimensional surface materials platform covering colour, effect and function.
Acquiring control of Jihua Group is a key step in advancing the Company’s strategy. The transaction completes the organic colour piece of the puzzle, secures a low-leverage A-share chemical platform, opens up the new textile printing and dyeing sector, and provides a vehicle for synergies in coatings and technology.
Against the backdrop of the restructuring of global industrial chains, GNMI’s entry into the fine chemicals sector by way of a Hong Kong-listed company acquiring control of an A-share company is both a commercially rational choice and a reflection of the strategic evolution of Chinese new materials enterprises — from "going global" to strengthening capabilities both at home and abroad. This cross-sector expansion from pigments to dyes merits the market’s long-term attention.
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