HONG KONG, Oct. 29, 2026 /PRNewswire/ — On 28 October, Zhejiang Jihua Group Co., Ltd. (603980.SH, "Jihua Group") held an extraordinary general meeting and the inauguration ceremony for its new board of directors in Hangzhou. Dr Su Ertian, Chairman of the Board and Chief Executive Officer of Global New Material International (06616.HK), assumed the role of Chairman of Jihua Group (603980.SH).
The registration of the share transfer was completed on 29 September. Through Tonglu Junheng Equity Investment Partnership (Limited Partnership) ("Junheng LLP"), Global New Material International became the controlling shareholder of Jihua Group with a 29.89% shareholding. The transaction is also regarded as a benchmark case in recent years of a Hong Kong-listed company acquiring control of an A-share listed company through a relatively smooth process.
With the handover of control and the board transition now completed, market attention has shifted from the transaction itself to how Global New Material International’s integration system, proven through cross-border transactions, will unlock value at Jihua Group and further strengthen and broaden the capabilities of its new materials industry platform.
From CQV to Susonity: Global New Material International Builds Global Integration and Synergy Capabilities
Global New Material International’s industrial integration capabilities have been fully validated through two cross-border acquisitions.
In early 2023, Global New Material International acquired a 42.45% stake in CQV Co., Ltd. ("CQV", now the Group’s Korea business operation) for approximately RMB470 million, becoming its single largest shareholder, and subsequently increased its holding to 50.61%.
Although relatively modest in size, the transaction was significant for more than its expansion of scale. By acquiring control of Korea’s largest pearlescent materials company, Global New Material International brought into its fold a well-established sales network covering more than 150 countries and regions. The Group’s global brand influence and technological capabilities reached new heights, laying the foundation for its subsequent rise to become the industry’s No. 1 player.
The results of integration are also reflected in substantial financial growth. The gross profit margin of the Korea business operation has risen steadily from approximately 30% before the acquisition to 46% in the first half of 2026, demonstrating Global New Material International’s integration and synergy capabilities in supply chain optimisation and cost control. Over the same period, excluding foreign-exchange impacts, revenue of the Korea business operation increased by 17.2% year on year.
If the acquisition of the Korea business operation was a test of the waters, the acquisition of Merck Surface Solutions Business (Susonity, now the Group’s German business operation) marked a venture into much deeper waters.
On 31 July 2025, Global New Material International completed the cash acquisition of a 100% equity interest in the German business operation for €665 million (approximately RMB5.187 billion), setting a record for the largest cross-border M&A transaction in the global surface performance materials industry.
The predecessor of the German business operation was a global leader in high-end effect pigments and surface solutions. Each of its top ten customers has worked with it for more than 15 years, with several relationships exceeding 30 years. Multiple brands in its portfolio hold considerable influence in the supply chains for high-end automotive original equipment manufacturer (OEM) coatings and ultra-luxury beauty products. According to a report by Frost & Sullivan, upon completion of the acquisition and based on 2025 sales metrics, Global New Material International held a market share of 24.4% in the global pearlescent-material market and 13.0% in the global surface-material market, ranking first in the industry in both cases.
More than a year has passed since closing. Global New Material International has advanced various integration initiatives in phases across five major workstreams: marketing; production and quality; procurement and supply chain; research and development and technology; and human resources. The business has progressed from a smooth initial transition to the unlocking of synergies, with improvements emerging in both operational and financial performance.
At the people and culture level, the Company adheres to the principle of co-creation rather than assimilation. It has bridged cultural differences in multinational operations through cross-regional team visits and exchanges, as well as localised management with delegated authority. The core team has been fully retained and employee headcount has achieved net growth, ensuring continuity in business, quality, delivery and customer service.
At the business level, the Group has leveraged the channel synergies created by its acquisitions to promote cross-brand cross-selling and capture incremental opportunities in global markets. The German business operation has launched a total of 60 cross-selling products originating from the PRC business operation in batches, covering three major sectors: industrial applications, coatings and cosmetics. Cross-selling businesses have reached more than 40 countries and regions worldwide, and the first batch of formal industrial-sector orders has been secured in multiple overseas markets.
In production and manufacturing, the Group has implemented multiple yield improvement and process optimisation projects, effectively increasing output at key plants in Germany and Japan. It has also advanced centralised global procurement to further unlock supply chain synergies.
In research and development, the Group has established a global research-and-development network leveraging its industrial footprint across Germany, the United States and Japan. In June this year, the Frankfurt Innovation and Application Centre, its European innovation hub, was officially completed and commissioned, strengthening the foundation for globally collaborative innovation.
In the supply chain, unified cross-continental logistics and global procurement systems are under development. The Group will progressively coordinate upstream resources to strengthen its upstream bargaining power.
These operational initiatives are also reflected in financial performance. The German business operation’s adjusted gross profit margin increased from 29.4% during its initial consolidation period (August to December 2025) to 37.6% in the first half of 2026, up 8.2 percentage points, while average monthly revenue grew by 32.3% compared with its first consolidation period. During this period of operational improvement, the German business operation successfully implemented product price increases while keeping its customer base stable, fully demonstrating the Group’s cross-border integration capabilities in balancing profitability and market expansion.
Controlling Jihua Group to Strengthen and Broaden the New Materials Industry Platform’s Capabilities
Drawing on the integration methodology proven in its overseas acquisitions, Global New Material International has advanced its acquisition of a controlling stake in Jihua Group. The Group prioritises stable production and operations at Jihua and continuity of customer service, while advancing integration in phases under an established framework. Unlike the horizontal integration of the Korea and German business operations within the same segment, the move into Jihua represents a vertical extension within the surface performance materials framework, further strengthening and broadening the capabilities of the new materials industry platform.
In terms of products, Global New Material International’s existing portfolio primarily comprises pearlescent, metallic and other effect pigments, while Jihua brings dyes, dye intermediates, industrial coatings and polyurethane products. This helps the Group build a more comprehensive product system spanning colour, visual effects and functional surface materials, while entering the textile printing and dyeing sector, diversifying its customer base and broadening its product portfolio.
In terms of technology, Global New Material International has deep expertise in inorganic effect materials, synthetic mica and surface application development, while Jihua Group has built extensive capabilities in organic synthesis, dye formulations and large-scale fine chemicals production, and also has supporting production capacity for water-based non-stick coatings. These strengths can further reinforce Global New Material International’s research-and-development and engineering-scale manufacturing capabilities in organic chemicals, while providing a practical vehicle for combining organic and inorganic material formulations.
In terms of the supply chain, Jihua’s production and sales network in the Yangtze River Delta will complement the Group’s domestic industrial footprint and strengthen its local customer service and product promotion capabilities. Its dye intermediates are also expected to support the Group’s raw material supply.
In terms of capital, Global New Material International, as a Hong Kong-listed company, connects with global industrial resources, while Jihua, as an A-share listed company firmly rooted in the domestic industrial ecosystem, provides the Group with an additional domestic capital market platform. The resulting "A+H" dual capital platform, with listings in both Hong Kong and the A-share market, offers a high degree of flexibility. In addition, Jihua has substantial cash reserves and a relatively low liability-to-asset ratio. Its consolidation is expected to help reduce Global New Material International’s overall liability-to-asset ratio and enhance the Group’s financial safety margin.
Following integration, Global New Material International will further enhance the industrial footprint of its surface performance materials platform and strengthen its ability to provide one-stop materials solutions to downstream customers. Building on its established business foundations in dyes, coatings, and textile printing and dyeing, Jihua Group will join the platform as an important member. The two parties are expected to empower each other in raw materials, technology and global channels.
Core Technologies, Channel Networks and Management Mechanisms: The Three Pillars Underpinning Global New Material International’s Global Acquisition and Integration Efforts
Global New Material International’s strategic path from a regionally leading pearlescent pigment producer to a global platform-based enterprise for surface performance materials is clear. It listed on The Stock Exchange of Hong Kong Limited in 2021; acquired the Korea business operation in 2023 to access high-end Asian markets; acquired the German business operation in 2025 to secure a commanding position in the global industry; and took a controlling stake in Jihua Group in 2026 to combine complementary strengths in materials technologies and fine chemicals manufacturing. This series of key industrial initiatives is underpinned by three platform pillars.
First, barriers built on rare materials DNA. The Company has established three material systems: pearlescent effective pigments; synthetic mica and functional filler; and cosmetic actives. Synthetic mica outperforms natural mica in purity, whiteness and heavy metal control. It is not only a core substrate for high-end cosmetics and automotive-grade pearlescent pigments, but also offers broad potential for expansion into emerging sectors such as electronics and new energy. As a leading enterprise that is one of the few worldwide to master full-chain synthetic mica technologies, and that has the world’s largest synthetic mica production capacity, Global New Material International can address supply chain gaps at its German and Korea business operations, ensuring more stable raw material supply and better production cost control.
Second, the ability to leverage its global network. Following the two acquisitions, Global New Material International has established six research-and-development centres, six manufacturing bases and six application centres across China, Germany, the United States, Japan and Korea. Its sales network covers more than 150 countries and regions, directly serving the supply chains of end brands including Mercedes-Benz, BMW, L’Oréal and Estée Lauder. Its mature global footprint reduces the marginal cost of acquisition integration, allowing newly acquired businesses to connect directly to its existing channels, procurement, logistics and compliance systems.
Third, replicable management mechanisms. The Integration Steering Committee, the five major integration workstreams, and milestones and acceptance criteria set in phases together form a highly transferable methodology. In taking control of Jihua Group, the Company applied the same management approach, prioritising a smooth transition, stable production and operations, and continuity of customer service. It has also advanced integration in phases while maintaining Jihua’s standardised operations and its necessary decision-making and information disclosure procedures.
External recognition also attests to the strength of this integration model. For the acquisition of the German business operation, Global New Material International received the "Golden Whistle Award" at the 2026 Global M&A Summit and was included by the Hong Kong Department of Justice in Successful Cases of Going Global (Volume II) as a benchmark case for overseas expansion.
The 60-Month Share Lock-Up: Global New Material International’s Long-Term Commitment to Its Controlling Stake in Jihua Group
When a company acquires control of another company, the capital market’s first expectation is often a rapid injection of assets to drive a valuation re-rating. Global New Material International, however, has chosen a slower but more solid path.
The transaction includes a 60-month share lock-up period and an undertaking not to inject assets constituting a material asset restructuring into Jihua Group for 36 months. Core management and technical personnel have also committed to remain in their roles for three years after closing. Together, these constraints indicate that the acquisition is not merely an exercise in financial consolidation, but an effort to build an industrial platform capable of compounding growth.
Since the beginning of this year, Dr Su Ertian, the Chairman, has increased his shareholding in Global New Material International on multiple consecutive occasions. As of 28 October, his shareholding had reached 36.64%, with cumulative purchases of 9.582 million shares during the year for a total investment exceeding HK$74.13 million. The controlling shareholder’s share purchases with his own money demonstrate his confidence in the Group’s long-term industrial development.
Through multiple rounds of industrial practice, Global New Material International’s global operations and asset integration capabilities have been thoroughly tested, while the capital market’s recognition of the Company’s value has continued to rise. Recently, Jingyuan Asset Management published a research report assigning the Company a "Buy" rating and a target price of HK$18.35, expressing confidence in its ability to leverage its materials technology foundation and global footprint to unlock medium-to-long-term growth.
This equity handover is only the beginning. In the short term, attention may focus on Jihua Group’s third-quarter report; over the medium to long term, the key will be the revenue and profit delivered through the implementation of synergies. Leveraging the continuing linkage among its global industrial resources in China, Germany, the United States, Japan and Korea, Global New Material International will steadily advance supply chain, technology and market synergies, continually strengthening the operating fundamentals of its new materials industry platform.
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