Acquisition Halted Twice Amid Financial Documentation Challenges: Can Daowen Titanium’s Integration Be Revived?

Recently, Shandong Dawn Polymer Co., Ltd. (Stock Code: 002838.SZ, hereinafter referred to as “Dawn Co.”) announced that it received a notice from the Shenzhen Stock Exchange (SZSE) on March 31, stating that the SZSE had suspended the review of Dawn Co.’s major asset reorganization—specifically, its proposed acquisition of 100% of the shares of Shandong Dawn Titanium Industry Co., Ltd. (hereinafter referred to as “Dawn Titanium”)—and the accompanying fundraising for supporting purposes, due to the financial data included in the application documents having expired, in accordance with relevant regulatory rules. This marks the second time within a short period that this reorganization has been suspended due to documentation issues, further complicating Dawn Co.’s efforts to expand its chemical new materials industrial chain.

The reason for the suspension of this review is clear. The audit report of the target company, Daon Titanium, has a base date of June 30, 2025, and the related financial documents are valid until March 31, 2026. Due to the review schedule, the financial documents were not completed within the valid period, ultimately triggering the suspension procedure. It is worth noting that this is not the first time that the acquisition of Titanium by Daon has been suspended. Earlier, on December 31, 2025, the Shenzhen Stock Exchange had previously suspended the review of this matter due to expired valuation documents. After Daon completed the updated valuation and document updates, the review was resumed on February 27, 2026. However, less than two months after the resumption, the review was once again put on hold due to the expiration of the financial documents.

Core Strategic Move! Acquiring for RMB 14.34 Billion to Strengthen the Chemical New Materials Industrial Chain

As a key layout for Dawn Co., Inc. to perfect its chemical new materials industry chain, the acquisition of 100% of the shares in Dawn Titanium Industry has garnered significant market attention. According to previously disclosed information, the valuation of 100% equity in Dawn Titanium Industry is approximately 1.434 billion yuan, and the transaction counterpart has made a three-year performance commitment. The accompanying funds raised from this transaction are planned to be used for the construction of a green titanium dioxide production project, payment of cash consideration, and supplementation of working capital, among other uses.

Daon Titanium, the target company, mainly engages in the production of titanium dioxide and other products. Its business can achieve strong synergy with Daoen Group’s existing polymer materials business. After the transaction is completed, Daoen Group’s industrial chain layout will be further improved, and its overall competitiveness is expected to be enhanced.

Outstanding performance! Revenue and profit both increased in 2025, setting new historical highs.

From the perspective of Daowen Co., Ltd.’s own development, as a leading domestic enterprise in the new chemical materials sector, the company’s operational performance is steadily improving. Its 2025 annual financial report, released on March 30, shows that the company achieved RMB 6.056 billion in operating revenue, representing a 14.25% year-on-year increase, and RMB 189 million in attributable net profit, up 34.03% year-on-year. Product sales volume exceeded 556,100 tons, with both revenue and sales volume reaching record highs.

Among them, the core elastomer and modified plastic segments performed outstandingly, with the elastomer business generating revenue of 832 million yuan and the modified plastic business generating revenue of 4.399 billion yuan. Several products have achieved mass applications or technological breakthroughs in fields such as new energy vehicles and home appliances. Meanwhile, the company has realized the independent production of core raw materials through wholly acquiring Anhui Boss, and acquiring 80% equity in Ningbo Aiskai, thereby building a complete "polymerization - modification - application" industrial chain. In terms of R&D, the company invested 280 million yuan in R&D in 2025. Relying on four technical platforms, it has made significant progress in tire-grade DVA materials and flexible materials for humanoid robots, with multiple technologies reaching industry-leading levels. Some products are planned to be commercialized in 2026.

Actively advancing! The company stated that the suspension does not constitute a material adverse effect.

In response to the suspension of this review, Dawnway Shares stated that the suspension is not expected to have a material adverse impact on the progress of the transaction. The company is currently working actively with intermediaries to update financial data and other related matters, and will promptly apply to the Shenzhen Stock Exchange for resumption of the review once these matters are finalized.

However, it should be noted that this transaction still needs to be reviewed by the Shenzhen Stock Exchange and obtain the approval from the China Securities Regulatory Commission (CSRC). The final approval, the ability to pass the review, and the timing of the approval remain uncertain. The company also reminds all investors to pay attention to investment risks.

Currently, the domestic titanium dioxide market is in a period of industry fluctuation. Affected by factors such as high upstream sulfur and sulfuric acid costs, the titanium dioxide market in March 2026 experienced a price increase. Industry leaders raised product prices three times within the month, and many companies followed with price increases. However, industry enterprises are also facing pressures such as sharply increased costs and not yet significantly improved profitability.

In this context, whether Dawn Co., Ltd. can smoothly advance its titanium industry acquisition not only concerns the company's own industrial chain layout but also draws significant attention from the industry. The market looks forward to Dawn Co., Ltd. updating its financial data as soon as possible, restarting the acquisition review process, and achieving business synergy with Dawn Titanium Industry at an early date, exploring new growth opportunities in the integration and development of chemical new materials and titanium dioxide industries.