Jinshi Resources to Acquire 15.71% Stake in Noah Fluorochemical for 257 Million Yuan

Jinshi Resources (603505) announced on December 21 that it plans to purchase a 15.71% equity stake in Zhejiang Nuoya Fluorochemical Co., Ltd. ("Nuoya Fluorochemical") for 257 million yuan. Upon completion of the transaction, the company will hold a 15.71% stake in Nuoya Fluorochemical, becoming its second-largest shareholder.

Jinshi Resources, as a leading enterprise in the fluorite industry, which is the source material for the fluorochemical industry, has expanded its business in recent years from fluorite resources to basic fluorochemical products such as anhydrous hydrofluoric acid and anhydrous aluminum fluoride, as well as downstream lithium battery materials like lithium hexafluorophosphate. The company's current external investment in purchasing equity aims to leverage its core advantages in upstream fluorite mines and basic fluorochemical products to enter the fine fluorochemical sector with high growth potential. By utilizing economies of scope to expand new quality businesses, this move aligns with the company's "resources + technology" dual-driven strategy and its strategic direction of a vertical integration layout in new quality fluorochemicals. It represents an important step for the company, as an upstream leader in the fluorochemical industry, to strategically extend downstream into fine fluorochemicals, deepen the value chain, and integrate the industry.

Jinshi Resources stated that this transaction is a strategic extension for the company, as a leading enterprise in the upstream fluorochemical sector, into the downstream high value-added fine fluorochemical field.

Noah Fluorochem is specialized in the research and development, manufacturing, and sales of fluorine-containing electronic chemicals. Its main mass-produced products include fluorinated cooling liquid, mid-to-high-end electronic cleaning agents such as fluorinated ethers, and perfluorohexanone fire extinguishing agents. The fluorinated cooling liquid products are made through chemical synthesis and have unique advantages in product purification and testing technologies. In 2019, they were included for the first time in a central enterprise's procurement list and applied to the National Supercomputing Center project. In recent years, they have also been used by well-known internet companies and server manufacturers both domestically and internationally. Currently, the company has established a production capacity of 5,000 tons of fluorinated liquid, ranking among the top domestically in terms of market scale and market share in the immersion liquid cooling market. Hydrofluoroethers are a new product that Noah Fluorochem is focusing on cultivating, with promising development prospects. The perfluorohexanone products have mature technology and a high market share.

Zhejiang Base: Mature Production Capacity Strengthens the Supply Foundation

As the core mature base of Noah Fluorochemicals, the Zhejiang base's capacity layout focuses on the stable mass production of the core category of fluorinated cooling liquids. According to public information, the current production capacity is as follows:

Fluorinated coolant: 2000 tons/year of hexafluoropropylene dimer, 3000 tons/year of hexafluoropropylene trimer, 500 tons/year of hexafluoropropylene dimer isomer.

Supporting chemicals: 4,000 tons/year of perfluorohexanone.

Hubei Base: Expanding Capacity to Capitalize on Opportunities

With strong government support, the leap from groundbreaking to production was completed in just 15 months. In September 2024, its annual production of 8,000 tons of perfluorohexanone project officially went into operation, breaking the 20-year market monopoly held by foreign countries in the high-end fluorine-containing electronic chemicals field and achieving domestic substitution of key products.

The Hubei base is positioned as the core for capacity expansion, implementing new construction and expansion projects in phases to fully cover the incremental demand for fluorinated coolants and other new materials and supporting products. The current capacity is as follows:

Supporting chemicals: 8,000 tons/year perfluorohexanone.

The production capacity under construction is as follows:

Fluorinated coolant: 5,000 tons/year of hexafluoropropylene dimer, 10,000 tons/year of hexafluoropropylene trimer, 2,500 tons/year of Noah7300 hydrofluoroether.

1500 tons/year of perfluoroisobutyl methyl ether, 500 tons/year of perfluoroisobutyl ethyl ether.

Other chemicals: Annual production of perfluoro surfactants Noah FS2201 and Noah FS2301, each 150 tons.

The independently developed perfluorohexanone technology has reached the international advanced level, with advantages such as low extinguishing concentration, high efficiency, and no residue. It has been widely used in key scenarios such as supercomputing centers, energy storage stations, and new energy batteries, laying a solid technical and market foundation for the base to seize the growth dividend of AI computing power.