Net Profit Forecast Rises Over 300 Percent, Haitaike Suspends Trading for Cross-Industry Acquisition, Targeting High-Molecular Material "Second Growth Curve"

On the evening of April 6, Hai Tai Ke announced that it is planning to acquire control of Qingdao Xuyu Geosynthetic Materials Co., Ltd. (stock code: 873815), a company listed on the Innovation Layer of the National Equities Exchange and Quotations (NEEQ), through a combination of issuing shares and making cash payments. Although this acquisition appears to be “cross-sector,” it in fact reflects Hai Tai Ke’s deeper strategic layout in the field of polymer materials.

Overview of the Acquisition: Does Not Constitute a Material Asset Restructuring

According to the announcement, Haitaike has signed a "Share Cooperation Memorandum" with Xuyu Shares' actual controller Yang Baohe and other major shareholders. The company's stock will be suspended from trading starting April 7, and it is expected to disclose the transaction plan no later than April 21. This transaction will adopt a combination of "issuing shares + cash payment" and will simultaneously raise supporting funds. It is worth noting that this transaction is expected not to constitute a related-party transaction, nor will it constitute a significant asset reorganization, and will not lead to a change in the company's controlling shareholder or actual controller.

From the nature of the transaction, this appears to be a small but strategic acquisition. Haitaike chose to initiate the acquisition at the peak of its performance, timing it perfectly — the company has just overcome the financial pressure from the redemption of convertible bonds, its total debt has significantly decreased, and its cash flow has improved, giving it the space to conduct capital operations through issuing shares.

Deep Analysis of the Target: The Growth Logic of Specialized, Refined, Unique, and Innovative "Little Giant" Enterprises

Xuyu Co., Ltd. was established in November 2000 and listed on the New Third Board in September 2022, with a registered capital of 100.3 million yuan. It specializes in the research, development, production, and sales of geosynthetic materials. The company's core products include geogrids, geocells, and others, which are widely used in the construction of infrastructure such as railways, highways, water conservancy, and environmental protection.

In terms of qualification certification, Xuyu Co., Ltd. is a national "Little Giant" enterprise for specialized, precise, and innovative development, a Shandong Provincial Manufacturing Single Champion enterprise, and a high-tech enterprise. The company has manufacturing bases in Qingdao, China, and Oklahoma, USA, and has agency offices in the UK, Italy, and the USA, making it a major manufacturer of plastic geogrids globally.

In terms of financial performance, Xuyu Co., Ltd. achieved operating revenues of RMB 278 million, RMB 219 million, and RMB 280 million in 2023, 2024, and 2025, respectively, with attributable net profits of RMB 63.1 million, RMB 34.77 million, and RMB 43.58 million, respectively. In 2025, revenue increased by 27.8% year-on-year, and net profit increased by 25.34% year-on-year. This growth was primarily driven by the concentrated commencement of supply for several domestic projects that had been under continuous tracking, as well as concentrated procurement from new customers in the Central Asian region.

Image source: Xuyu Co., Ltd.

In terms of market layout, Xuyu Co., Ltd. has established an overseas sales network covering Asia, Africa, Europe, North America, South America, and Oceania, with its products sold in over 50 countries and regions worldwide. The company has participated in the construction of “mega-projects” such as the Qinghai-Tibet Railway and the Beijing-Shanghai Expressway.

From an industry perspective, geogrids are planar mesh materials with open apertures, manufactured from polymer pellets such as polypropylene (PP) and high-density polyethylene (HDPE) through oriented stretching. This shares certain underlying technical similarities with HaiTaik's recent strategic focus on modified plastics.

Figure High-strength polypropylene uni-directional geogrid (Image source: Sunward Co., Ltd.)

The performance turning point of Haitaike: from four years of decline to explosive growth

Haitaike was founded in 2003 and listed on the ChiNext market in 2021. The company specializes in the research and development, design, manufacturing, sales, and project management services of automotive injection molds and plastic components. It operates three subsidiaries: Haitaike Molds, responsible for the R&D and manufacturing of injection molds and plastic components; Thai Haitaike, responsible for production and business operations in the Thai market; and Haitaike New Materials, engaged in the R&D and sales of polymer materials. The company’s customers include leading domestic and international automakers such as Mercedes-Benz, BMW, Volkswagen, BYD, and Li Auto, and its performance is closely tied to the global automotive industry cycle.

Image source: Haitaike

Previously, the company’s profitability had declined for four consecutive years, with the year-on-year growth rates of net profit attributable to shareholders being –11.77%, –9.88%, –57.17%, and –32.34% for 2021 through 2024, respectively. The 2025 earnings forecast indicates that Hai Tai Ke expects its full-year net profit attributable to shareholders to range from RMB 51.5 million to RMB 66.8 million, representing a year-on-year increase of 226.86% to 323.97%; its net profit attributable to shareholders excluding non-recurring gains and losses is expected to range from RMB 37 million to RMB 48 million, representing a year-on-year increase of 353.30% to 488.06%.

The reasons for Haitaike's explosive performance can be summarized into three aspects:

Industry sentiment is improving: the automotive industry is recovering overall, the penetration rate of new energy vehicles continues to rise, driving growth in demand for upstream components.

Capacity ramp-up: The capacity from the initial fundraising project is gradually being released, with the Hefei modified plastics production base scheduled to commence operations in January 2026, establishing an initial integrated industrial chain encompassing "modified plastics – injection molding tools – plastic components."

Cost Control and Financial Optimization: Early redemption of convertible bonds reduces interest-bearing liabilities, while the appreciation of the euro exchange rate generates foreign exchange gains, further boosting profits.

Industry Perspective: The Underlying Logic of Cross-Boundary Collaboration

At first glance, the alliance between HaiTaiKe and Xuyu Co., Ltd. appears somewhat “cross-sectoral” based solely on business labels—one being a consumer-oriented automotive supply chain enterprise, and the other a construction-oriented engineering materials supplier. However, upon deeper analysis, both companies are, in fact, situated within the broad industrial domain of polymer materials.

Commonality on the raw material side: The raw materials for geogrids are precisely polypropylene, high-density polyethylene, and other polymer pellets, which significantly overlap with the raw materials used in Haitaike's modified plastics business. This commonality in "upstream material processes" means the acquisition is not merely a financial investment, but rather a reuse of underlying technological logic.

Logic of Strategic Synergy: In recent years, HAITAIKE has vigorously advanced its “Mold-Plastic Integration” strategy, expanding its business scope from pure mold manufacturing to modified plastics and high-performance polymer new materials. In 2023, HAITAIKE issued approximately RMB 400 million in convertible bonds to fund the “Annual Production Capacity of 150,000 Tons of Polymer New Materials Project.” Upon full capacity utilization expected in 2027, the project is projected to generate annual sales revenue of RMB 1.745 billion and net profit of RMB 73.6815 million.

If this merger is successfully completed, Haitaike can directly apply its technical reserves in polymer material modification to Xuyu's extensive infrastructure application scenarios. For Xuyu, joining the ranks of an A-share listed company may enable it to expand its business into broader overseas and high-end markets, leveraging the credit endorsement.

Considerations for Risk Hedging: The automotive mold industry is constrained by the physical limitations of capacity expansion, making it difficult to achieve exponential growth through expansion alone. At the same time, the cutthroat competition and price wars in the automotive industry have been passed on to upstream component manufacturers. Over-reliance on the "cyclical" risks of the single automotive industry means that Haitaike must use strategic means to smooth the transition. Entering the geosynthetic materials track is a practical move to find a "second growth curve."

Overseas Channel Collaboration: Haitaike’s overseas sales are primarily directed to Europe; in 2023, it established a wholly-owned subsidiary in France, following the establishment of a Thai subsidiary in 2019. Xuyu Shares operates production bases in Qingdao, China, and Oklahoma, USA, with products sold to over 50 countries and regions worldwide. If overseas channels can be shared and mutually empowered, this acquisition would represent not merely a financial consolidation, but tangible strategic synergy.

However, the "integration barrier" before Haitaike remains formidable.

Customer Response Rhythm Differences: One is a mold manufacturer serving the fast-paced automotive industry, which demands extremely short lead times and rapid product iteration; the other is a materials supplier serving long-cycle infrastructure projects, where project durations are often measured in years. The two inherently differ in customer response rhythm and production management models.

The depth of business integration: Achieving a transaction is just the first step. Whether Haitaike can truly transition from a single manufacturing business to a diversified manufacturing platform depends on its ability to achieve real synergy in high-polymer material modification technology, rather than merely achieving financial consolidation.

Valuation Considerations: Xuyu Co., Ltd.’s net profit for 2025 is projected at RMB 43.577 million. Applying the typical P/E multiples of 15–20 for companies listed on the New Third Board’s Innovation Layer, the corresponding market capitalization is approximately RMB 650–870 million. The specific acquisition consideration and payment terms will directly impact the assessment of transaction value-for-money. From an industrial chain perspective, Haitai Science & Technology’s core business is deeply tied to the automotive industry, whereas Xuyu Co., Ltd., operating in the geosynthetic materials market, is closely linked to infrastructure development and the advancement of the “Belt and Road” Initiative. As these two companies operate in distinct economic cycles, their combination theoretically offers earnings complementarity, helping to mitigate operational volatility arising from fluctuations in a single industry.

According to production data from the National Bureau of Statistics and corporate annual reports, the CR3 of China’s modified plastics industry in 2024 is approximately 12.25%, the CR5 is about 15%, and the CR10 is less than 17%, indicating a relatively low market concentration. If HaiTaiKe can achieve mergers and acquisitions to integrate the industry and simultaneously strengthen its presence in automotive modified plastics and infrastructure engineering materials, it will be well-positioned to secure a more advantageous role within the vertically integrated industrial chain spanning “materials—molds—components.”

Seeking change at the peak of performance often shows more foresight than making drastic sacrifices during a downturn. Whether this cross-industry acquisition can become a strategic turning point for Hiteker depends on two "synergies" — whether the technological synergy can be realized and whether the channel synergy can be fulfilled. Specialized Plastics Vision will continue to follow the progress of Hiteker's acquisition, and we welcome you to stay tuned.

Editor: Lily