$163 Million Deal: Juhua Shun Acquires 10% Stake in Tianchen Yaolong, Racing Ahead in Nylon Industry Chain

Fig. Nylon 6 Chips (Source: Polypro)

On February 11, 2026, Juhushun New Material Co., Ltd. (hereinafter referred to as "Juhushun") successfully bid for a 10% stake in Fujian Tianchen Yaolong New Material Co., Ltd. (hereinafter referred to as "Tianchen Yaolong") held by Fuzhou Yaolong Chemical Group for RMB 163 million (precisely RMB 162,540,423.60), officially becoming a shareholder of Tianchen Yaolong.

This iconic move is not only an important milestone in Juhuasheng's deep cultivation of the nylon segment but also a typical case of upstream and downstream coordinated development in the current nylon industry. Against the backdrop of continuously adjusting supply and demand in the caprolactam market and the restructuring of profit distribution along the industrial chain, leading nylon polymerization enterprises have shown an increasingly clear strategic intention to actively extend upstream and secure core raw materials.

The author will analyze the underlying logic of this equity auction and its profound impact on the future development of China's nylon industry, combining the latest industry trends after 2025 and the layout strength of Juhua Shun itself.

I. Leadership Confidence: Juhua's Nylon Industry Layout and Core Strengths

To understand the strategic significance of Juhua Shun's bid for equity in this auction, it is first necessary to clarify its position and strength in the domestic nylon industry.

As a core enterprise in the domestic nylon 6 polymerization chip sector, Juhshun has focused on the research and development, production, and sales of new nylon materials since its establishment. After years of deep cultivation, it has formed a comprehensive product matrix covering basic chips, modified chips, and special chips, with its businessing the core midstream segment of the nylon industry chain. Simultaneously, it has gradually extended upstream and downstream, building a complete system of "R&D - production - supply chain - market," and its comprehensive strength consistently ranks among the top in the industry.

From the perspective of production capacity and operational strength, Juhgeshun has built multiple modern nylon polymerization production lines with a rational capacity layout, capable of efficiently meeting diverse downstream demands. According to the Q3 2025 financial report, the company's total assets reached 5.722 billion yuan, and total shareholder equity was 2.184 billion yuan. In the first three quarters of 2025, the company achieved a total operating revenue of 4.367 billion yuan and a net profit attributable to parent company of 140 million yuan, with basic earnings per share of 0.44 yuan. Its steady operating condition provides solid financial support for the company's strategic expansion.

As a listed company on the A-share market (Stock Code: 605166), Juhe Shun focuses on niche sectors such as chemical fibers and specialty chemicals. Its products are widely used in various fields including textiles and apparel, engineering plastics, automotive parts, and electronics and electrical appliances. With stable product quality and high cost-effectiveness, it has gained broad recognition from downstream customers.

Main products of Polymer Sun (Source: Polymer Sun official website)

In terms of R&D and product upgrades, Juh Shun has always prioritized technological innovation as its core competitiveness, focusing on high-end and differentiated products to break away from reliance on low-to-mid-end homogenous products. In June 2025, the company announced an optimization and adjustment of its original fundraising investment projects, changing the "124,000 tons/year Nylon New Material Project" to the "50,800 tons/year Nylon New Material Construction Project." This project will primarily produce high-end products such as Nylon 6 copolymer chips, Nylon 66 chips, and modified nylon, further enriching its product portfolio and enhancing added value. This strategic layout aligns perfectly with the current trend in the nylon industry of "shifting from scale expansion to quality improvement" and lays the foundation for the company to secure upstream raw materials and achieve synergistic development across the industrial chain.

Source: Jujushun Announcement

It is worth noting that Jujie Shun and Tianchen Yaolong have long-term and stable cooperative relations. The former is an important customer in the latter's supply chain, and Tianchen Yaolong owns a 350,000-ton/year caprolactam production facility, making it a significant domestic supplier of caprolactam. This equity auction is not an accidental capital operation, but rather an extension and deepening of Jujie Shun's supply chain layout, demonstrating the company's determination to deeply cultivate the nylon industry and achieve long-term strategic development.

II. Breaking Upward: The Underlying Logic of Juge Shun's Securing Upstream Raw Materials

The nylon industry exhibits strong upstream-downstream integration. As the core raw material for Nylon 6 production, the supply stability and price fluctuations of upstream caprolactam (CPL) directly determine the production costs, profitability, and market competitiveness of midstream polymerization enterprises. Juheshun’s investment in the auction for Tianchen Yaolong’s equity is fundamentally aimed at resolving industry pain points through equity-based alignment. Combined with a series of strategic initiatives for 2025-2026, this move is set to drive the company toward high-quality development.

(I) Locking in Upstream: Solving Three Major Pain Points in the Industrial Chain

Based on the latest dynamics of the nylon industry chain after 2025, Juhuasun has secured upstream caprolactam, with the core being to address the three major pain points commonly faced by the industry.

First, caprolactam prices have fluctuated violently, squeezing midstream profit margins.In 2025, the domestic caprolactam market in China showed a trend of "high-level decline followed by a slight rebound at the end of the year." The average annual price in East China was only 9263.51 yuan/ton, a year-on-year decrease of 25.75%. The difference between the peak and trough prices within the year reached as high as 3150 yuan/ton, and price fluctuations directly affected the cost control and profit stability of polymer enterprises.

Second, the supply and demand pattern is tending towards a tight balance, and supply stability is insufficient.In 2025, China's total caprolactam production capacity will reach 8.18 million tons, but the total output will only be 6.85 million tons. Meanwhile, the rapid expansion of downstream PA6 capacity will drive demand to 6.9504 million tons, resulting in a basic tight supply-demand balance. Looking ahead to 2026, the growth rate of caprolactam capacity is projected to be only 1.96%, while PA6 capacity will grow by 8.79%. This will further highlight the tight supply-demand situation, and pressure on raw material supply will persist.

Third, the profit distribution in the industrial chain is unbalanced, and the discourse power of the midstream is weak.For a long time, the nylon industry chain has seen profits concentrated in upstream raw materials and downstream high-end products, while midstream polymerization companies have faced intense homogenized competition, leading to continuously squeezed profit margins, making upstream integration an inevitable choice.

This time, Juheshun's bid for a 10% stake in Tianchen Yaolong aims to achieve deep synergy with an upstream enterprise through equity ties. This will allow them to prioritize securing caprolactam supply, mitigate the impact of price fluctuations, participate in upstream profit distribution, and enhance their voice in the industrial chain, thereby laying a solid foundation for the company's stable development.

(II) Diversified Layout: 2025-2026Annual strategic actions materialize

Locking in upstream raw materials is just one part of Juhua Shun's strategic layout. From 2025 to 2026, the company will launch several major initiatives to improve its layout, focusing on the goals of "product premiumization and industrial chain integration."

First, secure a position in the Nylon 66 market. High-end track, breaking through industrial bottlenecks.In August 2025, Juhua Shun reached a cooperation agreement with Tianchen Qixiang through its wholly-owned subsidiary, with the latter investing RMB 140 million as a strategic shareholder. The key focus is to ensure the supply of adiponitrile, the core raw material for the "80,000-ton Nylon 66 Project," promoting the localization and large-scale production of Nylon 66 and filling the company's high-end product gap. In December 2025, Juhua Shun announced that the "80,000-ton Nylon New Material (Nylon 66) Project," originally scheduled to be completed in December 2025, would be postponed to December 2026. Juhua Shun stated that the successful implementation of the Nylon 66 project will positively promote the company's future development and is expected to enhance the company's market competitiveness and profitability.

Second, optimize product structure and focus on high-value-added areas.By adjusting the investment projects, focusing on the production of high-end copolymer chips, modified nylon, and other products, and targeting high-end automotive, electronics and electrical, and other downstream sectors, we aim to break away from homogeneous competition in the mid-to-low end market and improve profitability.Third, deepen industrial chain collaboration and improve the supply chain system.Downstream, strengthen cooperation with key customers to expand into high-end markets; in R&D, increase investment in high-end material research and development to drive technological innovation; for capacity, optimize existing layouts and advance new capacity construction. By the third quarter of 2025, the net cash flow from investing activities reached -340 million yuan, primarily directed towards capacity upgrades and project construction, demonstrating a strong commitment to expansion.

III. Industry Empowerment: The Profound Value of Juheshun's Equity Actions in the Industry

Although this equity auction of Juhua Shun is a strategic arrangement for the company itself, it has a profound leading and enabling effect on the entire Chinese nylon industry, promoting the industry's transformation from "fragmented competition and individual battles" to "coordinated development and quality improvement." The core impact is concentrated in three aspects.

First, reshape the competitive landscape: lead midstream enterprises to extend upstream. Juhe Shun's actions have broken the disconnect between the upstream and downstream of the nylon industry chain, providing a replicable development model for midstream polymerization enterprises. This model involves establishing deep synergistic relationships with upstream enterprises through equity binding and strategic cooperation, thereby addressing pain points such as cost, supply, and bargaining power. It is expected that more leading midstream enterprises will follow suit in extending their operations upstream in the future, driving the industry chain to transform from "going it alone" to "shared interests and synergistic development," thereby enhancing the overall stability and competitiveness of the industry chain.

Secondly, optimize resource allocation: alleviate the contradiction between supply and demand for caprolactam.Tianchen Yaolong's 350,000-ton/year caprolactam capacity has not been fully utilized, while Juhua Shun can promote its full capacity utilization by increasing its procurement volume through equity binding. Simultaneously, Juhua Shun secures raw material supply, ensuring the full-capacity operation of its own production lines, reducing the impact of market supply and demand fluctuations, achieving optimal allocation of upstream and downstream resources, alleviating the tight supply-demand balance in the caprolactam market, and enhancing the overall operational efficiency of the industry.

Third, moving towards high-end upgrading: enhancing China's international discourse power in the nylon industry.Currently, China's nylon industry is "large but not strong," with a reliance on imports for high-end products. Juhua Shun is strategically positioning itself in nylon 66 and promoting product sophistication. Simultaneously, through technical collaboration with upstream enterprises, it aims to drive technological upgrades across the entire industrial chain, filling the gap in high-end products and reducing import dependence. Furthermore, its integrated layout will promote industry concentration, cultivate leading enterprises with core competitiveness, and drive China's transformation from a "major nylon producer" to a "strong nylon producer," enhancing its global market influence.

IV. Conclusion: Equity Binding Charts a Blueprint, Nylon Industry Ushers in a New Life

Aggregating Shun's auction of 10% equity in Tianchen Yaolong is a key move for the company to establish long-term development and solve the pain points of the industrial chain, and it is also an inevitable product of the development of China's nylon industry to a new stage. From the enterprise level, this layout not only locks in the supply of core raw materials, but also promotes product upgrading and industrial chain integration through diversified strategic actions, laying a solid foundation for the company's sustainable development. From the industry level, its leading role will promote the restructuring of the nylon industrial chain, the optimal allocation of resources, and the high-end transformation, empowering the high-quality development of the entire industry.

Looking ahead, with the gradual release of synergistic effects across the industrial chain and the continuous leadership of top enterprises like Juhua Chemical, China's nylon industry will gradually overcome the predicament of being "large but not strong," achieving a dual improvement in quality and efficiency, and occupying a more important position in the global nylon market. Juhua Chemical, with its clear strategic layout, will also grow into a leader in China's nylon industry, continuously contributing to the industry's development.

Edited by: Lily

Sources: Official website of China Tianchen Engineering Corporation, Flush Finance Database, East Money (JUHESHUN Stock Calendar), NetEase News, etc.