Jiahe Smart to acquire 55% of Huaze Electronics for 330 mln yuan, valuation up ~75 mln from prior deal

Amid a sustained decline in net profits, Jiahe Intelligent has announced its intention to acquire a 55% equity stake in Dongguan Huaze Electronics ("Huaze Electronics") via cash, with an estimated total transaction value of RMB 330 million. This is not the first time Huaze Electronics has appeared in the capital markets. In November 2025, A-share listed company Chenyi Intelligent had planned to acquire equity in Huaze Electronics at a similar price; however, that merger and acquisition was terminated on January 30, 2026.

Huaze Electronics' Valuation Rises

After its previous attempt at an indirect listing fell through, Huaze Electronics has now found a new buyer.

On the evening of September 18, Jiahe Intelligent disclosed an announcement stating that on September 17, the company signed an "Acquisition Intent Agreement" with Huaze Electronics shareholders Shen Shengmeng, Sun Xiaoli, Zhou Shuguang, and Shenzhen Kangao Electronics Co., Ltd. The company plans to acquire the 55% equity stake held by these four shareholders via cash. The overall estimated valuation of the target company is tentatively set at RMB 600 million, while the estimated value of the 55% equity stake is tentatively set at RMB 330 million.

Upon completion of this transaction, Huaze Electronics will become a controlled subsidiary of Jiahe Intelligent. The transaction does not constitute a related-party transaction, and preliminary calculations indicate it is not expected to constitute a major asset restructuring.

Notably, Huaze Electronics is not making its debut in the capital markets.

• On November 19, 2025, A-share listed company Chenyi Intelligent announced plans to acquire equity in Huaze Electronics via cash, with the intended acquisition ratio identical to Jiahe Intelligent's current one at 55%.
• After just over two months of planning, the matter was terminated. In an announcement on January 30, 2026, Chenyi Intelligent stated: "Due to the failure of both parties to reach agreement on key terms related to the transaction, it has been decided to terminate this acquisition."

Seeking another acquisition nearly eight months later, Huaze Electronics' valuation has risen compared to the previous round:

• According to Chenyi Intelligent's November 2025 announcement, the transaction price for the target assets was tentatively set at RMB 289 million, with an overall valuation of approximately RMB 525 million.
• In Jiahe Intelligent's recent announcement, the estimated valuation of the target company has increased to RMB 600 million, representing a rise of approximately RMB 75 million.

However, there are differences in the performance commitments established in the two transactions:

• Previous deal (Chenyi Intelligent): The performance commitment party pledged that Huaze Electronics' net profits for 2025–2027 would be RMB 47 million, RMB 48 million, and RMB 55 million respectively, with cumulative committed performance no less than RMB 150 million.
• Current deal (Jiahe Intelligent): The performance commitment requires Huaze Electronics' net profit after deducting non-recurring gains and losses for 2026–2028 to be no less than RMB 54 million, RMB 57 million, and RMB 60 million respectively, averaging RMB 57 million annually, with cumulative net profit after deductions over three years reaching RMB 171 million.

"The higher performance commitment amount set this time likely indicates improving profitability of the target," said Gao Chengyuan, Dean of the Tiaoyuan Impact Research Institute. Additionally, as an acoustic system integrator, Jiahe Intelligent may have relatively higher strategic compatibility with Huaze Electronics, making it willing to pay a certain premium.

Jiahe Intelligent's Net Profits Decline Consecutively

Jiahe Intelligent entered the A-share market in 2019 and is a high-tech enterprise long dedicated to the research, development, and production of consumer electronics, smart wearables, new energy vehicles, and intelligent cockpit products.

Regarding the purpose of this acquisition, Jiahe Intelligent mentioned in the announcement that the company can leverage Huaze Electronics' accumulation in technology, customer resources, and market channels, and utilize its own technology and experience in acoustic system integration to effectively break through entry barriers in the automotive industry and enter the track of automotive intelligent cockpit acoustic integration systems.

It is worth noting that behind the planning of this M&A, Jiahe Intelligent's recent financial performance has been less than ideal. The company's net profits declined consecutively in 2023 and 2024, followed by a shift from profit to loss in 2025, marking its first annual net profit loss since listing.

Financial data (2022–2025):

| Year | Operating Revenue (RMB) | Net Profit Attributable to Parent (RMB) | |------|------------------------|----------------------------------------| | 2022 | Approximately 2.172 billion | Approximately 174 million | | 2023 | Approximately 2.377 billion | Approximately 133 million | | 2024 | Approximately 2.467 billion | Approximately 41.3246 million | | 2025 | Approximately 2.115 billion | Negative 155 million |

In the first half of this year, Jiahe Intelligent's net profit declined again year-on-year. The company achieved operating revenue of approximately RMB 1.137 billion, a year-on-year increase of 13.19%; however, net profit attributable to parent company shareholders was only approximately RMB 1.8869 million, a significant year-on-year drop of 92.49%.

Beijing Business Today reporters attempted to contact Jiahe Intelligent regarding these matters but received no answer when calling.

In the secondary market, Jiahe Intelligent's stock price has generally shown a volatile downward trend throughout the year, accumulating a decline of 28.26% from January 5 to September 18, during which the broader market rose by 0.86%. As of the close on September 18, the company's stock price rose by 3.82%, closing at RMB 11.7 per share, with a total market capitalization of RMB 4.452 billion. Following the disclosure of this planned M&A, Jiahe Intelligent's stock performance on September 21 will also become a focus of market attention.

(Source: Beijing Business Today)