Jihua Group: Product Price Increase + New Owner Takes Over, Reshaping the New Investment Value Logic

Recently, Jihua Group (603980.SH) stock price has shown a significant upward trend.

Market data indicates that from January 28 to February 25, Jihua Group’s stock price rose from 5.50 yuan per share to 8.40 yuan per share, an increase of 52.17%, with multiple trading sessions hitting the daily limit.

According to Thonghua’s anomaly analysis, the reasons for Jihua Group’s stock price increase are, on one hand, the nationwide price hike in the dye industry, which could greatly boost the company’s gross profit; on the other hand, on February 6, Jihua Group officially disclosed a control rights change plan. Tonglu Junheng became the new controlling shareholder through an agreement transfer, holding 29.89% of the shares.

It is reported that Su Ertian, the actual controller of Tonglu Junheng, owns the Hong Kong-listed company Global New Materials International, which may bring new industry chain synergies to Jihua Group.

Seizing Opportunities Amid Price Hikes

By 2026, industrial products—from metals to chips to chemicals—are entering a phase of widespread price increases. The dye industry, where Jihua Group operates, is among them.

According to Flante’s price increase notice, starting February 9, 2026, the prices of dispersed dyes will be adjusted accordingly, with nine products including Disperse Black ECT (300%) increasing by 2,000 yuan per ton. Specifically, Cangqing HW-SR will be raised by 3,000 yuan per ton, with an expected overall price increase of about 10% for these ten products.

It is noteworthy that this price increase is not a short-term market fluctuation but a trend driven by multiple supply and demand factors, with strong sustainability. On the supply side, the dye industry has undergone years of environmental regulation, leading to the continued exit of small and medium capacities, increasing industry concentration. In the dispersed dye sector, the CR3 (top three companies’ market share) exceeds 80%, forming a monopoly pattern dominated by Zhejiang Longsheng, Runtu Co., Ltd., and Jihua Group.

On the demand side, continued recovery further solidifies the basis for price increases. As overseas textile orders accelerate returning, domestic textile industry prosperity continues to rise. Additionally, after the Spring Festival, downstream companies enter peak stocking season, and the previous low inventory levels have prompted concentrated procurement, leading to explosive growth in dye market demand.

Furthermore, the rising prices of upstream raw materials provide a reasonable basis for dye price hikes. More importantly, the industry currently has no new compliant capacity, resulting in a supply-side “permanent rigidity,” significantly strengthening the pricing power of leading companies. Coupled with the industry’s profit characteristics of high fixed costs and marginal costs approaching zero, product price increases will maximize gross profit growth.

Therefore, the biggest beneficiaries of the price hikes are undoubtedly companies with sufficient capacity. Jihua Group has a total dye capacity of 100,000 tons per year, including 70,000 tons of dispersed dyes, 15,000 tons of reactive dyes, 5,000 tons of other dyes, and 20,000 tons of H acid capacity, which will undoubtedly take advantage of this wave of price increases.

New Owner Sparks Growth Potential

If product price increases are the “short-term performance engine” for Jihua Group, then the entry of Global New Materials International acts as a “long-term growth accelerator” for the company.

In February 2026, Jihua Group officially disclosed a control rights change plan. Su Ertian, through the holding platform Tonglu Junheng, acquired all shares from the Shao Bojin family, the original actual controller, at a premium of 1.492 billion yuan, along with a 300 million yuan private placement. After the transaction, he will become the new actual controller. This is the first “H-shares A-share” benchmark case in 2026, not merely a financial investment but a strategic layout based on industrial synergy.

As the leader of Global New Materials International, Su Ertian is known as the “King of Pearl Materials.” Under his leadership, Global New Materials International is a globally leading surface performance materials company, with top technologies and a global supply chain in high-end pearl materials and synthetic mica. After taking control, the new actual controller clarified asset injection plans, outlining a clear path for Jihua Group’s transformation. According to Tonglu Junheng’s commitment in the “Detailed Equity Change Report,” within the next 12 months, a small amount of assets will be planned for injection, not constituting a major asset restructuring, with Zhejiang Lumei New Materials Technology Co., Ltd. (“Zhejiang Lumei”) listed as a potential target.

Zhejiang Lumei is a high-quality enterprise within the Global New Materials system, with products that strongly synergize with Jihua Group’s dye business. On one hand, the new materials business to be injected will complement Jihua Group’s traditional dye operations, enriching the company’s product matrix and promoting its transformation from a single dye manufacturer to an integrated platform of “high-end new materials + fine chemicals.” On the other hand, Zhejiang Lumei’s technology and channel resources will deeply integrate with Jihua Group’s production capacity and customer network, enabling internal raw material supply and resource sharing, further enhancing profitability and risk resistance.

In terms of capital operation, this control rights change establishes an “A+H dual-platform” capital structure, effectively addressing the undervaluation of Global New Materials International in Hong Kong stocks and opening broader financing channels for Jihua Group. The valuation premium of new materials and fine chemical companies in the A-share market will help Jihua Group improve its capital operation capabilities, providing sufficient funds for R&D, capacity expansion, and industry integration.

The capital market highly recognizes the strategic value of this acquisition and Jihua Group’s growth potential. As of February 25, Jihua Group’s closing price was 8.40 yuan, up 28.2% from the pre-suspension price of 6.55 yuan, with a cumulative increase of 43.10% over the past three months. Behind the stock price rise is investor confidence in the company’s recovery and transformation prospects.