Dongfeng Duoduo at the Center of the Storm: The "Conspicuous" Related Party Transactions

Subsidiary Henan Yifeng Electronic New Materials Co., Ltd. (hereinafter referred to as “Yifeng Electronics”) was named in CCTV’s “3.15” evening gala, causing the leading lithium hexafluorophosphate enterprise, Duofuduoduo (002407), to fall into a public opinion whirlpool. After a night of fermentation, on the morning of March 16, Duofuduoduo issued a statement clarifying the relationship, but Yifeng Electronics has now entered a suspension and investigation phase.

In fact, Duofuduoduo held a stake in Yifeng Electronics for just over a year. In early 2025, the listed company acquired a 54% stake in Yifeng Electronics from Duofuduoduo Group, controlled by the actual controller Li Shijiang. This transaction was only the tip of the iceberg in their large related-party dealings. Data shows that from January to November 2025, related-party transactions between the two companies approached 1 billion yuan.

It is understood that Duofuduoduo was founded and listed by Li Shijiang. At the end of 2025, the company completed a second-generation leadership transition, with Li Yunfeng, Li Shijiang’s son, taking over as chairman of the board. Regarding performance, after experiencing two consecutive years of net profit decline in 2023 and 2024, Duofuduoduo is expected to see a “recovery” in 2025, with an annual net profit turning profitable.

Yifeng Electronics has ceased production

Yifeng Electronics, named in CCTV’s “3.15” gala, has now stopped production and business activities.

On the evening of March 15, CCTV’s “3.15” gala exposed Sichuan Shufuxiang Food Co., Ltd. (hereinafter “Shufu Xiang”) and Chongqing Zengqiao Food Co., Ltd. (hereinafter “Zengqiao Food”) for bleaching and soaking chicken feet with hydrogen peroxide during processing, involving Yifeng Electronics’ hydrogen peroxide sales business.

Tianyancha’s business registration information shows that Yifeng Electronics is a controlled subsidiary of Duofuduoduo, with Duofuduoduo holding 54% of its shares. After the disclosure, Duofuduoduo issued an emergency statement on the morning of March 16, stating that Yifeng Electronics has not established any form of business cooperation, brand authorization, or product production relationship with the media-reported Shufu Xiang, Zengqiao Food, and others. Its production and sales activities are unrelated to the company and its controlling subsidiaries.

However, the “3.15” gala directly pointed out that Yifeng Electronics was involved in violations for providing unlabeled food additives and violating hazardous chemical management regulations. On March 16, according to CCTV News, the Huojia County Market Supervision Administration issued a notice stating that the issues involving Yifeng Electronics in the use of hydrogen peroxide to produce processed chicken feet were exposed. Huojia County attached great importance, immediately formed a joint investigation team, and conducted a comprehensive review of the involved enterprises overnight. Currently, the company has ceased production and business activities, and further investigations are ongoing.

It is understood that Duofuduoduo was established in 1999, mainly engaged in the research, production, and sales of high-performance inorganic fluorides, electronic chemicals, lithium-ion batteries, and materials. The company listed on the A-share market in May 2010 and has been listed for nearly 16 years.

A Beijing Business reporter reviewed Duofuduoduo’s historical announcements and found that its holding period of Yifeng Electronics was not long. In January 2025, the company announced a merger, planning to use its own funds of 28.45 million yuan to acquire a 54% stake in Yifeng Electronics held by Duofuduoduo Group. At that time, Duofuduoduo stated that the purpose of the related-party transaction was to enrich the company’s electronic chemical product portfolio.

However, the latest performance disclosure of Yifeng Electronics for 2025, released by Duofuduoduo on the morning of March 16, was not promising. That year, Yifeng Electronics achieved operating revenue of 31.152 million yuan, with a net profit of -3.3872 million yuan (unaudited), indicating a loss.

Looking at past financial data, in 2023, Yifeng Electronics achieved revenue of 53.9782 million yuan and a net profit of 295,600 yuan, still profitable; from January to October 2024, revenue was 36.2615 million yuan with a net loss of 18,010 yuan, already in loss.

Projected related-party transactions in 2026 are expected to reach 1.321 billion yuan

Duofuduoduo is a company founded by Li Shijiang. As of the end of Q3 2025, Li Shijiang directly held 10.29% of Duofuduoduo’s shares, making him the company’s largest individual shareholder; the second-largest shareholder is Duofuduoduo Group, held 68% by Li Shijiang, owning 2.39% of Duofuduoduo’s shares.

A Beijing Business reporter noted that behind the related acquisition of Yifeng Electronics’ equity, Duofuduoduo and its related party, Duofuduoduo Group, have built a vast network of related transactions. Data shows that from January 1 to November 30, 2025, transactions between Duofuduoduo and Duofuduoduo Group amounted to 979 million yuan (excluding tax). Additionally, in 2026, daily related-party transactions are projected to involve about 405 million yuan in sales to Duofuduoduo Group and its subsidiaries, 3 million yuan in services provided, 910 million yuan in procurement, and 2.5 million yuan in services received, totaling approximately 1.321 billion yuan.

Furthermore, Tianyancha’s full equity map shows that Duofuduoduo and Duofuduoduo Group jointly hold shares in four companies: Guangxi Ningfu New Energy Technology Co., Ltd. (“Guangxi Ningfu”), Duofuduoduo Isotope Technology (Henan) Co., Ltd. (“Isotope Technology”), Zhejiang Zhongning Silicon Industry Co., Ltd., and Henan Fluorine-based New Materials Technology Co., Ltd. (“Fluorine New Materials”).

According to Duofuduoduo’s historical announcements, the company increased capital in Isotope Technology, Fluorine New Materials, and Guangxi Ningfu in March, June, and December 2025, respectively. The capital increases were 103 million yuan, 23.0294 million yuan, and 1 billion yuan.

Business consultant and corporate strategy expert Huo Hongyi told a Beijing Business reporter that the main purpose of capital increases is usually to strengthen supply chain coordination, such as supporting upstream and downstream companies, consolidating raw material supplies, or expanding product application scenarios. It may also be aimed at binding the interests of related parties to enhance cooperation stability.

Additionally, Tianyancha’s business registration shows that on February 10, 2026, Henan Jafu New Materials Co., Ltd., jointly held by Duofuduoduo and Duofuduoduo Group, was canceled. As of the latest, the company was owned 75% by Duofuduoduo and 25% by Duofuduoduo Group.

Li Yunfeng just “took over” as chairman

Analyzing the ownership structure of Duofuduoduo and its related parties, besides Li Shijiang, his son Li Yunfeng, daughter Li Lingxiao, and brothers Li Shibin and Li Shixuan are involved. Shareholding data shows Li Yunfeng is the second-largest shareholder of Duofuduoduo, holding 10% of the shares; Li Lingxiao, Li Shibin, and Li Shixuan hold approximately 8%, 6%, and 2%, respectively.

Amid the trend of “second-generation” succession, the 75-year-old Li Shijiang has also begun to promote the next generation to the forefront. In December 2025, his son Li Yunfeng officially “took over” as chairman of Duofuduoduo. Prior to this, in 2024, Li Shijiang served as chairman with an annual salary of 1.2 million yuan, while Li Yunfeng was general manager and director, earning 1.201 million yuan annually.

With the second-generation succession, Duofuduoduo’s fundamentals also showed signs of “recovery” in 2025. Financial data indicates that from 2022 to 2024, the company’s revenue was approximately 12.358 billion yuan, 11.938 billion yuan, and 8.207 billion yuan, respectively; net profits were about 1.958 billion yuan, 511 million yuan, and -308 million yuan. According to the company’s 2025 performance forecast, it expects to achieve a net profit attributable to shareholders of 200 million to 280 million yuan, turning losses into profits.

As of the end of Q3 2025, Duofuduoduo had approximately 5.728 billion yuan in cash and equivalents; it also had long-term loans of 4.176 billion yuan and short-term loans of 1.322 billion yuan, totaling about 4.998 billion yuan. “The core issue behind this is low capital allocation efficiency; idle funds have not effectively covered financing costs,” said Yuan Shuai, deputy secretary-general of the Zhongguancun IoT Industry Alliance.

In the secondary market, Duofuduoduo experienced a significant stock price surge in the second half of 2025, with a cumulative increase of 238.47% from July 16 to November 17, 2025. However, the stock price then fluctuated and declined. As of the close on March 16, Duofuduoduo’s stock price slightly fell by 0.97%, closing at 30.55 yuan per share, with a total market value of 36.37 billion yuan.

Additionally, it is worth noting that at the end of 2025, Li Shijiang’s daughter, Li Lingyun, planned to cash out by reducing her holdings through centralized bidding and block trades, with a total reduction of no more than 2.3107 million shares (accounting for 0.2% of the total share capital after excluding the company’s repurchase accounts).

The Beijing Business reporter sent interview inquiries to Duofuduoduo regarding these matters but had not received a response as of the time of publication.

Beijing Business Reporter Wang Manlei