Hengtong Co., Ltd. Plans to Acquire a 40% Stake in Aolong Biotechnology for 274 Million Yuan to Complete Its Biotechnology Product Portfolio | Quick Read Announcement

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Financial Associated, March 13 — (Reporter Chen Xiaoxiao) Hengtong Co., Ltd. (600226.SH) plans to improve its product layout in the biotech field by investing in an animal vaccine company.

The company announced tonight that it intends to acquire a 40% stake in Chongqing Aolong Biological Products Co., Ltd. (hereinafter referred to as “Aolong Biological”) held by Huapai Biotechnology (Group) Co., Ltd. (hereinafter referred to as “Huapai Biological”) using self-raised or internally raised funds, at a price of 274 million yuan. After the completion of this acquisition, the company will hold an interest in Aolong Biological but will not include it in its consolidated financial statements.

The announcement shows that this transaction has performance commitments. Huapai Biological promises that the net profit attributable to the parent company’s shareholders, after deducting non-recurring gains and losses, for the years 2026, 2027, and 2028, will not be less than 80 million yuan, 85 million yuan, and 90 million yuan respectively, with an average of no less than 85 million yuan over three years.

According to publicly available information, Aolong Biological was established in December 2007 with a registered capital of 50 million yuan. It is a modern biological products company integrating animal vaccine research and development, production, sales, and technical services. The company mainly produces vaccines for important animal diseases such as foot-and-mouth disease, brucellosis, and swine fever. In 2024, Aolong Biological achieved revenue of 142 million yuan and a net profit of 19.56 million yuan; from January to August 2025, it achieved revenue of 146 million yuan and a net profit of 64.84 million yuan.

Before this transaction, Aolong Biological’s equity structure was: Huapai Biological holding 96%, and Chongqing Paiheng Aotong Enterprise Management Center (Limited Partnership) holding 4%. Xie Jianyong owns 39.03% of Huapai Biological and is the actual controller of Aolong Biological.

The announcement further states that Aolong Biological has deep expertise in the ruminant vaccine field, with cattle and sheep vaccines leading in the domestic niche market. This transaction will enhance Hengtong Co.'s product layout in the biotech sector, providing a comprehensive product matrix covering veterinary vaccines, medicines, feed additives, and more.

Hengtong Co., Ltd. was founded in 1999, formerly Zhejiang Hanye Co., Ltd., and is the first listed company in Huzhou City. In April 2022, the company’s controlling shareholder changed to Hengtong Group Co., Ltd., with the actual controllers being Cui Genliang and Cui Wei, father and son. Cui Wei, born in 1986, has served as chairman since December 2022. Besides Hengtong Co., the Hengtong Group also controls other A-share listed companies such as Hengtong Optic-electric (600487.SH) and Mengtongli (301487.SZ).

Currently, Hengtong Co. focuses on two main businesses: “Biotech” and “Functional Copper Foil.” The biotech segment mainly includes veterinary medicines and feed additives, primarily veterinary chemical drugs and amino acid products in feed additives. The functional copper foil business is managed by its subsidiary Hengtong Copper Foil, producing lithium battery copper foil and electronic circuit copper foil. The first phase with 96 production lines has been fully put into operation, serving major clients like BYD and Penghui Energy, while the company is also advancing the construction of the high-end composite foil project in the second phase.

From 2022 to 2024, Hengtong Co.'s revenue has steadily increased from 602 million yuan to 1.335 billion yuan; its net profit attributable to the parent company was 482 million yuan, 166 million yuan, and 189 million yuan respectively. In the first three quarters of 2025, the company achieved revenue of 1.262 billion yuan, up 38.94% year-over-year; and net profit of 189 million yuan, up 0.68% year-over-year.