On the evening of November 13, 2025, Kangda New Materials announced its decision to terminate the planned acquisition of at least 51% equity in BeiYi Semiconductor Technology (Guangdong) Co., Ltd. (hereinafter referred to as "BeiYi Semiconductor"). The company signed a "Termination Agreement" with the counterparty, marking the abrupt end of this cross-border M&A deal, which was originally intended to be executed via cash and involved an estimated expenditure exceeding 275 million yuan. This development reflects listed companies' growing emphasis on "prudent stability" in capital operations.

**Transaction Background: Repeated Restructuring Fails to Boost Performance; Semiconductor M&A Hits Roadblock** As a leading domestic manufacturer of adhesives and specialty resin materials, Kangda New Materials has expanded its business through acquisitions since 2017, including purchases of Bikong Technology (military electronics), Caijing Optoelectronics (electronic information materials), and Jingcai Technology (semiconductor materials). However, frequent acquisitions have failed to deliver sustained profit growth: From 2022 to 2024, the company's net profit attributable to shareholders plummeted from 48 million yuan to a loss of 246 million yuan, with a 155 million yuan goodwill impairment in 2024 being the primary cause of the deficit.

BeiYi Semiconductor specializes in R&D and production of power semiconductor modules, with core products including IGBT, PIM, and IPM, applicable in fields such as new energy vehicles and industrial control. The company operates a 16,500-square-meter production base with nine packaging lines and over 170 advanced equipment units, while also advancing a wafer fab project. Based on its Series B+ financing round in May 2024, BeiYi Semiconductor was valued at approximately 2.5 billion yuan. Kangda New Materials had initially aimed to integrate its technological resources to synergize with its existing semiconductor material businesses, such as CMP polishing fluids and sputtering targets.

**Reasons for Termination: Multiple Risk Factors** The announcement cited "unsatisfactory progress in due diligence and audit work, as well as failure to reach consensus on transaction terms" as the reasons for termination. However, deeper analysis points to three major risks:

1. **Financial Pressure and Capital Allocation**: Kangda New Materials reported a 246 million yuan loss in 2024. Although it returned to profitability in the first three quarters of 2025 (net profit of 80–90 million yuan), financial strain from previous losses remains. A 275 million yuan acquisition at this stage would further exacerbate cash flow constraints.

2. **Target Qualifications and Valuation Disputes**: While BeiYi Semiconductor holds orders in sectors like new energy and industrial robotics, its wafer fab project faces significant funding gaps and long payback periods. Additionally, new products such as silicon carbide MOSFETs have yet to achieve stable profitability. Due diligence may have uncovered mismatches between revenue and profit data, questionable order authenticity, or issues like patent dependencies and technology licensing limitations, leading to valuation disagreements.

3. **Transaction Clause Discrepancies**: BeiYi Semiconductor’s shareholders likely maintained high valuation expectations, while Kangda New Materials’ risk-adjusted offer may have fallen short. Disputes over actual rights tied to controlling stakes—such as core technology control and management retention—further complicated negotiations.

**Industry Implications: Shifting M&A Logic** Kangda New Materials’ case highlights a new trend in A-share M&A markets: Under regulatory emphasis on "high-quality development," listed companies increasingly prioritize acquisition targets’ profitability and synergies over sheer scale expansion. For Kangda New Materials, terminating the deal represents both a risk-averse decision and a reflection on past M&A setbacks (e.g., goodwill impairments and asset divestments). Moving forward, the company may focus more on its core adhesive business and niche semiconductor materials, pursuing growth through technological upgrades rather than capital-driven expansion.

*Note: This article incorporates AI-generated content. The views expressed do not constitute investment advice and are for reference only. Market risks exist; investors should exercise caution.*