Produced by | Frontline of Entrepreneurship
Art Editor | Xing Jing
Reviewed by | Song Wen

On November 15, Truelove Home unveiled an announcement regarding equity changes. AI technology company Tungee Yuanqing initially acquired a 29.99% stake in Truelove Home from Truelove Group at a cost of 1.2 billion yuan. Subsequently, Tungee Yuanqing plans to acquire an additional 15% of shares through a partial tender offer.

This move implies that once all transactions are finalized, Tungee Yuanqing will emerge as the controlling shareholder of Truelove Home, the first A-share listed blanket enterprise.

Following Tungee Yuanqing's equity participation announcement, Truelove Home has garnered significant investor attention in the capital market, with its stock price surging continuously. Based on the acquisition price, Tungee Yuanqing's paper profit exceeds 1.5 billion yuan.

As a special purpose vehicle (SPV) established by AI unicorn Tungee Technology for this acquisition, what transformations will Tungee Yuanqing bring to the traditional blanket enterprise using AI technology post-equity participation? Can it reverse Truelove Home's declining profits?

1. Controlling Stake Shift: AI Firm Takes Over 'Blanket King' Amidst Declining Performance

Public information reveals that Truelove Home traces its roots back to a home textile enterprise under Truelove Group in 1995. It ventured into Raschel blanket production by acquiring other blanket factories. Leveraging its professional technology and scale advantages in the Raschel blanket sector, Truelove Home earned the title of 'World Blanket King.'

In 2021, Truelove Home listed on the main board of the Shenzhen Stock Exchange, becoming the first A-share listed blanket enterprise. However, post-2022, the company's profitability declined due to trade frictions, rising raw material prices, and escalating sea freight costs.

Data indicates that in 2022, Truelove Home's operating revenue and net profit after deducting non-recurring gains and losses stood at 979 million yuan and 108 million yuan, respectively. By 2024, these figures had dropped to 879 million yuan and 59.3 million yuan, respectively. Amidst continuously declining profits, Truelove Home urgently requires transformation.

The AI industry chain, a booming sector in recent years, has attracted substantial investor attention. However, currently, only upstream computing power and hardware companies are profitable, while downstream AI application firms are predominantly incurring losses. Thus, AI technology companies must demonstrate that downstream AI applications can achieve profitability under AI empowerment.

Driven by various factors, Tungee Technology has embarked on acquiring a controlling stake in Truelove Home.

Founded in 2016, Tungee Technology is an AI company catering to the sales domain. In 2017, just a year after its inception, Tungee Technology launched China's first intelligent sales SaaS product, 'Tungee Customer Expansion.'

Through continuous深耕 (deep cultivation) in the intelligent sales field, Tungee Technology's products gradually gained market traction. By 2021, the company had served over 10,000 customers. It secured financing from renowned investment institutions such as Sequoia Capital China, Qiming Venture Partners, Alibaba, and Unity Venture Capital.

In 2025, Tungee Technology introduced the 'Tanyu Intelligent Agent,' a full-process AI agent for e-commerce, expanding its overseas market services. Notably, nearly 90% of Truelove Home's revenue stems from overseas markets, showcasing significant complementarity with Tungee Technology's AI products.

For instance, Tungee Technology's global enterprise knowledge graph can swiftly match overseas buyers, reducing the customer development cycle from three months to one month. The AI quality inspection system can further decrease the product defect rate from 1.5% to 0.8%. Additionally, policies encourage integrating traditional manufacturing with AI to foster new quality productive forces.

However, internal integration between the two companies may encounter significant hurdles. For example, there are substantial differences in management styles and corporate cultures between the two enterprises. Whether Truelove Home can achieve a remarkable transformation with Tungee Technology's AI technology remains uncertain.

In this regard, 'Frontline of Entrepreneurship' sought insights from Truelove Home on how Tungee Technology will empower its existing business in the future. Amidst the overall sluggish blanket industry, can relying solely on AI technology revive the company's performance?

If internal integration falls short of expectations and performance struggles to stabilize and rebound, will Tungee Technology subsequently revitalize the enterprise through asset injections?

Truelove Home informed 'Frontline of Entrepreneurship' that post-merger, the listed company can leverage its major shareholder's advantages in big data and AI large model applications to seek new performance growth points. Utilizing AIGC technology in marketing, sales, production, and supply chain management can enhance efficiency and reduce production costs.

2. Original Controller to Receive 1.1 Billion Yuan in Cash, New Shareholder's Paper Profit Exceeds 1.2 Billion Yuan Amidst Stock Price Surge

Given the capital market's high expectations for AI + manufacturing, Truelove Home has been in high demand since its ownership transfer to Tungee Technology.

Prior to the equity transfer announcement, Truelove Home's stock price hovered around 30 yuan per share. Since the announcement, its stock price has hit the upper limit for seven consecutive days, peaking at 64.92 yuan per share. Although it has recently declined somewhat, it still closed at around 46 yuan per share, up over 50% from before the announcement.

This transaction has also yielded substantial profits for Tungee Technology. In this deal, Tungee Technology initially acquired 43.19 million shares, representing 29.99% of the company's total share capital, from Truelove Group through an agreement transfer at 27.74 yuan per share, totaling approximately 1.2 billion yuan.

Concurrently, based on the completion of the above share transfer, Tungee Technology intends to issue a partial tender offer to all Truelove Home shareholders except itself. The tender offer aims to acquire 21.6 million shares, accounting for 15% of the company's total share capital, with a transaction amount nearing 600 million yuan. Truelove Group has committed to effectively declare and pre-accept the offer with approximately 18.73 million shares (13.01% of the company's total share capital).

Based on the transaction price and the number of shares traded, Tungee Technology's paper profit from its equity participation exceeds 1.2 billion yuan.

Apart from Tungee Technology's paper profit, Zheng Qizhong, Truelove Home's original controller, has also reaped significant gains. Public information reveals that Zheng Qizhong was born in 1964. In the 1980s and 1990s, shortly after China's reform and opening up, when the private economy in Zhejiang Province was thriving, Zheng Qizhong returned to Yiwu City, Zhejiang Province, and became one of the pioneering business operators.

Subsequently, with the robust development of the domestic textile and light industry, Zheng Qizhong entered the wool industry and established his wool factory in 1995. In 2003, Zheng Qizhong officially founded Truelove Group and embarked on diversified development, with businesses spanning blanket home textiles, nylon new materials, real estate, environmental protection engineering, etc.

In 2010, Truelove Group initiated the establishment of Truelove Home and injected the group's blanket business into it. Under Zheng Qizhong's leadership, Truelove Home successfully listed on the main board of the Shenzhen Stock Exchange in 2021.

At that time, the company's IPO issue price was 18 yuan per share. Subsequently, due to dividend distribution and stock distribution, the initially issued price after rights adjustment was approximately 11.41 yuan per share.

Based on the equity transfer price of 27.74 yuan per share, Truelove Group's equity transfer price has surged by over 140% compared to the issue price, enabling Zheng Qizhong, Truelove Home's original controller, to realize substantial profits.

Wind data shows that Truelove Group directly holds 66.7656 million shares of Truelove Home, accounting for 46.36% of the company's share capital. Zheng Qizhong personally holds 65% of Truelove Group's shares. Based on the total price of 1.8 billion yuan for the equity transfer and tender offer, Zheng Qizhong will personally receive over 1.1 billion yuan in equity transfer proceeds in this ownership transfer.

In this regard, 'Frontline of Entrepreneurship' sought clarification from Truelove Home on why Zheng Qizhong, the original controller, would relinquish the controlling stake in Truelove Home. Subsequently, after ceding control, will Truelove Group maintain business dealings with Truelove Home? As of press time, Truelove Home had not provided a positive response.

3. Mimicking Ensign Robot's Merger and Acquisition, Facing Challenges in Raising 1.8 Billion Yuan for the Deal

Although Truelove Home has announced a detailed equity transfer plan, uncertainty lingers over whether it can successfully acquire a controlling stake in Truelove Home.

Tungee Technology's equity acquisition strategy involves initially acquiring a 29.99% stake in Truelove Home through equity transfer, thereby avoiding triggering a comprehensive tender offer upon acquiring 30%. Subsequently, it aims to acquire an additional 15% stake through a partial tender offer, securing Tungee Technology's controlling stake in Truelove Home.

This operational approach aligns with Ensign Robot's acquisition of Swancor Holdings. Currently, Ensign Robot's acquisition of Swancor Holdings has received regulatory approval, and Ensign Robot has officially acquired a controlling stake in Swancor Holdings.

Similar to humanoid robots, the integration of AI and traditional industries is also a direction strongly supported by the state. Therefore, there is a high probability that Tungee Technology's acquisition of a controlling stake in Truelove Home will receive regulatory approval. However, raising the 1.8 billion yuan in funds remains the core factor restricting whether Tungee Technology can successfully acquire a controlling stake in Truelove Home.

Public information reveals that since its inception in 2016, Tungee Technology has undergone angel round, Series A, Series B, and Series B+ financing, with cumulative financing of approximately 500 million yuan.

As Tungee Technology is not listed, its financial data is not publicly available, and its revenue and profit situation remain unknown to the outside world. However, given that most Chinese AI and SaaS companies are currently incurring losses, it is unlikely that Tungee Technology will achieve significant profitability. Therefore, its operating cash flow is probably not ideal.

(Figure/Tungee Technology's official website)

The acquisition of a controlling stake in Truelove Home costs approximately 1.8 billion yuan, undoubtedly a substantial sum for Tungee Technology, which has previously raised limited funds and is still in the expansion stage.

Most technology companies in the expansion stage still rely on primary market financing to meet their funding needs. According to the '2025 Global Unicorn List' released by Hurun Research Institute in November 2025, Tungee Technology is valued at 9.5 billion yuan.

Although the valuation is high, raising this merger and acquisition fund in the short term is not straightforward. Primary market equity financing is time-consuming and requires recognition from numerous investors.

How Tungee Technology will secure this acquisition fund is also a concern for the outside world. In the announcement, Tungee Technology only stated that the funding source is its own or self-raised funds.

Previously, Ensign Robot's acquisition of Swancor Holdings' shares primarily involved signing a syndicated loan contract with Shanghai Pudong Development Bank, China Merchants Bank, etc., to obtain a merger and acquisition loan of no more than 1.39 billion yuan for the acquisition.

Whether Tungee Technology can secure bank loans specifically for mergers and acquisitions remains to be seen.

In this regard, 'Frontline of Entrepreneurship' sought insights from Truelove Home and Tungee Technology on whether Tungee Technology, as a technology company still in the expansion stage, has the capacity to raise nearly 1.8 billion yuan in acquisition funds in the short term. Have the acquisition funds of Tungee Technology arrived yet? What is the primary source of these acquisition funds? Are they obtained through bank loans or from other third-party financial groups?

What is the present revenue and profit status of Tungee Technology? Should it secure loan funds, will Tungee Technology be capable of repaying them through its own operational activities in the foreseeable future?

Truelove Home has merely indicated that the acquisition funds for Tungee Technology are sourced from its own reserves or funds raised independently.

At present, the change in ownership of Truelove Home appears to be a mutually beneficial scenario. For Zheng Qizhong, the original controller, offloading the company's shares at a price substantially higher than the issue price, especially amidst a downturn in corporate performance, will undoubtedly yield him substantial profits. For Tungee Technology, it also faces the challenge of demonstrating that its AI technology can effectively empower traditional manufacturing. Truelove Home, struggling with sluggish performance, is in dire need of leveraging AI and other emerging technologies to achieve self-renewal.

Regarding whether Tungee Technology can successfully acquire a controlling stake in Truelove Home as planned, and whether Truelove Home's performance will genuinely enhance post-acquisition, 'Frontline of Entrepreneurship' will maintain a close watch.

*Note: The featured image and any uncredited images within the article are sourced from Shutterstock, adhering to the VRF protocol.