Introduction: Yongqiang, which was returned by a previous buyer, has now landed in the hands of the "Juice King." Is it still strong?

With a "market share of less than 1%," can Andly (605198.SH), the "concentrated juice leader," continue its cross-border AI story?

Ten days ago (on the evening of June 15), Andly announced its intention to acquire control of Ningbo Yongqiang Technology Co., Ltd. (hereinafter referred to as "Yongqiang Technology"), an "AI computing power material supplier." On the same day, it received a regulatory work letter from the Shanghai Stock Exchange. On the evening of June 23, Andly released its response to the regulatory letter, which showed that Yongqiang Technology's revenue in 2025 would be approximately RMB 224 million, relatively small compared to industry leaders such as Taikong Electronics and Shengyi Technology, with a market share of less than 1%.

However, Andly quickly stated that Yongqiang Technology already possesses R&D and production capabilities for high-speed copper clad laminate (CCL) products at the M8 level and above.

Previously, when announcing the acquisition of Yongqiang Technology, Andly listed a "prestigious" client roster for Yongqiang Technology: direct clients include Shenghong Technology, Shennan Circuit, Hushi Electronics (Husie Electronics), Shengyi Electronics, Founder Technology, Guanghe Technology, Xingsen Technology, Yueya Semiconductor, etc., with terminal clients including Inspur Information, Sugon, H3C, and Inno-Light. From AI servers to PCBs to optical modules, leading companies in various fields are clients of Yongqiang Technology. However, in the face of a market share of less than 1%, this "prestigious" client list pales in comparison.

Equally lackluster is Andly's stock price. From June 12 to 17, before the acquisition announcement, Andly's A-share price rose by a cumulative 46.16% over four consecutive trading days. By the close on June 17, Andly's stock price reached RMB 86.1 per share, with a total market capitalization of RMB 28.774 billion.

The Hong Kong stock also surged simultaneously. On June 16, Andly Juice (HKG: 2218.HK) opened with a spike of 80.44%, leading the market, and closed with a gain of 28.51% on the same day.

However, from June 18 to June 24, Andly's A-share price completed four consecutive declines, unable to halt the downtrend despite the Dragon Boat Festival holiday in between.

By the close on June 24, Andly's latest market capitalization was approximately RMB 23.28 billion, a shrinkage of about RMB 5.5 billion compared to June 17; the latest stock price was RMB 69.67 per share, a nearly 20% drop from the recent historical high of RMB 86.25 per share. Andly's Hong Kong stock also declined for several days after June 17, with the stock price at HKD 23.44 per share as of June 24, a 43% drop from HKD 41.14 per share on June 16.

01 Is Yongqiang Technology Really "Strong"?

In fact, before Andly, Yongqiang Technology had already been up for sale once, but the transaction was terminated due to failure to agree on the final price and other terms.

On January 16 of this year, Yanjiang Co., Ltd. (a diaper material company) passed a restructuring plan through its board of directors, planning to acquire a total of 98.54% equity in Yongqiang Technology from 28 shareholders through a combination of share issuance and cash payment, along with raising counterpart funding (supporting funds), to fully enter the semiconductor materials sector.

On May 18, Yanjiang Co., Ltd. officially announced the termination of the transaction, less than four months after the acquisition announcement. The main reasons for Yanjiang's termination of the acquisition of Yongqiang Technology were the failure to reach agreement on two key clauses: performance commitment and acquisition valuation pricing.

What Andly's shareholders should note is that Yanjiang's stock price started to rise before the acquisition announcement, with a more pronounced upward trend after the acquisition was made public, reaching a stock high of RMB 30.94 per share in March this year. However, on May 8, before the announcement of the acquisition termination, Yanjiang's stock price started to decline in advance, and the downtrend has continued to this day.

Currently, Yanjiang's stock price hovers around the RMB 12 range, a 60% drop from the March high.

Andly's stock price also "jumped the gun" before the company announced the acquisition of Yongqiang Technology and has now continued to decline with the issuance of the regulatory letter. Investors are not only concerned about the future trend but also whether the transaction will ultimately be completed and, if so, whether Yongqiang Technology can truly become Andly's second growth engine.

From the current information, Yongqiang Technology reported net losses of RMB 44.406 million and RMB 66.9581 million in 2024 and 2025, respectively, with a net profit of RMB 1.9271 million in the first quarter of 2026. Although it has achieved a temporary turnaround, its operating cash flow remains negative: RMB -52.3105 million in 2025 and RMB -9.208 million in the first quarter of 2026.

Yongqiang Technology's core revenue comes from traditional copper clad laminates (FR4), with 73% of its 2025 revenue derived from the FR4 category. In the traditional CCL field, FR4 is the most widely used epoxy resin glass fiber cloth-based CCL, long occupying the largest market share in the CCL market, with general applications including consumer electronics, communication equipment, automotive electronics, and industrial control.

However, this field has already formed a relatively concentrated landscape. In 2024, Kingboard Laminates, Shengyi Technology, and Taikong Electronics had global market shares of 14.3%, 13.6%, and 13.3%, respectively, with significant advantages in production capacity scale and cost control among the leading companies.

Facing strong competitors, Yongqiang Technology's difficulty in expanding its market share in FR4 is not low. Additionally, data shows that Yongqiang Technology's gross profit margin for its FR4 business remained negative in 2024, 2025, and the first quarter of 2026, but its proportion of total revenue continued to decline; meanwhile, the revenue proportion of high-speed CCLs continued to rise, with gross profit margins turning positive since 2025. Clearly, Yongqiang Technology is adjusting its business focus, shifting from FR4 to high-speed CCLs.

Currently, the CCL industry's market is divided into two main categories: first, the upgrading of terminal consumer products such as mobile phones, foldable screens, wearables, and in-vehicle smart products is driving the upgrade of CCLs from FR4 substrates to HDI (High-Density Interconnect); second, the improvement of AI computing power is driving high-speed CCLs towards extremely low dielectric loss (Df), with huge demand.

From a market demand perspective, high-speed CCLs are directly or indirectly related to AI computing power industries such as PCBs, optical modules, and AI servers, making them one of the hottest niche field (sub-sectors) currently.

Currently, high-speed CCLs are mainly dominated by Japanese, South Korean, and Taiwanese companies. Yongqiang Technology participates in this field with materials ranging from M4 to M9 grades (in the high-speed CCL field, the industry generally adopts the Megtron CCL grading system by Panasonic Electric Industry Co., Ltd. as a performance standard, where the higher the number after "M," the lower the dielectric loss of the material, the higher the signal transmission rate it can support, and the exponentially increasing technical difficulty and market threshold).

It should be noted here that the product generation shift in high-speed CCLs has moved from a 3-5 year update cycle to a 1-2 year update cycle, posing challenges not only to material R&D technology reserves and capital investment but also making companies more prone to falling into a "mismatch trap" due to mismatches between R&D, production cycles, and market supply and demand.

In addition to technological iterations, leading PCB companies typically require a 1-2 year observation period for the adoption of new CCL suppliers, from factory inspection approval to bulk material usage.

Yongqiang Technology states that its high-speed CCLs at the M6 to M9 levels have passed verification by terminal clients and achieved mass production (mass production standard defined as annual sales revenue exceeding RMB 1 million, not an industry-wide standard).

However, among the client list provided by Yongqiang Technology, even if verification is passed, it does not necessarily mean sales can be achieved.

For example, Yongqiang Technology has passed Yueya Semiconductor's testing (still requiring Yueya Semiconductor's terminal client testing certification) but has not yet generated mass production revenue from Yueya Semiconductor; additionally, previously, Hushi Electronics (Husie Electronics) participated in Yongqiang Technology's certification for M8-M10 grade materials with international leading terminal clients. In 2023, Yongqiang Technology had some sales revenue from Husie Electronics, but in 2025 and the first quarter of 2026, Yongqiang Technology has not conducted any transactions with Husie Electronics for over a year.

As of the first quarter of 2026, Yongqiang Technology's capacity utilization rate was only 39.62%.

02 Acquiring at a 5x Valuation to "Deplete" Cash Reserves: Is Andly Really Wealthy?

Just one month after the termination of the transaction with Yanjiang Co., Ltd., Yongqiang Technology entered into merger and acquisition discussions with Andly.

Andly stated that the total consideration for the acquisition of Yongqiang Technology is initially estimated at RMB 600-800 million, corresponding to an acquisition valuation of approximately RMB 1.2-1.4 billion. Based on the target company's unaudited financial data for 2025, the acquisition valuation premium rate is approximately 473%-569%, with a price-to-sales ratio of approximately 5.36-6.25.

As of the end of May 2026, Andly's monetary funds and trading financial assets totaled RMB 816 million, which are freely disposable cash reserves. In addition, Andly has obtained a total of RMB 500 million in credit lines from multiple banks, including comprehensive credit lines and working capital loans, all of which are unsecured credit lines with interest rates ranging from 2.3%-3%.

Overall, for Andly to fully pay for this transaction with its own funds would clearly deplete its current cash reserves. Andly has also acknowledged that this transaction will create short-term funding pressure for the company.

To control risks, Andly stated that it will negotiate with the transferor (shareholders of Yongqiang Technology) for staggered payments, extend the cycle to smooth cash flow pressure, and reasonably use low-interest credit lines to support its main business and control financing costs; additionally, Andly plans to optimize Yongqiang Technology's expense structure, accelerate cash collection, enhance its self-financing capabilities after the acquisition, and strictly control new large capital expenditures in the short term to ensure funding security.

Even before this acquisition, Andly had already made moves in cross-border technology layout (layout).

On March 31, Andly announced its intention to invest RMB 50 million to subscribe to a 16.67% stake in the Sichuan Dingxing Future Venture Capital Fund, which focuses on hard technology in electronic information, with 70% of its funds invested in angel and early-stage technology companies, laying the groundwork for entering the semiconductor sector in advance.

Before this cross-border acquisition plan, Andly's main business focused on the concentrated juice sector.

Andly, fully named "Yantai North Andly Juice Co., Ltd.," was established in 1996 and listed on the Hong Kong Stock Exchange in 2003 and the Shanghai Stock Exchange in 2020, with its market coverage expanding from domestic to global. According to Tianyancha, Andly's actual controllers are Wang An and Wang Meng, father and daughter, with Wang An also being honored by the media as the "Yantai Juice King."

Previously, the domestic concentrated juice industry was long dominated by four leading companies: Andly, SDIC Zhonglu, Haisheng Juice, and Shaanxi Hengtong, commonly known as the "Big Four" in the industry.

In recent years, affected by multiple factors such as capital chains, operational difficulties, bankruptcy restructurings, and lawsuits, Haisheng Juice and Shaanxi Hengtong, two of the original Big Four, have continued to divest capacity and gradually exit the industry. China's concentrated juice industry has fully transitioned from the traditional "Big Four" to a stable new landscape of "dual strong leadership," namely Andly + SDIC Zhonglu.

Although consumers rarely directly come into contact with concentrated juice, it is highly likely that the juice drinks you usually consume contain Andly's products.

In recent years, Andly has also increased its pace of industry acquisitions, acquiring Aksu Hengtong Juice assets in 2023, Yan'an Fuxian Hengxing Juice assets in 2024, and winning bids for two production lines from Yantai Haisheng in February 2026.

Currently, Andly has 11 production bases in seven provinces, including Shandong, Shaanxi, and Liaoning. Its core food products include: concentrated apple juice, pear juice, peach juice, hawthorn juice, NFC juice, lemon juice, orange juice, fruit pulp; pectin (breaking foreign monopoly for a century, the sole IPPA member in the Asia-Pacific region as an international pectin manufacturer) etc.

In addition, Andly has also developed other diversified businesses, including thermal power energy, real estate, Yangma Island Resort, and Kunlong Hot Spring Scenic Area. This year, it has extended its acquisition reach into the technology sector and added a venture capital fund layout in hard technology for electronic information.

It should be noted that after accelerating acquisitions in the early stages, Andly's performance has shown signs of decline.

In 2024, 2025, and the first quarter of 2026, Andly's revenue was RMB 1.418 billion, RMB 1.677 billion, and RMB 330 million, respectively, with a year-on-year revenue decline of 23.25% in the first quarter of 2026 and a net profit decline of 15.52% to RMB 73 million.

Perhaps due to shared concerns or lessons learned from previous cases, Andly, while acquiring businesses in the same industry and experiencing its own performance decline, naturally hopes to explore new markets and mitigate single-type market risks. However, is now a good time to enter the AI field?

As mentioned earlier, the PCB material supplier sector has already been dominated by giants that have captured most of the market, and the stock market, after the initial overenthusiasm for AI sector stocks, has learned to discern "true AI stocks" with technology and market presence.

Additionally, on June 17, Wu Qing, Chairman of the China Securities Regulatory Commission, stated at the 2026 Lujiazui Forum that strict investigations and punishments will be imposed on illegal and regulatory violations such as hitching a ride on technology trends, hyping concepts, and even market manipulation and insider trading. This serves as a warning to some listed companies that hitch rides on trends and hype concepts, prompting some funds to choose to withdraw from stocks without actual technology businesses to ensure funding security.

Currently, Andly has no experience in the integrated circuit electronic information interconnect material industry, lacking talent, technology, clients, and supplier reserves in related fields. Whether Yongqiang Technology can further gain market share, whether future high-end product revenue can achieve further growth, and whether the product structure can be further optimized remain uncertain.

What are your thoughts on Andly's cross-border acquisition?