The proposed acquisition of Shenzhen Dama by a listed company has been terminated!

The M&A process is full of complexity and uncertainty ...

Earlier news showed that Shenzhen Dragon Source was going to be acquired by the listed company Langte Intelligent Technology. After the news came out, it attracted widespread attention from the market, and the stock price of Langte Intelligent Technology once reached the daily limit! Although the acquisition was not successful in the end, the two "protagonists" in the event are still shining in their fields.

The proposed acquisition of Shenzhen Dama by a listed company has been terminated!

Shenzhen Langte Intelligent Control Co., Ltd. (hereinafter referred to as "Langte Intelligent") was established in August 2003 and was listed on the Shenzhen Stock Exchange's Growth Enterprise Market in December 2020. It is a national high-tech enterprise specializing in intelligent controllers and intelligent products. It provides various intelligent controller products and corresponding solutions for smart homes and home appliances, energy storage, automotive electronics, and new consumer electronics.

Shenzhen Longzhiyuan Technology Co., Ltd. (hereinafter referred to as "Longzhiyuan") was established in 2006. The company covers smart camera and recording video products, smart home, smart security and ranging optoelectronic products.

The origin of this merger and acquisition case can be traced back to November 2024.

At that time, Langte Intelligent announced that it planned to acquire 55% of Longzhiyuan ’s equity in cash. After the completion of this transaction, Longzhiyuan will become the company’s holding subsidiary.

After preliminary consultation among all parties, before this transaction, the overall valuation of Longzhiyuan is no more than RMB 920 million, and the transaction price is no more than RMB 506 million. The final transaction price is based on the net asset value confirmed in the appraisal report issued by a qualified appraisal agency hired by Party A, and is determined by consultation among all parties and clarified in the formal transaction agreement.

After the announcement was issued, Langte Intelligent’s stock price rose by 20cm to 33.74 yuan, which can be said to have set a new high since July 2023.

About three months later, this high-profile merger and acquisition was announced to be terminated.

In January 2025, Langte Intelligent issued another announcement stating that the company and the counterparty had actively communicated and negotiated on matters related to this equity acquisition, but since the two parties failed to reach an agreement on the core terms within the agreed time, they were unable to sign a formal acquisition agreement . In order to safeguard the legitimate rights and interests of the company and all shareholders, the company decided to terminate this acquisition after careful study.

Langte Intelligence said it will continue to seek more development opportunities based on its established strategy to promote the company's sustained and healthy development.

Although the acquisition was terminated, the "win-win" value that both parties initially wanted to achieve through the merger is actually worth further investigation.

For Langte Intelligent, if this transaction is completed, the company will extend from the intelligent controller link to the downstream whole machine link in the electronic information industry, expand the design, production and sales of smart equipment in smart outdoor and smart home scenarios, and enhance its own brand operation capabilities. In addition, if the two parties finally sign a formal agreement, the company will obtain the operating control of Longzhiyuan, which will have a positive impact on the company's profitability and performance growth, and will be conducive to the further expansion and improvement of the company's business, bringing positive impact to the company's development.

It is understood that Langte Intelligence mainly operates through OEM and ODM models, and combines the corresponding raw material procurement, research and development, production and product sales systems to form its own profit model. The downstream market is the final export of products or services, and is also the key link for enterprises to achieve revenue and profits. Langte Intelligence extends its business downstream, closer to the final consumers, and increases its market share and brand influence . Acquisition is indeed a quick and effective method.

For both parties, this acquisition will also magnify potential business synergy advantages. Both parties are expected to achieve synergy in technology research and development, customer resource sharing, product line expansion, etc., and further enhance their market competitiveness.

Harmony means win-win, and division means everyone is king

By observing the development of Langte Intelligence and Longzhiyuan in recent years, we can see that if the two work together, both will win. Even if they fail to reach a cooperation, they can still achieve good results based on their own strength.

Langte Intelligence has been deeply engaged in intelligent controllers and intelligent products. It has currently established a product matrix with two major categories and six subcategories, with nearly 200 subdivided products. In the fields of smart home appliance control, smart Internet of Things, and energy storage, many of its technologies are at the advanced level in the industry.

According to the 2024 performance forecast released by Langte Intelligent, the net profit is expected to be positive and increase in the same direction. In detail, the net profit after deducting non-operating items in 2024 is expected to be 130 million to 155 million yuan. Year-on-year growth: 46.76%-74.98%. "Consumer electronics business continues to increase in volume and grow significantly" is one of the main reasons for the performance growth.

Longzhiyuan's main products include tracking cameras, rangefinders, night vision devices for smart outdoor use, as well as cameras, video doorbells, smart sensors and switches for smart homes. Public information shows that the "MP3 camera sunglasses" launched by the company have been quickly recognized by the international market and have become a popular choice for outdoor sports; in addition, the company is also a partner of well-known European and American companies such as Basspro, Auchan, and Aldi, and was awarded the national "Little Giant" enterprise honorary title in 2024.

There is not much latest news about Longzhiyuan's revenue. According to previous news, in 2019, the company achieved revenue of 103,392,656.91 yuan, a year-on-year increase of 23.77%; the net profit attributable to the parent company's shareholders was 8,849,355.19 yuan, a year-on-year decrease of 0.39%. The operating income in 2016, 2017, and January-June 2018 was 15.3317 million yuan, 51.8969 million yuan, and 40.3037 million yuan respectively; the net profit was -1.57 million yuan, 3.4185 million yuan, and 6.8589 million yuan respectively.

It is worth noting that while Longzhiyuan provides ODM services to a number of outdoor professional brands and smart home brands, it also pays great attention to brand development. It has launched its own brand "wosports" and entered cross-border e-commerce platforms such as Amazon.

By searching keywords on the Amazon platform, we can find that many products under the wosports brand are hot-selling, and some products have received over a thousand reviews.

Both Longzhiyuan and Langte Smart are involved in the smart home market. According to Statista data, the global smart home market size has reached US$101.07 billion in 2023, and is expected to grow from US$121.59 billion in 2024 to US$633.20 billion in 2032, with a compound annual growth rate of 22.9%. Markets such as North America, Asia Pacific, and Europe are booming. With the change in consumer demand, smart homes will transition from single-product smart devices to whole-house smart solutions in the future, covering multiple fields such as smart lighting, smart security, and smart control. Each sub-category contains huge business opportunities.

Chinese enterprises have gone from OEM exports and traditional foreign trade to independent brand models. In the past two years, the cross-border overseas wave has formed a situation where manufacturing factories and cross-border e-commerce brand sellers compete on the same stage. With the strong supply chain advantages of China, will Langte Intelligence and Longzhiyuan achieve greater success in the future? The answer should be yes.

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