Yifeng Electronics was called out at the 3.15 Gala, will Multifluor be affected?

The food processing violations exposed during the 3.15 Gala unexpectedly involved Duofuduo, a leading fluorochemical company, which has become the center of public opinion. Its controlling subsidiary, Yifeng Electronics, is an upstream supplier of the involved illegal chemicals. The company not only engaged in illegal supply and false labeling but also assisted downstream clients in evading regulations. As a subsidiary acquired over a year ago, Yifeng Electronics not only faces compliance issues but also has underwhelming performance. To quell public concern, Duofuduo urgently issued a statement attempting to distance itself, but this did not prevent its stock price from coming under pressure.

The 3.15 Gala revealed chaos in the food processing industry in Sichuan and Chongqing regions, with upstream suppliers directly pointing to Yifeng Electronics, a subsidiary of Duofuduo, a leading fluorochemical company listed on the A-share market.

Despite knowing that its hydrogen peroxide was banned for use in food processing, Yifeng Electronics still supplied products with false labels, even actively teaching downstream companies how to evade regulatory oversight.

Public reports show that this subsidiary, acquired by Duofuduo a year ago, not only has compliance issues but also underperforms financially.

Although Duofuduo quickly issued a statement to clarify that Yifeng Electronics has no business cooperation or brand licensing with the involved food companies, and that its production and sales activities are unrelated to the company, market doubts remain. After opening, Duofuduo’s stock price fluctuated and declined, closing at 30.55 yuan, down 0.97%.

It is worth noting that Yifeng Electronics was acquired by Duofuduo in January 2025. At that time, Duofuduo purchased a 54% stake for 28.45 million yuan using its own funds from Duofuduo Group, controlled by Li Shijiang, becoming its largest shareholder.

Duofuduo stated that Yifeng Electronics’s microelectronic ultra-pure chemical materials business could enrich its electronic chemicals segment. However, based on performance, this acquisition did not meet expectations; in 2025, its full-year revenue was 31.15 million yuan with a net loss of 3.3872 million yuan, accounting for less than 1% of Duofuduo’s total revenue, clearly not becoming a second growth driver.

In response to public opinion, Duofuduo announced on March 16 that Yifeng Electronics has no business cooperation or brand licensing with the involved food companies, and that its production and sales are unrelated to the company. It also emphasized that Yifeng Electronics holds complete operational qualifications and conducts business strictly within licensed scope.

However, this response did not fully dispel market doubts. On March 16, after a low open, Duofuduo’s stock price fluctuated and closed at 30.55 yuan, down 0.97%.

In fact, Duofuduo, as a high-tech enterprise specializing in fluorine, lithium, and silicon elements, is currently in a recovery phase. Benefiting from increased demand in the new energy vehicle and energy storage markets, sales of core products like lithium hexafluorophosphate and new energy batteries have surged.

Financial reports show that in the first three quarters of 2025, Duofuduo’s revenue was 6.729 billion yuan, down 2.75% year-on-year, but net profit attributable to shareholders turned around from a loss of 309 million yuan last year to a profit of 78 million yuan. According to the company’s forecast, full-year net profit in 2025 is expected to further grow to between 200 million and 280 million yuan.

Duofuduo’s “M&A Strategy”

The recent violation involving Yifeng Electronics has not only subjected this acquisition to market scrutiny but also spotlighted a series of capital moves by Duofuduo since its listing.

Since going public in 2010, Duofuduo has embarked on a path of capital integration. In 2011, to reduce dependence on upstream price fluctuations, the company spent 24 million yuan to acquire a 40% stake in Aohanqi Jingchang Fluorspar Co., Ltd., securing over 1.1 million tons of high-quality mineral resources with over 45% ore grade.

Starting in 2015, amid the booming new energy vehicle industry, Duofuduo accelerated its acquisitions. In May of that year, it announced a cooperation agreement with Xingtai County government to acquire a 72.5% stake in Hongxing Auto through equity purchase and capital increase, aiming to quickly obtain production qualifications for new energy vehicles and build a full industry chain from power batteries to complete vehicles.

In July and October 2015, Duofuduo invested a total of 160 million yuan in additional capital for Hongxing Auto, promising to restore full production within three months and setting a target of at least 1,000 vehicles in 2015.

From 2017 onward, as the price of core product lithium hexafluorophosphate plummeted, Duofuduo’s main business faced pressure, prompting a decisive “sell-off” strategy. In April 2017, the company sold stakes in four subsidiaries, raising about 35 million yuan. Among them, Shenzhen Duofuduo New Energy Technology was divested due to its involvement in the saturated LED market, Fuduoduo Industrial was sold due to its focus on catering and lodging outside core business, and even Partner Nano, involved in lithium battery materials, was spun off due to small scale and reliance on leased production.

In 2019, Duofuduo again pursued external acquisitions. In September, it bought a 70% stake in Luoyang Lanbao for 77 million yuan, attracted by its fluorite resources in Luoyang and Chongqing. However, the target company suffered over 200 million yuan in cumulative losses over three years and faced debt disputes and asset impairments. Facing operational difficulties, Duofuduo sold Luoyang Lanbao in June 2022 for 10 million yuan.

In March 2020, Duofuduo repurchased Partner Nano for 89.1 million yuan, which by then had its own production lines and significantly improved profitability. Financials show that from late 2017 to November 2019, Partner Nano achieved cumulative profits of about 16.7 million yuan, strengthening Duofuduo’s overall profitability amid its 2019 net loss of 398 million yuan.

In September of the same year, due to continued heavy losses and insolvency, Duofuduo transferred all shares of Hongxing Auto to Xingtai Longgang Investment for 209 million yuan, marking the end of its five-year “car-making dream.”

After multiple rounds of M&A and divestment, Duofuduo shifted its M&A logic from “large and comprehensive” to “focused and specialized.” In 2021, it decided to develop its lithium battery business in Nanning, establishing Guangxi Ningfu as the project entity, injecting assets in 2023 and 2025.

In April 2024, Duofuduo acquired an 80% stake in Ningxia Tianlin for 300 million yuan, crossing from inorganic fluorine to organic fluorine, opening a new business track. Simultaneously, the company announced plans to list its subsidiary Zhongning Silicon Industry on the Growth Enterprise Market and to prepare for listing on the Shenzhen Stock Exchange.

In January 2025, Duofuduo acquired Yifeng Electronics, which has become the focus of public attention, aiming to leverage its business to enrich its electronic chemicals product portfolio.

Key Figure: Li Shijiang

Duofuduo’s decade-long capital strategy is closely linked to its founder, Li Shijiang.

Born in 1950 in Wen County, Henan, Li Shijiang joined the Second Artillery Corps as a soldier at age 18.

After transferring to civilian life in 1973, he worked at Wen County Fertilizer Plant, rising from equipment deputy to technical department head, accumulating management experience at the grassroots level. In 1983, he was admitted to Henan Radio and TV University with the third-highest score in Wen County, and at age 40, he also entered the Party School graduate program.

In 1994, Jizuo City Zhongzhan Fluorspar Factory faced near bankruptcy due to outdated technology and limited product variety. Li Shijiang was entrusted with the task, leading 36 retired workers to form a “突击队” (task force) to take over.

At that time, China’s aluminum industry was booming, but key raw material—fluorspar—depended heavily on non-renewable resources. China’s reserves accounted for only 13% of global total, and traditional production caused severe pollution. Li Shijiang realized that technological innovation was the only way out.

He led the team in laboratory research, repeatedly tackling technical challenges, and in 1997 successfully developed a process for producing fluorosilicate sodium and high-quality white carbon black via fluorosilicate sodium method. This revolutionary process transformed waste from phosphate fertilizer production into valuable raw materials, opening a new fluorine resource pathway. The breakthrough revived the enterprise and earned recognition as a “National High-Tech Industrialization Demonstration Project” with 8 million yuan in national debt support.

In 1999, amid a wave of state-owned enterprise reforms, the 49-year-old Li Shijiang seized the opportunity, transforming the company into Duofuduo Chemical Co., Ltd., serving as chairman.

In 2006, prompted by expert advice, he shifted focus to the deep value of fluorine elements, targeting lithium hexafluorophosphate. At that time, lithium hexafluorophosphate, a core material for lithium batteries, was monopolized by Japanese companies, and Chinese firms could only import at high prices. Li Shijiang led a team to Japan for inspection but was refused entry; the factory’s staff bluntly said, “Chinese companies can’t do this.” This dismissive remark strengthened his resolve to master this “neck-breaking” technology.

Subsequently, Duofuduo embarked on a difficult R&D journey. The team faced financial crises and talent loss but persisted, investing over 200 million yuan, and in 2014 achieved large-scale production.

Just as Duofuduo began mass production, Japanese competitors launched a fierce price war to crush the emerging Chinese player. Li Shijiang responded calmly, controlling costs tightly, and with the rise of new energy vehicles, successfully navigated the crisis.

In May 2010, at age 60, Li Shijiang rang the bell at the Shenzhen Stock Exchange, making Duofuduo China’s first private listed enterprise in the inorganic fluorine chemical industry. With capital support, the company rapidly grew. Today, one in three lithium batteries worldwide uses Duofuduo’s lithium hexafluorophosphate, with a domestic market share of 35% and global share of 30%, breaking foreign monopoly.

In December 2025, the 70-year-old Li Shijiang officially stepped down as chairman. His son, Li Yunfeng, and daughter, Li Lingyun, became chairman and vice chairman respectively. Both had joined Duofuduo early, working from grassroots positions.

Li Yunfeng, the current chairman, previously served as HR manager, general manager assistant, and deputy general manager. Li Lingyun, as vice chairman, was also a former export manager at Jizuo City Zhongzhan Fluorspar Factory.

The recent public mention of the subsidiary during 3.15 may serve as a major test for Duofuduo’s new management team.

Editor | Chen Bin