Analysis of the Investment Value of Dongyangguang's RMB 28 Billion Acquisition of Chindata China for Strategic Transformation

In September 2025, Dongyangguang (600673.SH), together with its controlling shareholder Shenzhen Dongyangguang Industrial Development Co., Ltd. and other investors, completed the delivery of the acquisition of 100% equity of Chindata’s China business through cash payment with a total consideration of

[0][1]. This transaction sets a new record as the largest M&A transaction in China’s IDC (Internet Data Center) industry to date [2].

• Dongyangguang contributes
  RMB 3.5 billion
  to subscribe for 46.67% equity of Dongshu No.1
• Controlling shareholder Shenzhen Dongyangguang Industrial contributes
  RMB 4 billion
  to hold 53.33% equity
• The syndicate provides approximately
  RMB 20.5 billion
  in M&A loans
• After the acquisition, Dongyangguang’s shareholding ratio in Dongshu No.1 will not exceed 30% [3]

This sophisticated transaction structure achieves the effect of “small equity ratio leveraging large-scale acquisition”, while effectively isolating debt risks at the SPV level, which will not have a significant adverse impact on the overall financial condition of the listed company [3].

Dongyangguang’s traditional main business spans aluminum foil processing, chemical manufacturing, biomedicine and other fields, making it a diversified traditional manufacturing enterprise. Facing the explosive demand for computing power driven by AI large models and generative AI, the company chose to quickly enter the core track of the digital economy - data centers through M&A [1][2].

As stated by Zhang Yushuai, Chairman of Dongyangguang Group, the acquisition of Chindata is an important step for the group to support the construction of a national integrated computing power network. The company will focus on promoting resource integration between the two parties in the fields of liquid cooling materials, AIDC, clean energy, etc., and is committed to building a super-large-scale green smart computing power center serving artificial intelligence [2].

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Chindata is a neutral third-party super-large-scale computing power infrastructure solution operator, focusing on the planning of information technology industry ecological infrastructure, and has formed a cluster of super-large-scale information technology infrastructure bases covering areas around the capital, Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area, Zhongwei, Qingyang and other northwest regions [3]. Its scale ranks

in the domestic market, second only to GDS Holdings [2].

• Wutong Shuji Technology Co., Ltd.
• Hebei Sida Ge Data Technology Investment Co., Ltd.
• Datong Qinshu Information Technology Co., Ltd.
• Hebei Qinshu Information Technology Co., Ltd., etc. [3]

According to the audit report issued by Tianjian Certified Public Accountants, the consolidated main financial indicators of Chindata’s China business for the most recent year and period are as follows [3][4]:

Financial Indicator	2024	January-May 2025	Year-on-Year Change
Operating Revenue	RMB 6.048 billion	RMB 2.608 billion	Remain strong growth
Net Profit	RMB 1.309 billion	RMB 0.745 billion	Annualized approximately RMB 1.788 billion
Net Profit Margin	21.7%	28.6%	Significant improvement
Total Assets	RMB 21.639 billion	RMB 21.871 billion	Stable
Net Assets	RMB 8.717 billion	RMB 9.504 billion	Continually increasing

1. Strong Profitability
   : The net profit margin of 21.7% is at a
   leading level
   in the data center industry, significantly higher than peers such as GDS Holdings (18.1%) and 21Vianet (2.2%) [4]
2. Sufficient Growth Momentum
   : The net profit margin reached 28.6% in the first five months of 2025, an increase of nearly 7 percentage points compared to the full year of 2024
3. Healthy Cash Flow
   : As a “cash cow” enterprise, Chindata continues to bring considerable returns to Bain Capital [2]

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The total consideration of this acquisition is RMB 28 billion, and the corresponding valuation indicators are as follows [3][4]:

Valuation Indicator	Value	Industry Comparison
Price-to-Earnings Ratio (PE)	21.4x	Industry average 25-35x
Price-to-Book Ratio (PB)	3.2x	Industry average 3-5x
Evaluation Appreciation Rate	221.7%	Within a reasonable range

• The 21.4x PE is lower than the average valuation level of the data center industry (25-35x), showing a certain valuation discount
• Compared with comparable companies such as GDS Holdings and 21Vianet, Chindata has stronger profitability but lower valuation multiples

• In August 2023, Bain Capital completed the privatization of Chindata for RMB 22.8 billion [2]
• Only two years later, it sold the China business for RMB 28 billion, with an appreciation rate of approximately 22.8%
• Bain Capital obtained investment returns of over RMB 5 billion in this process [2]

• The income approach was used for evaluation, and the market value evaluation conclusion as of the evaluation benchmark date of May 31, 2025 was
  RMB 29.093 billion
  [3]
• The final transaction consideration of RMB 28 billion is slightly lower than the evaluation value, reflecting the prudence of pricing

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Dongyangguang has

in Shaoguan, Ulanqab, and Yichang, which can provide low-cost green power supply for Chindata, forming a “south-central-north three-core” computing power layout [1]. This synergy will significantly reduce Chindata’s operating costs and improve its gross profit margin and market competitiveness.

Dongyangguang has laid out electronic fluorinated fluids since 2016, forming a composite capability from core materials to system solutions,

[1]. As the power consumption of AI chips continues to rise (the power consumption of NVIDIA Rubin platform cabinets has reached more than 1000kW), liquid cooling technology has become a must-have solution for temperature control in smart computing centers [5][6].

• IDC predicts that the penetration rate of liquid cooling in large-scale clusters will reach
  20%
  in 2025, and is expected to exceed
  37%
  in 2026 [6]
• The compound annual growth rate of China’s liquid cooling server market will reach
  46.8%
  from 2024 to 2029, and the market scale will reach
  USD 16.2 billion
  in 2029 [5]
• 3M’s withdrawal from the PFAS market provides a window for domestic fluorinated fluid enterprises to realize domestic substitution [5]

• Optical Communication
  : Through strategic investment in Vertilite’s VCSEL chips, the technical puzzle of high-speed interconnection in data centers has been completed [1]
• Power Components
  : The laminated foil patent technology provides efficient energy management solutions for high-power AI servers, and
  megawatt-level orders
  have been signed [1]

After the completion of the acquisition, Dongyangguang will obtain Chindata’s high-quality customer resources, including leading Internet enterprise customers such as

. Historical data shows that ByteDance’s revenue contribution to Chindata once reached as high as [2]. This deep binding relationship ensures stable revenue sources and a foundation for business growth.

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According to data from Zhongshang Industry Research Institute [7]:

Indicator	2024	2025(E)	2026(E)
Market Size	RMB 280 billion	RMB 318 billion	RMB 362.1 billion
Rack Scale	-	948,000 units	Nearly 1 million units
Liquid Cooling Market	RMB 12 billion	RMB 17.7 billion	RMB 31.08 billion

The report “Current Situation and Future Trends of Computing Power Infrastructure Industry Development” shows [7][8]:

• The total supply scale of China’s data centers will exceed 25GW in 2025
• By 2026, China’s smart computing power demand will account for 71% of new demand
• The global generative AI market scale is expected to approach
  USD 300 billion
  in 2028 [8]

• The national “East Data West Computing” project drives the green and large-scale development of the industry
• The “Double Carbon” target promotes the PUE value of data centers to drop below 1.25
• Liquid cooling technology, cold plate type (accounting for 65% of the market) and immersion liquid cooling (annual growth rate over 30%) are experiencing explosive growth [5]

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Risk Type	Risk Description	Impact Level
Integration Risk	There are cultural differences between traditional manufacturing enterprises and technology enterprises, which may affect the realization of synergies	Medium
Customer Concentration Risk	Chindata is highly dependent on ByteDance (historical proportion exceeds 80%)	High
Macroeconomic Risk	AI demand falling short of expectations may affect the growth of the data center industry	Medium
Goodwill Impairment Risk	The 221.7% evaluation appreciation rate forms high goodwill, which has impairment risks	High
Technology Iteration Risk	The rapid iteration of liquid cooling technology may affect existing technological advantages	Medium

• Transaction Structure Design
  : Debt risks are isolated at the SPV level and will not affect the listed company [3]
• Customer Diversification
  : Chindata has introduced leading cloud vendors such as Alibaba, reducing dependence on a single customer
• Technology Reserve
  : Dongyangguang has deep technical accumulation in liquid cooling, power supply and other fields
• Industry Prosperity
  : The explosive demand for AI computing power drives the rapid growth of the data center industry

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According to Jinling AI Data Analysis [0]:

Financial Indicator	Value	Industry Position
Market Capitalization	RMB 85.41 billion	-
P/E Ratio (TTM)	88.23x	High
P/B Ratio	8.77x	High
ROE	10.35%	Medium
Net Profit Margin	6.77%	Low
Current Ratio	0.93	Slightly Low

• Chindata’s 2024 operating revenue was RMB 6.048 billion, which will significantly increase Dongyangguang’s revenue scale
• Guosheng Securities predicts that the company’s revenue will reach RMB 15.7 billion, RMB 24.8 billion, and RMB 30 billion in 2025-2027 respectively [1]

• Chindata’s annualized net profit is approximately RMB 1.788 billion, and based on a 30% shareholding ratio, it can contribute approximately RMB 536 million in investment income
• After the realization of synergies, the overall profitability is expected to be further improved

• DCF valuation shows that the probability-weighted value is
  RMB 29.00
  , which is basically the same as the current stock price of RMB 29.15 [0]
• Under the optimistic scenario, the target price can reach
  RMB 49.64
  , implying a 70% upside potential [0]

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1. ✅
   Reasonable Valuation
   : 21.4x PE is lower than the industry average, and the acquisition pricing is prudent
2. ✅
   High-Quality Target
   : Chindata has strong profitability (21.7% net profit margin), ranking among the top in the industry
3. ✅
   Significant Synergies
   : Green power + liquid cooling + customer resources form a complete closed loop
4. ✅
   Prosperous Industry
   : The explosive demand for AI computing power drives the rapid growth of the data center industry
5. ✅
   Sophisticated Structure
   : Small equity ratio leverages large-scale acquisition, effectively isolating debt risks

1. ⚠️
   Integration Risk
   : Cultural differences between traditional manufacturing enterprises and technology enterprises
2. ⚠️
   Customer Concentration
   : High dependence on ByteDance
3. ⚠️
   Valuation Premium
   : The 221.7% evaluation appreciation rate forms goodwill pressure

Dimension	Rating
Strategic Transformation	★★★★☆ Positive
Valuation Rationality	★★★★☆ Reasonable
Risk-Return Ratio	★★★☆☆ Medium
Comprehensive Rating	Positive Watch

• Reasonable Valuation Range
  : RMB 21.60 - RMB 49.64
• Probability-Weighted Target Price
  : RMB 29.00
• Risk Warning
  : AI demand falls short of expectations, liquid cooling progress falls short of expectations, market competition risks, integration risks

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[0] Jinling AI - Company Profile and Financial Data of Dongyangguang (600673.SS)
[1] Guosheng Securities - In-Depth Research Report on Dongyangguang (600673.SH) “Lighting Up the ‘Light’ of AI Computing Power Integrated Platform”
[2] Securities Times - “Dongyangguang Spends RMB 28 Billion on Cross-Border Acquisition, the Largest M&A Case in China’s IDC History is Born”
[3] Dongyangguang Announcement - “Proposal on Jointly Increasing Capital in the Joint Venture with Related Parties to Acquire 100% Equity of Chindata China and Connected Transactions”
[4] Zhongyuan Securities - In-Depth Report on Runze Technology “2025: A New Generation of Smart Computing Centers Enter the Centralized Delivery Period”
[5] Securities Times Network - “Institution: AI Development Brings Power Consumption Problems, Liquid Cooling Solutions Gradually Become Clear”
[6] Xinhua Net - “AI Development Accelerates Liquid Cooling Technology Penetration, Multiple Listed Companies Lay out in Depth”
[7] Zhongshang Industry Research Institute - “2026 China Data Center Industry Market Prospect Forecast Research Report”
[8] SPD Bank International - “2026 Outlook for the Technology Industry: AI Algorithm Iteration Expands Computing Power Base”