--- title: "672 million strategic acquisition of Longtaidi + over 10% equity \"dual incentives,\" YouFa Group activates growth momentum both internally and externally" type: "News" locale: "en" url: "https://longbridge.com/en/news/288503029.md" description: "YouFa Group announced plans to acquire 53% equity in Cangzhou Longtai Di for 672 million yuan, entering the high-end composite steel pipe sector and improving its high value-added product matrix. At the same time, it launched a stock option and employee stock ownership plan, with total equity exceeding 10%, binding core personnel. Benefiting from this dual boost of strategic mergers and incentives, the company's stock price hit the limit up, aiming to accelerate globalization and high-quality development" datetime: "2026-06-03T02:00:15.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/288503029.md) - [en](https://longbridge.com/en/news/288503029.md) - [zh-HK](https://longbridge.com/zh-HK/news/288503029.md) --- # 672 million strategic acquisition of Longtaidi + over 10% equity "dual incentives," YouFa Group activates growth momentum both internally and externally On June 2, YouFa Group (601686.SH) announced that it plans to acquire 53% of Cangzhou Longtaidi's shares for cash of 672 million yuan. Upon completion of the transaction, Cangzhou Longtaidi will become a subsidiary of YouFa Group. With this acquisition, YouFa Group will strongly enter the high-end composite steel pipe sector, completing its national layout strategy in the traditional welded steel pipe field and enhancing its high value-added product matrix, showcasing a high-quality development pattern of "improving traditional business efficiency, upgrading high-end pipe materials, and solidifying domestic layout while expanding overseas." In addition, the company simultaneously launched the "Win-Win No. 2" stock option incentive plan and the "Co-Creation No. 2" employee stock ownership plan, with a total equity ratio exceeding 10%, deeply binding nearly 650 core employees. Boosted by this news, YouFa Group's stock price hit the daily limit on June 2. Strategic acquisition of Longtaidi to enhance the high value-added product matrix Cangzhou Longtaidi's main business includes the research, development, production, and sales of bimetallic composite steel pipes, fittings, and flanges. It is one of the largest non-listed companies in China with mature mechanical and cladding composite technologies and production capacity, and is currently developing production processes for laser cladding composite steel pipes. Its products have obtained comprehensive domestic and international customer certifications and are qualified suppliers for the National Pipeline Network, "Three Barrel Oil" companies, as well as international energy giants such as Shell, ExxonMobil, and BP, with products exported to 53 countries and regions. As the largest research, development, production, and sales enterprise of welded steel pipes in China, YouFa Group has ranked first in welded steel pipe production and sales for 20 consecutive years. This strategic acquisition is a key step for YouFa Group to focus on its core steel pipe business, improve its high value-added pipe product matrix, target marine engineering energy pipelines, and accelerate its globalization and overseas oil and gas pipeline business layout. Furthermore, YouFa Group stated that after acquiring Cangzhou Longtaidi, the company will empower it in various aspects such as scientific planning, standardized management, effective incentives, branding, credit, funding, raw material procurement, and market expansion. It can also form an industrial chain synergy with the JCOE oil and gas steel pipes and cladding bimetallic composite pipes acquired last year, further enhancing product market competitiveness, promoting better capacity release, expanding market share, and improving efficiency, thereby accelerating the implementation of the company's globalization strategy centered on steel pipes. To protect the interests of listed company shareholders, strict performance commitments have been set for this transaction, promising that Cangzhou Longtaidi's net profit for the year 2026 will not be less than 120 million yuan, with a cumulative net profit of not less than 270 million yuan from 2026 to 2027, and a cumulative net profit of not less than 450 million yuan from 2026 to 2028; after performance assessment and cash bonus extraction as agreed, the cumulative net profit over three years will still not be less than 420 million yuan. The transaction price will be paid in installments, with the second to fourth payments made based on the performance completion of the target company during each commitment period. Additionally, it is specifically stated in the terms that if the average net profit of the target company over three years does not exceed 82 million yuan, the total consideration for this transaction will be the equity transfer price paid by Party B in the first installment. This transaction fully reflects YouFa Group's effective risk control over the deal. Moreover, the company has also set up a tiered performance reward clause for Longtaidi's management team, which will help fully stimulate the operational vitality of the core team Implementing the "Dual Incentive" Plan, Deeply Binding Nearly 650 Core Talents with Over 10% Equity Share While promoting external mergers and acquisitions, YouFa Group has simultaneously launched the "Win-Win No. 2" stock option incentive plan and the "Co-Creation No. 2" employee incentive plan aimed at internal core talents. Among them, the "Win-Win No. 2" stock option incentive plan intends to grant no more than 117 million stock options, accounting for 7.95% of the company's total share capital, with an initial grant of 109 million options covering 497 middle management and core technical (business) backbones; the total fundraising cap for the "Co-Creation No. 2" employee stock ownership plan is set at 187 million yuan, with a total number of employees to be granted not exceeding 159. Based on the employee stock ownership plan purchase price of 4.34 yuan/share, the total number of underlying shares that can be purchased and held under this employee stock ownership plan is approximately 43.053948 million shares, accounting for 2.92% of the current total share capital of 1,471.963812 million shares. The performance assessment targets for both incentive plans are the same, focusing on the net sales of steel pipes and net profit attributable to the parent company after deducting non-recurring gains and losses from 2026 to 2027, and setting individual performance assessment coefficients. Compared to previous equity incentive plans, the new plans have added clauses comparing historical performance or industry data, making the assessment conditions more stringent. In the current market environment where the steel and welded pipe industries are on a downward trend, this particularly highlights the company's confidence and determination to break through and actively strive for progress. It is noteworthy that the two incentive plans collectively cover approximately 650 people, accounting for 5.77% of the company's total employees; the corresponding equity of the two plans accounts for as much as 10.87% of the total share capital. The high proportion of equity grants combined with a broad coverage will effectively motivate nearly 650 core talents, injecting strong internal momentum into the company's performance growth. Analysts point out that with the product structure upgrade and overseas market expansion brought by the consolidation of Longtaidi, combined with the operational momentum released by internal incentives, YouFa Group is expected to see continuous improvement in performance and a dual enhancement of valuation center in the next two years. If the performance commitments are successfully fulfilled, the company is likely to achieve a virtuous cycle of "performance growth driving valuation repair, and valuation enhancement feeding back into market capitalization expansion," making the Davis double-click worth looking forward to ### Related Stocks - [601686.CN](https://longbridge.com/en/quote/601686.CN.md) - [SHEL.US](https://longbridge.com/en/quote/SHEL.US.md) - [XOM.US](https://longbridge.com/en/quote/XOM.US.md) - [BP.US](https://longbridge.com/en/quote/BP.US.md) - [SHEL.WI.US](https://longbridge.com/en/quote/SHEL.WI.US.md) - [BP.UK](https://longbridge.com/en/quote/BP.UK.md) ## Related News & Research - [CRAK is Smoking Hot… and Short-Term Overbought. 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