[Report] Richen Co., Ltd. invests 266 million yuan in Oriental Jinxin: acquires 10.89% and increases to 13.12% in capital

Author: Wang Congbin

The announcement approved on February 6, 2026, and disclosed publicly on February 7, breaks down a cross-industry equity investment into verifiable terms and milestones: The stock code 603755, Ri Chen Co., plans to acquire a portion of Beijing Dongfang Jinxin Technology Co., Ltd. for a total of 266.1973 million yuan and to increase its capital. The equity transfer specifies the sellers as Ying Shisheng, Dongwu Jinke, and Shi Qiling, while the capital increase’s counterparty is Dongfang Jinxin. The transaction structure separates “acquisition of existing equity” and “capital increase,” and is accompanied by information rights, buyback trigger conditions, and payment milestones, allowing each step of the investment to be verified from the disclosure stage.

As of publicly available information on February 13, 2026, the most frequently cross-checked details remain the funding constraints and reporting treatment methods. The announcement states that as of September 30, 2025, the company’s cash balance was 111.7499 million yuan, and the funds for this transaction will be sourced through self-raised and other means, which may exert short-term pressure on cash flow arrangements. It also clarifies that this is a financial investment; after the transaction, the shareholding ratio will be 13.12%, with no board or senior management appointment, and the target company will not be consolidated into the parent’s financial statements. The accounting of investment returns and exit progress will become key focus points in subsequent disclosures.

The announcement provides a set of repeatable elements regarding the target’s business and asset structure. Dongfang Jinxin’s main business revolves around its “Haihe” product matrix, covering big data platforms, distributed databases, data asset management, and enterprise data applications. The number of related software copyrights and patents is also mentioned. Basic software and data governance products typically require long-term delivery and ongoing maintenance, with buyers concentrated in industries with high reliability, compliance, and service continuity requirements. Investors are often more concerned with product renewal costs, migration expenses, and customer stickiness across cycles.

The announcement states that the transaction amount, equity ratio, and post-increase shareholding ratio are in the same paragraph, allowing core figures to be directly cross-verified. The equity transfer involves acquiring 7,798,381 shares of Dongfang Jinxin for 166.1973 million yuan, representing 10.89% of the target’s total share capital. The capital increase plans to subscribe for 1.835528 million yuan of new registered capital with 10.3 million yuan, and after completion, Ri Chen Co. will hold 13.12%. The pricing explanation indicates that the company intends to acquire 13.12% of Dongfang Jinxin for 266.1973 million yuan, corresponding to a comprehensive valuation of 2,028.72 million yuan, with the payment arranged in two installments based on the agreement’s effectiveness and document delivery.

Overseas Expansion Reasons

Ri Chen Co.’s core business stems from customized delivery of complex seasonings, focusing on R&D, manufacturing, and sales organization of products and supply chains. The product types summarized in the announcement and annual report include sauces, powdered seasonings, and a small amount of food additives, with over a thousand varieties. Downstream clients include chain restaurants, food processing, and branded retail, requiring both formulation development and consistent batch delivery.

The annual report mentions that early clients mainly consisted of Japanese export-oriented chicken processing companies, to whom Ri Chen provided sauces, powders, and other complex seasonings and solutions. Since 2012, the business focus has gradually shifted to the domestic catering market, providing customized complex seasonings for chain restaurants. The shift from foreign trade processing to domestic chain catering has elevated the importance of product R&D, delivery responsiveness, and quality management, prompting the company to treat flexible manufacturing and rapid delivery as long-term capabilities.

Around 2016, the company underwent significant changes in ownership structure and corporate form, gradually establishing governance and disclosure frameworks suitable for capital markets. After listing on the main board in August 2019, financing, investment, and M&A activities increasingly rely on public rules, making fund use and investment returns easier to evaluate under consistent disclosure standards. For complex seasonings businesses that rely on R&D and delivery organization, fixed asset investment, production line efficiency, and customer stability jointly determine cash flow resilience. Investment decisions thus require explainable constraints.

The 2024 annual report summary provides directly comparable operational data: revenue of 404.735 billion yuan, net profit attributable to shareholders of 63.858 million yuan, and net cash flow from operating activities of 86.531 million yuan. The scale of operations and cash flow structure influence sensitivity to external investment, explaining why the announcement highlights “funding pressure, post-investment supervision limitations, and delivery conditions” as risk factors. Once external equity investment becomes a public topic, valuation basis, exit paths, and post-investment information rights are scrutinized earlier than narrative synergies.

The pricing explanation lists that Dongfang Jinxin completed three financing rounds in the past five years, with details on each round’s amount, shareholding, and post-money valuation. It further states that the current transaction’s valuation is primarily based on the target’s historical financing valuation, combined with actual operational conditions, potential value, and market prospects. For financial investments, such disclosures provide a more concrete reference; whether subsequent exits can sustain or increase valuation depends heavily on ongoing validation of operational data, customer structure, and technological barriers.

Dongfang Jinxin’s business positioning in the announcement is as a big data infrastructure software developer, providing foundational software and services around data integration, storage, governance, modeling, analysis, mining, and circulation, forming the “Haihe” product matrix. Commercialization of basic software depends more on long-term delivery, maintenance, and renewal, with customer migration costs and product iteration pace influencing valuation at exit. The announcement clarifies that the investment does not result in controlling interest or consolidation, and information rights and buyback trigger conditions are included in the agreement, placing the investment logic within a clearer financial constraint and exit framework.

Overseas Market Layout

The announcement separates the acquisition and capital increase into two funding actions, with valuation and shareholding ratios disclosed within the same pricing explanation. The 7,798,381 shares acquired correspond to a 10.89% stake; after the capital increase, the stake rises to 13.12%. The total consideration is 266.1973 million yuan, with a comprehensive valuation of 2,028.72 million yuan. Once the shareholding ratio, price, and timing are disclosed together, any subsequent changes will be reflected in supplementary announcements, updated agreements, or transaction disclosures, and the investment’s nature will be redefined accordingly.

Post-investment information rights are written as enforceable clauses, granting the acquirer rights to know and review financial statements, quarterly reports, budgets, and specific project explanations. These clauses aim to turn information asymmetry into contractual obligations, with ongoing disclosures replacing the illusion of one-time due diligence. Including these rights in the agreement makes the evidence chain for buyback triggers, dispute resolution, and post-investment supervision clearer.

The buyback clause sets the exit date as December 31, 2027, and defines “qualified listing” as listing and trading on the Shanghai Stock Exchange, Shenzhen Stock Exchange, Hong Kong Stock Exchange, or other exchanges approved by investors. It also covers companies listed on the aforementioned exchanges through cash or stock acquisitions, meaning the exit arrangement is not limited to a single market. Including Hong Kong as a qualified listing venue means that compliance disclosures, valuation, and acquisition maturity will become key variables affecting exit efficiency.

The announcement indicates that the transaction does not involve cross-border trading, with Hong Kong’s role mainly in terms of capital market rules rather than operational implementation. The Hong Kong Stock Exchange’s listing rules and ongoing disclosure requirements are relatively mature, and foreign investors, international banks, and M&A participants are more accustomed to financing and valuation in Hong Kong. Including Hong Kong’s market in the qualified listing scope effectively incorporates its liquidity and trading mechanisms into the investment protection structure.

On March 31, 2023, HKEX added Chapter 18C to the Main Board, providing a new listing pathway for specialized technology companies. Dongfang Jinxin’s focus on big data infrastructure, distributed databases, and data asset management classifies it as a typical tech supply-side company, with market valuation often emphasizing technological route, customer renewal, and ecosystem compatibility. Making Hong Kong an optional listing venue means the exit path can leverage Hong Kong’s more comprehensive listing systems and intermediary services for tech firms.

HKEX’s explanation of Stock Connect states that the Shanghai-Hong Kong Connect launched in November 2014, and the Shenzhen-Hong Kong Connect in December 2016, connecting the trading and settlement systems of the two markets to allow designated securities to be traded across borders. When Hong Kong is included as a qualified listing venue, secondary market liquidity and investor structure will become more practical constraints on exit, requiring investors to consider valuation styles and capital participation enabled by connectivity. Including the exit channel in the terms transforms the market mechanism from a background factor into a variable influencing exit efficiency.

The announcement notes that the settlement depends on the signing and effectiveness of relevant agreements, internal approvals, truthful and complete representations and warranties, absence of legal or contractual restrictions, and no material adverse changes in the target company. Since the settlement conditions are not yet fully confirmed or waived, updates will focus on whether conditions are met, when they are met, and any changes. Adjustments to valuation basis, funding sources, self-raised arrangements, or post-investment supervision will influence market understanding of the investment’s nature.

Core Advantages

Ri Chen Co.’s main advantage lies in its combination of customized R&D and flexible manufacturing. The annual report summarizes its core strengths as customized R&D, flexible manufacturing, quality management, and rapid response. Chain restaurant clients require frequent menu updates, and suppliers must organize formulation development, raw material substitution, process scaling, and delivery into repeatable processes. These capabilities are reflected in internal management. When external investments enter the post-investment phase, the ability to systematically track information disclosure, budget execution, and major issues is a rare management competency that can be effectively implemented across industries.

The announcement states that as of September 30, 2025, the company’s cash balance was 111.7499 million yuan, with funds for this transaction sourced through self-raised and other means. Public disclosure of cash holdings allows the market to estimate the impact of external investment on cash flow, prompting the board to clarify payment timing, financing arrangements, and operational funds. Greater transparency in cash management facilitates external supervision and aligns fund use with core business operations.

By breaking down information rights, buyback triggers, and payment milestones into verifiable clauses, governance constraints for external investment are more easily implemented. Rights include access to annual audit reports, quarterly statements, and budgets. Buyback triggers specify the scope of qualified exchanges and timing, while payment milestones are split into two stages. Clearer clauses make disputes easier to resolve by focusing on whether contractual conditions are met, avoiding reliance on oral promises. In cross-industry investments, vague language often replaces institutional arrangements; the ability to articulate these as numerical and contractual terms directly reflects governance strength.

Ri Chen Co.’s accumulated quality systems and delivery organization in its core business are also valuable transferable management assets. Supplying complex seasonings to B-end clients requires long-term investment in food safety, batch consistency, and supply stability, with process-based quality control and delivery systems relying on institutionalized methods rather than personal experience. Although external equity investments involve different businesses, the emphasis on traceability in information flow, approval chains, and risk control remains consistent. When external investments are frequent, embedding investment decisions and post-investment management into processes and maintaining ongoing disclosures are often more important than one-time transaction size.

The target company’s technological and asset attributes also provide tangible reference points for investment logic. The announcement states that Dongfang Jinxin owns 266 software copyrights and 20 patents. The value of basic software products depends heavily on long-term delivery and customer migration costs. Its website emphasizes big data infrastructure software and enterprise data applications, where iteration speed and ecosystem compatibility determine customer renewal and expansion potential. Sustainable returns ultimately depend on continuous validation of technological routes, delivery capabilities, and customer structures.

Potential Returns

Once qualified listing nodes, listing venues, and buyback triggers are codified in contracts, the first path to realization of returns is linked to the target’s capital operations progress. Progress in listing, mergers, acquisitions, or other exit arrangements will significantly influence valuation. The scope of qualified listings includes HKEX and other exchanges, broadening potential exit scenarios. If the target can raise funds or be acquired at higher valuations in more suitable markets, investment gains may be reflected through asset revaluation.

Post-investment governance that effectively utilizes information rights will determine the speed of risk exposure and correction costs. The rights enable investors to continuously monitor R&D investment, customer contracts, renewal status, and budget execution, allowing risk identification on a quarterly basis rather than waiting for annual audits. For software and data governance companies, revenue recognition, project delivery, and payment cycles are industry-specific; structured data collection can significantly reduce misjudgments. Institutionalized post-investment governance makes buyback clauses more feasible when needed.

Business synergy for returns requires practical application scenarios and ongoing organizational investment. Digital tools increasingly support supply chain coordination, channel management, and customer demand forecasting in the seasoning industry. If data governance and enterprise data application capabilities are validated, there is potential for cooperation in procurement, warehousing, quality traceability, and marketing analysis. Whether such synergy materializes depends on subsequent disclosures or operational facts, with the more reasonable initial approach being to verify whether post-investment disclosures and exit terms are progressing as planned, and whether replicable business linkages emerge.

Risk Mechanisms and Lessons

The announcement states that as of September 30, 2025, cash balance was 111.7499 million yuan, while the total of equity transfer and capital increase amounts to 266.1973 million yuan, indicating that payment timing could transfer pressure to core business liquidity. How the funding gap is covered will require subsequent disclosures and arrangements; reliance on short-term loans or other financing tools could increase interest costs and debt repayment pressures on core operations. Splitting payments into two stages does not automatically reduce funding pressure; buffer depends on the certainty of financing and the stability of core cash inflows.

The enforceability of buyback clauses determines how valuation and exit risks translate into final returns. A comprehensive valuation of 2.02872 billion yuan requires the target to continuously deliver on its technological and commercialization promises to support higher valuation exits. The buyback deadline of December 31, 2027, leaves a limited window; if market conditions change or the target’s operations lag, the ability to fulfill buyback obligations with sufficient cash becomes a new risk. Contract clauses do not guarantee timely fulfillment; assessing buyback capacity is often more critical than the clauses themselves.

Cross-industry investments are most prone to revealing information asymmetries during post-investment management. Software companies’ R&D and commercialization cycles are difficult to measure with traditional manufacturing metrics; revenue recognition, project delivery, and customer renewal require detailed operational data. Including rights in the agreement reduces asymmetry, but organizational capacity for understanding the business determines whether information can be converted into actionable risk controls. Regulatory inquiries requesting more operational data will also serve as external validation of post-investment management effectiveness.

Disclosure updates and expectation management directly influence market volatility, especially in cross-industry investments where misunderstandings are common. Supplementary announcements, agreement updates, and subsequent disclosures must be consistent to avoid conflicting statements. Disputes often stem from expectation gaps; breaking down uncertainties into traceable milestones makes volatility more manageable within an understandable range.

Conclusion

The announcement clearly delineates the key verification points: the acquisition and capital increase amounts, shareholding ratios, comprehensive valuation, payment milestones, information rights, and buyback conditions. The next focus should be whether the settlement prerequisites are met or waived, and whether payment milestones are progressing as per the agreement. Once funding sources and liquidity arrangements are disclosed as clearer financing paths or internal fund schedules, the impact on core business liquidity becomes easier to quantify.

The definition of qualified listing includes HKEX, with the December 31, 2027, deadline and buyback terms establishing a traceable timeline for exit progress. If the target’s operational data, product iterations, and customer expansion can be continuously disclosed with verifiable information, the visibility of investment returns will improve accordingly. Conversely, if public information remains at the clause description level without operational fulfillment, the ability to fulfill buyback obligations and the reasonableness of valuation will become the primary points requiring explanation.