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

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Source: Global Tiger Finance App

The food processing violations exposed during the 3.15 Gala unexpectedly brought the leading fluorochemical company, Duofuduo, into the spotlight. Its controlling subsidiary, Yifeng Electronics, was involved as an upstream supplier of the 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 faced compliance issues and did not meet performance expectations. 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 linked to Yifeng Electronics, a subsidiary of the A-share fluorochemical giant Duofuduo.

Despite knowing that its hydrogen peroxide was banned for food processing, Yifeng Electronics continued to supply products with false labels and even actively taught downstream companies how to evade regulatory scrutiny.

Public reports show that this subsidiary, acquired by Duofuduo a year ago, not only had compliance issues but also underperformed 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 remained. The stock opened lower on March 16 and fluctuated downward, closing at 30.55 yuan, down 0.97%.

In fact, as a specialized national high-tech enterprise focusing on fluorine, lithium, and silicon elements, Duofuduo is currently in an earnings 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 reached 6.729 billion yuan, a slight decrease of 2.75% year-over-year, but net profit attributable to shareholders turned profitable from a loss of 309 million yuan last year to 78 million yuan. The company’s forecast indicates that full-year net profit will further grow to between 200 million and 280 million yuan.

Duofuduo’s “M&A Strategy”

The incident involving Yifeng Electronics has not only subjected this acquisition to market scrutiny but also cast a spotlight on Duofuduo’s series of capital moves since its listing.

Since going public in 2010, Duofuduo has embarked on a path of capital integration. In 2011, to reduce reliance 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 a grade above 45%.

Starting in 2015, amid the rapid rise of the new energy vehicle industry, Duofuduo accelerated its acquisitions. In May of that year, it announced a cooperation agreement with the 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 complete industry chain from batteries to vehicles.

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

From 2017 onward, as the price of its core product, lithium hexafluorophosphate, plummeted, Duofuduo faced pressure on its main business and began a series of divestments. In April of that year, it sold four subsidiaries, raising about 35 million yuan. These included Shenzhen Duofuduo New Energy Technology, which was divested due to its saturated LED business; Fuduoduo Industrial, involved in catering and hospitality; and Partner Nano, a lithium battery material business that was small and reliant on leasing 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 acquired company suffered continuous losses exceeding 200 million yuan over three years and was embroiled in debt disputes and asset impairments. Facing operational difficulties, Duofuduo sold its stake in Luoyang Lanbao in June 2022 for 10 million yuan.

In March 2020, Duofuduo repurchased its former subsidiary Partner Nano for 89.1 million yuan. By then, Partner Nano had its own production lines and was profitable, having achieved about 16.7 million yuan in cumulative profit from 2017 to November 2019. This significantly strengthened Duofuduo’s profitability amid its 2019 net loss of 398 million yuan.

In September 2020, 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 acquisitions and divestments, Duofuduo shifted its M&A focus from “big and comprehensive” to “specialized and refined.” In 2021, it designated Nanning as the unified development platform for its lithium battery business, establishing Guangxi Ningfu as the project entity, with assets injected in 2023 and 2025.

In April 2024, Duofuduo acquired an 80% stake in Ningxia Tianlin for 300 million yuan, crossing from inorganic fluorides to organic fluorides and opening a new business track. At the same time, the company announced plans to list its subsidiary Zhongning Silicon Industry on the Growth Enterprise Market and to eventually list 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 the company’s electronic chemicals product portfolio.

Key Figure

Li Shijiang

Duofuduo’s decades-long capital strategy is closely tied 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 director to technical director, gaining extensive management experience at the grassroots level. In 1983, he ranked third in Henan Province in the entrance exam for Henan Radio and TV University, and at age 40, he was admitted to the Party School graduate program.

In 1994, due to product homogeneity and outdated processes, the Ice Crystal Stone Factory in Zhongzhan District, Jiaozuo, faced imminent closure. Li Shijiang was entrusted with the task, leading 36 retired workers to take over this challenging enterprise.

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

He led the team to focus on laboratory research, repeatedly tackling technical challenges, and in 1997, successfully developed a process for producing cryolite via sodium fluorosilicate, co-producing high-quality white carbon black. This revolutionary process transformed waste from phosphate fertilizer production into valuable raw materials and opened new fluorine resource pathways. The breakthrough revived the enterprise and earned recognition from the former State Planning Commission as a “National High-Tech Industrialization Demonstration Project,” supported by 8 million yuan in government bonds.

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

In 2006, on expert advice, he shifted focus to the deep value of fluorine elements, targeting lithium hexafluorophosphate. As the core material for lithium batteries, it was long monopolized by Japanese companies, with Chinese firms forced to import at high prices. Li Shijiang led a team to Japan for inspection but was turned away, with the factory dismissively saying, “Chinese companies can’t do this.” This motivated him to conquer this “neck-breaking” technology.

The subsequent efforts were arduous. The team faced financial crises and talent loss but persisted, investing over 200 million yuan. After years of experimentation, they achieved mass production in 2014.

However, just as mass production began, Japanese competitors launched a fierce price war to crush the emerging Chinese industry. 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 the first private enterprise in China’s inorganic fluorine chemical industry to go public. With capital support, the company grew rapidly. Today, one in three lithium batteries worldwide uses Duofuduo’s lithium hexafluorophosphate, with a domestic market share of 35% and a global share of 30%, breaking foreign monopolies.

In December 2025, the octogenarian Li Shijiang officially stepped down as chairman, with his son Li Yunfeng and daughter Li Lingyun serving as chairman and vice chairman of the group. Both successors joined Duofuduo early, working from grassroots positions.

Li Yunfeng, the current chairman, previously served as head of HR, general manager assistant, and deputy general manager. Li Lingyun, vice chairman, was formerly head of foreign trade at Jiaozuo Ice Crystal Stone Factory and foreign trade manager.

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