GoerTek Inc. Announces Termination of Planned 95‑Billion‑RMB Acquisition
GoerTek Inc. (002241.SZ), a Shenzhen‑listed provider of wireless communication and electro‑acoustic devices, issued a shareholder‑notice on 17 October 2025 announcing the termination of a previously announced equity‑acquisition plan. The company had intended to acquire 100 % of the equity of Mega Precision Technology Limited (米亚精密科技有限公司) and Channel Well Industrial Limited (昌宏实业有限公司), both wholly owned subsidiaries of Luen Fung Commercial Holdings Limited (联丰商业集团有限公司). The transaction would have been financed with approximately 95 billion yuan (≈104 billion Hong Kong dollars) from GoerTek’s own or sourced capital.
Background of the Proposed Acquisition
- The acquisition was first disclosed on 23 July 2025 with the stated objective of strengthening GoerTek’s competitiveness in the precision‑structure‑parts sector, an area considered strategic for the company’s expansion into high‑end consumer electronics and AI‑hardware supply chains.
- The transaction was expected to enhance GoerTek’s core capabilities in optical waveguiding and micro‑nanophotonic devices, thereby reinforcing its position in the global market for acoustic‑electronic components.
- Prior to the termination, GoerTek’s share price briefly surged more than 70 % in anticipation of the deal, reflecting investor optimism about the potential synergies and market reach the acquisition would provide.
Reason for Termination
GoerTek stated that, following a series of due‑diligence, audit, and valuation activities, the parties were unable to reach agreement on key contractual terms. Consequently, both sides mutually agreed to terminate the acquisition plan. The company clarified that:
- No compensation or legal liability would arise from the termination.
- The decision would not adversely affect GoerTek’s ongoing business operations, financial position, or future strategy.
Market and Financial Context
- Stock price (as of 16 October 2025): 31.2 CNY
- 52‑week high: 40.68 CNY
- 52‑week low: 17.11 CNY
- Market capitalization: 130.93 billion CNY
- Price‑earnings ratio: 45.81
The announcement coincided with broader market commentary on a 28.82 % year‑on‑year decline in net profit for Piao Zai Huang, a domestic pharmaceutical leader. While GoerTek’s own earnings trajectory was not directly referenced in the termination notice, the company’s financial metrics remain indicative of a high valuation relative to earnings.
Implications for Investors
The termination removes an anticipated source of growth that could have expanded GoerTek’s product portfolio and geographic reach. However, the company’s management has emphasized continuity in its core operations and a focus on organic development within the wireless communication and electro‑acoustic device segments. Investors will likely monitor:
- Post‑termination capital allocation: How GoerTek intends to deploy the funds that would have been used for the acquisition.
- Strategic partnerships: Any new collaborations that may replace the strategic benefits originally expected from the deal.
- Financial performance: Quarterly earnings for indications of how the termination impacts revenue and profitability.
Overall, GoerTek remains a high‑valuation player in the electronic equipment and instruments industry, with a market cap exceeding 130 billion CNY and a price‑earnings ratio above 45, reflecting investor expectations of continued growth in the wireless communication and electro‑acoustic sectors.
