A powerful alliance to strengthen the high-end composite pipe portfolio—Youfa Group signs a strategic acquisition agreement with Cangzhou Longtai Di.

On June 1, Tianjin Youfa Steel Pipe Group Co., Ltd. (stock code: 601686) and Cangzhou Longtai Di Pipeline Technology Co., Ltd. (hereinafter referred to as “Longtai Di”) formally signed a strategic cooperation agreement, under which Youfa will acquire a 53% stake in Longtai Di. Upon completion of the transaction, Longtai Di will become a wholly owned subsidiary of the Youfa Group. This strategic acquisition marks a key step in Youfa Group’s strategy to focus on its core steel pipe business, expand its portfolio of high-value-added tubular products, target offshore engineering and energy pipeline markets, and accelerate its global footprint and overseas oil-and-gas pipeline operations. As a leading publicly listed company in China’s welded steel pipe sector, Youfa is partnering with a nationally recognized “Little Giant” enterprise specializing in niche, specialized, and innovative technologies, achieving comprehensive synergy across technology, resources, and distribution channels, thereby driving high-quality, collaborative development for both parties.

As a leading publicly listed company in China’s welded steel pipe sector and a benchmark player in the bimetallic composite pipe segment, this strategic partnership will fill Youfa’s gap in the high‑end, corrosion‑resistant composite steel pipe market. Leveraging Longtai Di’s mature technologies and its extensive domestic and international market resources, the collaboration will enable rapid entry into premium pipe markets such as oil and gas, petrochemicals, power generation, and pipeline networks, unlocking significant growth potential for higher‑margin products. Looking ahead, the two parties will further leverage their respective strengths to jointly expand into overseas markets, making a substantial contribution to meeting global demand for high‑end energy pipelines. Under the strategic M&A agreement, Longtai Di is committed to generating cumulative net profits of no less than RMB 450 million over the next three years, delivering tangible earnings growth to Youfa Group and playing a key role in supporting the listed company’s high‑quality, sustainable development.

Longtai Di has been deeply engaged in the R&D, manufacturing, and sales of bimetallic composite steel pipes, fittings, and flanges for over a decade. It is a Tier‑1 supplier to China’s National Pipeline Group and the three major oil companies—Sinopec, PetroChina, and CNOOC—and also serves leading power‑generation groups such as China Energy Investment Corporation, CNNC, China National Coal Group, Sinochem, China Huaneng, and China Huadian, as well as international clients including Shell, Mobil, BP, Eni, PTT, NNPC, and Sonatrach. Furthermore, the company has gained access to the networks of energy giants like ADNOC (Abu Dhabi National Oil Company), KOC (Kuwait Oil Company), Petrobras (Brazilian National Oil Company), QE (QatarEnergy), BOC Iraq (Basra Oil Company), ENI Iraq (Eni Group’s Iraqi subsidiary), and NCOC (North Caspian Operating Company). Its products are sold across 53 countries and regions worldwide, serving a broad base of key domestic and international customers. Recognized as a national-level “Little Giant” enterprise specializing in niche, sophisticated, and innovative fields, and a Single‑Item Champion in Hebei Province’s manufacturing sector, Longtai Di was successfully listed on the National Green Factory Directory in 2025. The company holds full qualifications for the manufacture of special equipment and for import‑export operations, making it a rare, high‑quality player in its specialized market segment. Mr. Wang Chunjian, the company’s principal executive, brings nearly 30 years of experience in the pipeline industry. Longtai Di is among the few domestic enterprises that have mastered both mechanical cladding and surfacing‑welding composite technologies, while maintaining industry‑leading production capacity. At the same time, the company is actively developing cutting‑edge laser‑cladding processes for novel composite steel pipes, demonstrating exceptional capabilities in technological innovation.

Leveraging its in-house R&D team, Longtai Dike independently develops products and designs and iteratively refines specialized manufacturing equipment, continuously optimizing production processes and product performance. Its bimetallic composite pipes have achieved stable mass production for many years. Compared with traditional all‑metal pipes and fittings, Longtai Dike’s products offer both superior performance and cost advantages, enabling the domestic substitution of imported pipe materials and maintaining industry‑leading gross margins. Backed by a comprehensive portfolio of authoritative domestic and international certifications, the company has secured a place among the core supplier lists of leading enterprises in China’s petroleum, petrochemical, energy, power, and pipeline sectors. Its products are exported to numerous countries worldwide, with the share of overseas revenue steadily increasing, while its international oil and gas pipeline business continues to grow at a rapid pace, underscoring substantial growth potential in this market segment.

As a main-board listed company on the Shanghai Stock Exchange, Youfa Group is the leading R&D and manufacturing enterprise for welded steel pipes, consistently ranking first in domestic production and sales volume for twenty consecutive years, and recognized as a national-level demonstration enterprise for single‑product manufacturing excellence. Since 2006, it has been included in the China Top 500 Enterprises list for twenty straight years. With deep expertise cultivated over many years in the welded steel pipe industry chain, the company has built substantial strengths across brand reputation, production and sales scale, product diversity, financial strength, nationwide production‑base deployment, and marketing channel resources. Upholding its core business of steel pipe manufacturing, the company remains committed to a high‑quality development strategy, pursuing a dual‑track approach that combines organic improvements in quality and efficiency with strategic external acquisitions to expand capacity.

Following the completion of this strategic acquisition, Youfa will provide comprehensive support to Longtai Di across six key dimensions: supply chain management, brand empowerment, standardized governance, incentive mechanisms, market‑channel expansion, and financial credit. Leveraging the listed company’s centralized procurement capabilities and financial strength, Youfa will reduce raw‑material purchasing and operational costs. Meanwhile, JCOE oil‑and‑gas steel pipes produced by its controlling subsidiary, Hebei Haiqianwei, will serve as a composite‑steel pipe substrate, enhancing Longtai Di’s competitive edge within the industry value chain. By capitalizing on Youfa’s established brand reputation, the partnership will accelerate Longtai Di’s deep penetration into major domestic accounts and its global market expansion. Through modern corporate governance and long‑term incentive structures, Youfa will expedite the full utilization of Longtai Di’s existing production capacity; bolster R&D efforts to accelerate the development and industrialization of new laser cladding technologies; and explore overseas production‑capacity deployment strategies to continuously scale up Longtai Di’s global composite‑steel pipe manufacturing footprint.

From a group‑wide strategic perspective, this acquisition will enable Youfa Group to expand its portfolio with high‑value‑added steel pipe product lines, including bimetallic composite pipes, corrosion‑resistant specialty steel pipes, and high‑strength oil‑and‑gas service pipes. Together with the Hebei Haiqianwei JCOE oil‑and‑gas steel pipes acquired in 2025, this move will complete the company’s full‑range steel pipe product lineup, accelerate the development of three core business pillars—specialized oil‑and‑gas tubing, international trade exports, and overseas production capacity—and increase the share of high‑margin products in the listed company’s revenue. It will also continue to optimize the product profitability mix, steadily strengthen R&D and innovation capabilities, broaden brand reach, and enhance overall profitability. This aligns closely with Youfa Group’s medium‑ to long‑term strategy of “focusing on the steel pipe core business, developing high‑value‑added steel pipe categories, and advancing a global growth strategy,” thereby effectively safeguarding the long‑term interests of all shareholders of the listed company.

Following its integration into the Youfa Group, Longtai Di will leverage the Group’s platform to accelerate the mass production and commercialization of cutting-edge technologies, further solidifying its leading position in China’s bimetallic composite pipe market. The company will also seize the opportunities presented by the global expansion of oil, gas, and infrastructure projects, continuously amplify its overseas business advantages, and steadily increase its global market share. Industry forecasts indicate that the accelerated development of domestic and international oil, gas, new‑energy, and long‑distance pipeline networks will drive sustained growth in demand for high‑end corrosion‑resistant piping. Through its strategic acquisition of Longtai Di, Youfa has precisely positioned itself in a critical segment of the industry. This strategic M&A model—combining the strengths of an industry leader with specialized, refined, and innovative enterprises—not only upgrades the listed company’s product portfolio and boosts its financial performance but also enables these specialized firms to harness capital‑market resources to rapidly scale up production capacity. It stands as a quintessential example of industrial chain integration in the steel pipe sector, advancing domestic substitution for high‑end piping, and ushering in a new phase of global expansion.