What if the $7.4 billion acquisition falls through? The company still rakes in $1.3 billion in half a year.

On the one hand, SenDa Group—both a shareholder and core procurement-and-sales partner of Tefo International—is among Tefo’s top five customers. Significant raw material purchases and product sales occurred between the two parties in 2024 and 2025, resulting in a high proportion of related-party transactions. Regulators are concerned that such transactions leave room for artificial earnings manipulation. On the other hand, local and medium-sized African building materials manufacturers continue to ramp up production, intensifying market competition. Tefo International’s product prices have long exceeded those of domestic competitors. Keda has neither explained the sustainability of its pricing advantage nor disclosed supporting data—such as distributor payment recovery rates or inventory turnover—making this the biggest weakness identified during regulatory review. Notably, the transaction employed the income approach to value 100% of Tefo International’s equity at RMB 14.53 billion—a 219.51% premium over its book net assets. Compared with the RMB 4.887 billion valuation as of end-2023, this represents nearly a threefold increase in less than two years—prompting strong regulatory skepticism. Regulators specifically highlighted flaws in the valuation methodology, including the short interval between the two valuation reference dates and the extraordinary magnitude of the valuation increase. Yet Keda failed to clearly justify the origins of key valuation parameters—including projected profitability, discount rates, and long-term growth rates—rendering it unable to substantiate the rationale behind the sharp valuation uplift. Moreover, the deal carries a three-year cumulative profit commitment of RMB 4.92 billion. Should African market demand weaken, exchange rates depreciate, or geopolitical conflicts disrupt production, fulfillment of this commitment faces substantial uncertainty—and Keda would confront significant goodwill impairment risk. Additionally, this is a related-party acquisition: Shen Yanchang, the actual controller of the counterparty SenDa Group, also serves as a director of Keda—raising potential concerns about利益输送 (conflict-of-interest transfers). Whether acquiring a minority stake at such a high price harms the interests of minority shareholders is another major regulatory concern. Overall, the regulatory rejection does not reflect skepticism toward the African building materials sector itself, but rather strict enforcement of information disclosure requirements under the registration-based system—particularly heightened scrutiny of high-premium related-party acquisitions and assets exhibiting sudden, short-term earnings surges. This termination thus became the first A-share M&A case rejected after the listing of the 'Six M&A Guidelines.' III. Failed Restructuring Does Not Diminish Strong H1 Performance Even though the RMB 7.4 billion acquisition plan has been terminated, Keda’s operating performance in the first half of 2026 remains outstanding. The company forecasts H1 2026 net profit attributable to shareholders of RMB 12.6–13.6 billion, representing a 69.11%–82.53% year-on-year increase; non-recurring net profit attributable to shareholders is expected to reach RMB 12.78–13.78 billion, up 82.60%–96.89% year-on-year. Overseas building materials—the company’s largest revenue segment—continues its high-growth trajectory from 2025 and remains the core driver of H1 performance. Newly commissioned production capacity continues to ramp up, while overseas building materials prices remain elevated—creating a volume-price synergy that boosts both revenue and net profit. In its traditional business, the ceramic machinery segment maintains steady development. Domestic ceramic industry capacity contraction and weak equipment renewal demand have constrained growth in China. However, Keda has fully pivoted its focus to overseas markets—especially emerging global ceramic production hubs (Southeast Asia, the Middle East, and Africa)—where stable factory-construction demand supports steady growth in overseas ceramic machinery orders, delivering stable returns. Encouragingly, the lithium battery anode business has reached an inflection point. With sustained recovery in downstream energy storage and power battery demand in H1 2026, Keda has increased production and sales of artificial graphite through capacity upgrades and process optimization—successfully exiting the prior loss-making state caused by industry-wide price wars.

Data and the Capital Cycle: How Koch Built an Empire

What was the Development Division’s first major transaction? It acquired a refinery in Corpus Christi. But the way it executed this deal was highly instructive: the Development Division secured its first deal through Bernard Paulson. [Paulson] discovered the opportunity partly because of the computer model he had refined to help operate the Pine Bend refinery. These data enabled Paulson to pinpoint precisely which units to run, which products to manufacture, and which markets to target. The computer model gave Paulson an X-ray-like view into the petroleum market. Now, Paulson turned that same lens outward—toward his competitors. Koch Industries sold large volumes of crude oil to Sun Oil’s refinery in Corpus Christi. But Koch wasn’t merely collecting payment for crude deliveries to Sun Oil. It was also gathering intelligence. Paulson’s team knew how much oil Sun Oil purchased—and what type. They then identified Sun Oil’s customers and learned how much those customers paid for Sun’s products. Paulson began applying his computer model to analyze the market surrounding Sun Oil’s Corpus Christi refinery. He studied the refinery’s internal equipment and processing capacity. He determined what products Sun Oil was manufacturing—and at what volumes. He mapped where Sun Oil sold its products—and at what prices. The Sun Oil refinery in Corpus Christi processed the same ‘light crude’ used by most other refineries. Unlike Koch’s Pine Bend facility, it lacked a coker unit capable of handling heavy, high-sulfur crude—the kind refined at Pine Bend. This made the Corpus Christi refinery fairly ordinary—it performed the same functions as many Gulf Coast refineries. It held no competitive niche comparable to the one Koch enjoyed at Pine Bend. Yet Paulson saw something in Corpus Christi that even the refinery’s owners appeared to overlook: he saw a wasted market opportunity. Sun Oil’s refinery possessed equipment capable of processing crude into paraxylene—a petrochemical product. Paraxylene was one of the products Koch Industries already excelled at producing and selling: obscure, technically demanding to manufacture, and ubiquitously consumed. Paraxylene serves as a raw material for terephthalic acid dimethyl ester and purified terephthalic acid—chemicals subsequently used to produce polyethylene terephthalate (PET) and saturated polyester polymers. Most people have never heard of these chemicals—but they constitute plastic containers and bottles, curtains, interior furnishings, polyester suits and other apparel, electrical insulation materials, and photographic film. Paraxylene is something everyone unknowingly buys—and demand for it is growing. As synthetic apparel diversifies and demand rises for plastic containers used to hold beverages or household chemicals, so too does demand for paraxylene. Paulson realized that acquiring the Corpus Christi refinery would open an entirely new market for Koch: paraxylene and other petrochemicals. And, true to Koch’s philosophy, this market would be new—but not wholly unfamiliar. Koch already understood petrochemicals. It could apply expertise honed at Pine Bend directly to paraxylene production in Texas. Most importantly, in Paulson’s and others’ view, Sun Oil seemed unaware of the opportunity it was missing in Corpus Christi. Sun Oil was indeed producing and selling paraxylene—but at levels far below its potential.

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Koppers Holdings Reports Q2 2026 Earnings, Plans Stickney Facility Closure

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