Analysis of Goodwill Impairment Risk from Lingyi Smart (300600.SZ)'s Acquisition of Liminda

Based on the above systematic analysis, I now present to you the

.

---

On December 23, 2025, Lingyi Smart announced a plan to acquire a 35% stake in Dongguan Liminda Electronic Technology Co., Ltd. for

, and obtain voting rights for an additional 17.78% stake via voting rights proxy, giving it control of 52.78% of Liminda’s voting rights in total[1].

Indicator	Value
Liminda’s Book Net Assets	RMB 71.27 million
Valuation of Liminda’s 100% Equity	RMB 2.51 billion
Acquisition Premium Rate	3,400% (34x)
Expected New Goodwill	Approximately RMB 800 million
Lingyi Smart’s Existing Goodwill	Approximately RMB 1.2 billion
Total Goodwill Post-Acquisition	Approximately RMB 2 billion

Liminda is a company focusing on key components for server liquid cooling systems, with main products including quick-release connectors, liquid cooling manifolds, single-phase liquid cooling heat dissipation modules, and liquid cooling plates, among others.

Period	Operating Revenue	Net Profit	Operating Cash Flow
2024 Full Year	RMB 271 million	-RMB 24.62 million (Loss)	-
2025 Q1-Q3	RMB 486 million	+RMB 21.2 million (Returned to Profit)	-RMB 55.19 million

1. Just returned to profitability
   : Liminda was still in a loss in 2024, and only achieved profitability in the first three quarters of 2025, casting doubt on the sustainability of its profits[1]
2. Cash Flow Pressure
   : Net operating cash flow was -RMB 55.19 million, indicating the company is still heavily investing in expansion with advance payments, and profits have not yet been realized in cash[1]
3. Rapid Revenue Growth
   : Revenue in the first three quarters reached RMB 486 million, with full-year revenue expected to exceed RMB 600 million, representing a year-on-year growth of over 120%

Based on the acquisition premium rate, the target company’s financial status, and industry environment, we constructed a

to quantify goodwill impairment risk:

Scenario	Probability	Impairment Rate	Impairment Amount	Premise
Optimistic Scenario	20%	5%	RMB 40 million	Liminda maintains sustained profitability and high growth, with explosive demand for AI liquid cooling
Neutral Scenario	50%	15%	RMB 120 million	Liminda maintains profitability but with slowing growth, and market competition intensifies
Pessimistic Scenario	30%	35%	RMB 280 million	Liminda’s profits decline or return to loss, failing to meet goodwill impairment testing requirements

• Expected Impairment Amount:
  RMB 152 million
• Expected Impairment Rate:
  Approximately 19%
• Impact on Net Profit: In the neutral scenario, it erodes approximately 6.2% of net profit (based on H1-H3 2025 net profit of RMB 1.94 billion)

• Based on the RMB 2.51 billion valuation, the consideration paid by Lingyi Smart is equivalent to
  34x
  Liminda’s book net assets
• Even considering Liminda’s customer resources (reportedly part of NVIDIA’s supply chain), this premium rate is rare in the A-share M&A market[1]

• Liminda just returned to profitability in 2024, with net profit of only RMB 21.2 million in the first three quarters of 2025
• Profitability after the performance commitment period is the key to goodwill impairment testing

• Operating cash flow of -RMB 55.19 million indicates the company relies on external financing to fund business expansion
• If financing is hindered or customer payments are delayed, it may impact normal operations

• Liquid cooling technology is split into two routes: cold plate and immersion
• If a disruptive shift in technical routes occurs, Liminda’s product lines may face obsolescence risk[4]

• Cash on hand is RMB 4.58 billion, but short-term and long-term borrowings amount to
  RMB 12.38 billion
• Capital gap is approximately RMB 7.8 billion, with interest-bearing debt ratio of 25.6%[1]
• The RMB 875 million cash payment for the acquisition will further intensify capital pressure

• The liquid cooling track already has multiple leading players: Envicool (liquid cooling business accounts for over 20%), Sichuan Runfeng Co., Ltd. (zero leakage record), Goaland Co., Ltd. (multiple liquid cooling solutions), etc.[4]
• Peers such as Lens Technology and Eastsun Group are also rapidly entering the market via mergers and acquisitions

• Reportedly, Liminda’s main customers are NVIDIA and its supply chain enterprises
• Over-reliance on a single customer due to high revenue concentration poses customer dependency risk

Despite the high risks, this acquisition also benefits from a favorable industry environment:

• Huajin Securities predicts: By 2029, the Chinese liquid cooling server market will reach
  USD 16.2 billion
  , with a CAGR of
  46.8%
  from 2024 to 2029[4]
• UBS predicts: The global data center direct liquid cooling market will grow from USD 1.138 billion in 2024 to
  USD 31.191 billion
  (approximately RMB 220.5 billion) in 2030, with a CAGR of 51%[5]
• Soochow Securities estimates: Demand for liquid cooling systems for NVIDIA platforms alone will reach
  RMB 69.7 billion
  in 2026[5]

• National policies continue to drive large-scale application of liquid cooling technology
• AI chip power consumption has entered the ‘kilowatt era’, making liquid cooling a ‘must-have’ instead of an ‘option’[5]
• Stricter assessments of PUE (Power Usage Effectiveness) are driving data centers to accelerate the shift to liquid cooling

• The company has accumulated expertise in thermal management, with a product portfolio covering full-series heat dissipation products including liquid cooling and air cooling, and supplies bulk orders to international customers such as AMD[1]
• This acquisition allows it to quickly obtain technical reserves and customer certification qualifications for server liquid cooling heat dissipation business from specific domestic and overseas customers

• In the first three quarters of 2025, Lingyi Smart recorded operating revenue of RMB 37.59 billion (+19.3%) and net profit of RMB 1.94 billion (+37.7%)
• Revenue from automotive and low-altitude economy businesses reached RMB 1.183 billion (+38.41%), while revenue from clean energy businesses grew 247.58% year-on-year[1]

Dimension	Assessment	Weight
Valuation Rationality	Extremely High Risk (34x Premium)	30%
Profit Sustainability	High Risk (Just Returned to Profit)	25%
Cash Flow Status	High Risk (Sustained Negative)	20%
Industry Outlook	Low Risk (High Growth)	15%
Corporate Capital	Medium Risk (High Debt)	10%

• Liminda’s Quarterly Net Profit: Must maintain profitability for 3 consecutive quarters, with quarterly net profit ≥ RMB 20 million
• Operating Cash Flow: Must turn positive and show continuous improvement
• Revenue Growth Rate: Must maintain year-on-year growth of over 50%
• Gross Profit Margin: Must remain above 30%

1. Short-Term (Within 6 Months)
   : Monitor Liminda’s full-year 2025 performance; if it achieves full-year profitability and improved cash flow, it can temporarily ease market concerns about goodwill impairment
2. Medium-Term (6-12 Months)
   : Focus on tracking changes in Liminda’s share of NVIDIA’s supply chain, and the evolution of technical routes in the AI liquid cooling industry
3. Long-Term
   : If Liminda can maintain high growth and successfully onboard more leading customers, goodwill impairment risk will gradually diminish; conversely, if performance falls short of expectations,
   the maximum impairment risk exposure is approximately RMB 280 million
   , accounting for about 10-15% of Lingyi Smart’s annual net profit

---

[1] Sina Finance - “34x Premium to Acquire a Just-Profitable Liquid Cooling Company: Is Lingyi Smart’s AI Gamble Worth It?” (https://finance.sina.com.cn/stock/s/2026-01-13/doc-inhhecrv4912105.shtml)

[2] Worker.cn - “M&A and Expansion + Technological Breakthrough: The RMB 100 Billion Liquid Cooling Track Faces Fierce Competition” (https://www.workercn.cn/c/2026-01-12/8706369.shtml)

[3] Securities Times - “M&A and Expansion + Technological Breakthrough: The RMB 100 Billion Liquid Cooling Track Faces Fierce Competition” (https://www.stcn.com/article/detail/3585422.html)

[4] Wall Street CN - “AI Enters the ‘Liquid Cooling Era’; the Market Underestimates the ‘Magnitude of the Shift’” (https://wallstreetcn.com/articles/3760892)

[5] Huxiu - “2026 Computing Power Server Market: Scale or Profit?” (https://m.huxiu.com/article/4826052.html)

[6] Jinling API - Lingyi Smart (300600.SZ) Company Profile and Financial Data