Longcheer pays RMB1.12B for Anruike stake in data center push

Longcheer Technology's RMB1.12 billion cash acquisition of an 80 percent stake in Suzhou Anruike marks its boldest move into the data center infrastructure market.

Longcheer Technology agreed to pay RMB1.12 billion in cash for an 80 percent stake in Suzhou Anruike, a data center infrastructure supplier, marking its entry into a sector where AI computing demand is driving capacity expansion across China.

The acquisition will be funded entirely from internal resources, the company said in a filing to the Hong Kong Stock Exchange. Suzhou Anruike supplies data center infrastructure products and solutions, giving Longcheer a direct channel into the buildout cycle that has pushed data center capex to record levels across the region.

Shares of Longcheer jumped 11.5 percent following the announcement, reflecting investor approval of the deal. The company has been actively returning capital to shareholders, repurchasing approximately RMB90 million of A-shares in July and accumulating 5.15 million treasury shares. Its subsidiary also committed $15 million to an overseas private equity fund earlier this year.

The deal positions Longcheer to capture a share of China's data center infrastructure spending, which is accelerating as domestic cloud providers and AI startups expand capacity. The company has scheduled a board meeting for Aug. 27 to approve first-half results, where investors will look for guidance on integration plans and whether further M&A is in the pipeline.

A Diversification Play Beyond Smartphones

Longcheer, known primarily as a smartphone and IoT device design house, has been broadening its revenue base through a series of capital allocation moves. The Anruike acquisition follows the $15 million overseas private equity commitment and a steady cadence of share buybacks that have trimmed the free float by roughly 0.3 percent since June. Treasury stock now stands at 5.15 million A-shares after repurchases totaling approximately RMB90 million in July alone.

The company's dual listing on the Hong Kong Stock Exchange and the Shanghai Stock Exchange gives it access to both domestic and international capital markets. Its recent buyback activity — which included repurchases of 2.38 million A-shares in July and additional tranches in early August — suggests management sees the shares as undervalued even as it deploys capital for expansion. The buyback pace accelerated through the summer, with individual tranches ranging from RMB8.72 million to RMB20 million across late July and early August, while the company reported no share capital changes for June with 1.23 million treasury A-shares held at that point.

Data Center Demand Creates the Opening

China's data center infrastructure market is expanding as hyperscale cloud providers and AI model developers race to add compute capacity. Suzhou Anruike's product portfolio — spanning power distribution, cooling systems, and server racks — aligns with the buildout cycle that has pushed data center capex to record levels across the region. The deal's closing timeline and regulatory approvals have not yet been disclosed, and Longcheer has not said whether it plans further acquisitions in the space.

The acquisition carries integration risks typical of large M&A transactions, and the company's ability to absorb Anruike's operations while maintaining its core smartphone design business will be tested in the coming quarters. Investors will watch the Aug. 27 board meeting for details on how the company plans to fund and integrate the acquisition, and whether the RMB1.12 billion price tag — funded entirely from internal resources — signals further deal-making appetite. The company's cash position, evidenced by its ability to fund the acquisition without external financing, provides a buffer for potential follow-on investments in the data center supply chain.

This article is for informational purposes only and does not constitute investment advice.