Last year, I wrote an article titled "Clearly Recognize M&A Fever," hoping that domestic paint companies would recognize this trend and explore a development path that suits their own needs. Unexpectedly, the wave of mergers and acquisitions came faster than expected, especially with China Resources Coatings being acquired by Valspar in the U.S. This has once again drawn attention and sparked new thoughts about the future of coating companies. In the face of global paint giants aggressively investing and mobilizing large amounts of capital, every paint company must reflect on its own future: will it take the path of joint mergers and acquisitions to grow stronger, or wait for buyers to come knocking? The choice is crucial. Mergers and acquisitions are different from being acquired, but in essence, they both lead to the same destination. A typical example in the industry is China Resources and Mei Tushi. One was acquired by another, while the other took the initiative to acquire others. China Resources, at the peak of its business, was sold without much fanfare. Though many industry insiders were surprised, it may have paved the way for a more powerful and rapid growth. Perhaps in the future, China Resources could surpass Nippon. If China Resources and Valspar spent 1 billion yuan on advertising, it might easily outperform Nippon with its current strength. Of course, this is just a hypothesis, a subjective imagination. It's possible that China Resources doesn't prioritize advertising as its main strategy. More likely, China Resources will focus on improving its distribution efforts, aligning with its consistent marketing philosophy, and further strengthening ground-level promotions to steadily expand sales of its decoration paints through major channels. At the same time, it may leverage Valspar’s financial resources and successful experiences in industrial sectors like car paints and powder coatings to rapidly boost overall sales and market presence. Under Valspar's influence, China Resources may also expand quickly through capital operations and strategic acquisitions. Whether it remains a true national brand or not, it is certain that China Resources will perform better than it does now. Mei Tushi is another admirable company. In just ten years, it achieved over 300 million yuan in sales—a remarkable achievement in the paint industry. What stands out most is Mei Tushi’s desire to grow independently rather than rely on external backing. Initially, Aksu offered to buy Mei Tushi, but Mei Tushi only agreed to sell 3A. It refused to accept a one-time deal. Since last year, James Tu took bold steps to acquire other companies, successfully entering enterprises like Yangzhou Jinling, Beijing Sanqi, and Zhejiang Haotai, and participating in Guangzhou Xiupan. Now, it is also involved in Shenzhen Ferris and Foshan Eastman, expanding into environmental protection and coal industries. This growth requires not only financial strength and management capabilities, but also courage and vision. Whether it’s being acquired like China Resources or acquiring others like Mei Tushi, the key is to have unique strengths and excel in management and marketing. Although Mei Tushi isn’t as strong as China Resources, it is still considered one of the top players in recent years. Especially in 2003, the early hiring of senior managers significantly boosted its brand awareness and influence. With solid sales exceeding 300 million yuan and the leadership of James Tu, Mei Tushi has the potential to attract other companies for acquisition. To take the road of self-strengthening through acquisition, a company must first build internal strength and be ready when the opportunity arises. For a company like China Resources, after being acquired by Valspar, Aksu and PPG can only hope to catch up by offering higher prices. Without the ability to acquire others, it's hard to grow larger. Companies need to develop their unique characteristics—whether it's a strong brand, valuable sales volume, distinctive products, successful channels, regional dominance, or a listed company structure. All of these can make a company a prime target during the M&A wave, allowing it to sell at a good price. It should be noted that distribution channels are among the most valuable assets. Brands like Garbo, Midea, Bauhinia, and Zhanchen, Changrunfa, Clivia in furniture lacquer, Xiupe in floor paint, Zhujiang lacquer, Zhenbang’s fluorocarbon paint, Starcoat’s nano-lacquer, Oulong, Ivy, Haihong in hypermarket channels, Chenchen, Camel’s decoration channels, Bardez, Mickey, Intertek, and regional channels like Acer, Three Gorges, Xiangjiang, and Lehua will all become hot spots in the M&A landscape. Another example is Akzo Nobel’s acquisition of Guangzhou Tuidede. After Aksu’s revenue reached around 100 million yuan, Tuidede retained its Boli brand, added the Akzo Nobel prefix, and launched a new product line called “Jie Jie Mei.” Akzo Nobel saw value in Boli due to its strong engineering channel presence and access to over 200 stores in South China. This shows that even when acquired by foreign investors, companies don’t abandon their brands. These established networks and channel bases are valuable, and the brand’s culture can be further expanded using the investor’s influence. With a turnover of around 300 million RMB, coating companies are facing the inevitable trend of mergers and acquisitions. Whether to merge or be merged, and how to implement your own development strategy—now is the time to think deeply and act decisively.

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