Youlife Group Inc. (NASDAQ: YOUL) entered into a non‑binding letter of intent on December 12, 2025 to acquire four regional human‑resources service firms that specialize in job placement, flexible staffing and regional workforce management. The proposed transaction is a pure‑equity deal that would be executed through an offshore holding structure, allowing Youlife to issue new shares rather than pay cash and thereby preserve liquidity while aligning the interests of the target owners with Youlife’s long‑term growth objectives.
The acquisition is intended to expand Youlife’s geographic footprint across multiple provinces, deepen its network density, and unlock operational synergies within its full‑cycle blue‑collar service ecosystem that spans vocational education, recruitment and employee management. By integrating the regional firms’ client bases—particularly in logistics and livestock farming—Youlife aims to create a more robust platform that can serve a broader range of blue‑collar workers and employers, reinforcing its position as a nationwide provider of workforce solutions.
Youlife’s recent financial performance provides context for the deal. In the first half of 2025, the company reported revenue of RMB913.3 million (US$127.5 million), up 16.2% year‑over‑year, and operating income of RMB45.8 million, a 93.3% increase. Net profit rose 37 times year‑over‑year to RMB37.7 million, while gross margin improved modestly to 14.1% from 14.0% in the same period last year. The growth was driven largely by a 24.1% increase in employee‑management services, offset by declines of 47.6% in vocational‑education revenue and 25.5% in recruitment services, highlighting a shift toward higher‑margin core operations.
CEO Yunlei Wang emphasized that the LOI represents a “meaningful step in our commitment to integrating regional strengths into a unified, high‑quality, nationwide blue‑collar service platform.” Acting CFO Liqun Yao added that the equity‑based structure “reflects our disciplined approach to evaluating strategic opportunities while preserving cash and maintaining financial flexibility.” The comments underscore the company’s focus on long‑term value creation through strategic acquisitions rather than short‑term cash outlays.
Market reaction to the announcement was mixed. Some analysts noted that the non‑binding nature of the LOI and the potential for share dilution tempered enthusiasm, while others highlighted the strategic benefits of expanding Youlife’s ecosystem. The company’s strong H1 2025 results and the clear upside from integrating the target firms’ regional expertise suggest that the deal could enhance revenue diversification and operational scale, but the lack of a definitive purchase price and the need for due diligence introduce uncertainty that investors are weighing.
The LOI remains in negotiation, with no purchase price or closing date set. Management has indicated that the transaction will be structured to preserve cash and align incentives, but the final terms will depend on valuation, regulatory approvals and the completion of due diligence. The deal represents a significant strategic pivot toward a dual‑engine growth model that combines organic expansion with targeted acquisitions, positioning Youlife to capture a larger share of China’s blue‑collar workforce market while managing the risks inherent in M&A transactions.
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