Leshan billionaire Zhang Hua takes control and quickly clears the "baggage"; Shangwei Co., Ltd. provisions 18 million yuan for impairment, dragging down performance for the first time in four years with a loss

Ask AI · Why did Zhang Hua rush to clear assets of Shangwei Co., Ltd. after taking control?

(Image source: Visual China)

Blue Whale News, March 19th (Reporter Xu Xiaochun, Intern Yang Shuo) Recently, Shangwei Co., Ltd. (603333.SH) submitted its first performance report after the change of ownership. Amid the large-scale disposal of old “baggage,” the company’s net profit turned from profit to loss. In 2025, Shangwei Co. achieved approximately 1.41 billion yuan in revenue, down 18.73% year-on-year, with a net loss of 47.2932 million yuan attributable to the parent.

In May 2025, Le Shan billionaire Zhang Hua took control of Shangwei Co. through his subsidiary Fuhua Chemical. Subsequently, Zhang Hua quickly promoted a 1.144 billion yuan private placement plan, aiming to increase his stake and further consolidate control. Meanwhile, Shangwei Co., with its rapidly rising short-term debt ratio, urgently needed new capital “blood transfusions.”

By the end of 2025, Zhang Hua incorporated Fluorine Taihua into Shangwei Co., marking the company’s official entry into the electronic chemicals sector. However, the new asset business has not yet significantly boosted the company’s performance. How Shangwei Co. plans to develop new growth tracks after shedding old baggage remains to be seen.

“Change of ownership” leads to impairment provisions and loss, turning the company’s net profit into a loss

Data shows that Shangwei Co. was established in 2003, mainly engaged in R&D, production, and sales of high-end specialty cables. The company focuses on markets such as nuclear power, new energy, rail transit, smart grids, and military ships. In 2019, it was listed on the Shanghai Stock Exchange Main Board.

In December 2024, the original actual controller, Li Guangsheng, was sentenced to 3 years and 2 months in prison for manipulating the securities market. His holdings in Shangwei Co. were auctioned off judicially. In May last year, Fuhua Chemical acquired a 25.35% stake in Shangwei Co. through judicial auctions and other means at a cost of 758 million yuan, becoming the new controlling shareholder, with Zhang Hua as the actual controller. According to the 2025 Hurun Rich List, Zhang Hua ranks 1022nd with a wealth of 7 billion yuan.

In recent years, Shangwei Co.'s business has barely maintained profitability. From 2022 to 2024, its net profits attributable to the parent were 18.305 million yuan, 20.443 million yuan, and 16.342 million yuan, respectively.

Under the “change of ownership,” the company’s revenue shrank significantly, and the performance forecast explicitly mentioned “phase challenges caused by the change of control.” In 2025, the company’s cable business shrank sharply, with special cable revenue dropping from 1.547 billion yuan in the same period last year to 1.275 billion yuan, and ordinary cable revenue decreasing by 36.33% year-on-year.

Additionally, the new owner’s focus on “shedding baggage” further pressured current profits.

By the end of 2025, the company made impairment provisions of 4.1475 million yuan for investment properties and 2.8048 million yuan for fixed assets. It also scrapped assets with an original value of 34.8141 million yuan, involving a net loss of 11.2098 million yuan, due to outdated technology and lack of use value, as part of smart factory upgrades. These asset impairments and scrapping reduced the company’s total profit in the 2025 consolidated financial statements by 18.1621 million yuan.

The company explained that the scrapped assets included machinery and equipment that were technologically outdated and had no economic value, and buildings with aging structures that were part of the company’s “digital and intelligent upgrade” project, requiring scrapping for upgrades.

Regarding why asset impairments were not made earlier but concentrated at the end of 2025, Blue Whale News contacted Shangwei Co., but the call was not answered.

Ultimately, under multiple factors, Shangwei Co. reported a loss in its annual report.

“New owner” capital operations “inject blood,” while former actual controllers accelerate their exit

In May 2025, the control transfer of Shangwei Co. was officially completed. Zhang Hua quickly promoted a private placement of 1.144 billion yuan to “inject blood” into the listed company, further consolidating control and planning capital operations such as capital injections.

By the end of 2024, Shangwei Co.'s asset-liability ratio was about 43.89%, which increased by nearly 12 percentage points in just one year. The company’s approximately 475 million yuan in cash was needed to cover about 562 million yuan in interest-bearing debt. The liabilities left by Li Guangsheng required new capital to fill the gap.

Two months after the change of ownership, in July 2025, Shangwei Co. announced plans to issue shares to Fuhua Chemical to raise funds, with about 947 million yuan intended to supplement working capital, accounting for 82.78% of the total fundraising. The share issuance price was set at 6.31 yuan per share, but as of March 19, the stock closed at 7.97 yuan per share, still below 80% of the current market price.

The announcement indicated that after the share issuance, Zhang Hua, through Fuhua Chemical, would hold 42.21% of the company’s shares, further consolidating control. The plan has not yet been completed.

Fuhua Chemical is a leading chemical company in Sichuan, producing fine chemicals and basic chemicals. It ranks among the top three globally and second domestically in glyphosate capacity, and its ion-exchange membrane caustic soda capacity ranks first in Southwest China. Its clients include Syngenta, KODEX, Sumitomo Chemical, Nufarm, and Barclays.

By the end of 2025, Zhang Hua began integrating his assets into the listed company. In December, Shangwei Co. announced the completion of a 51% equity increase in Sichuan Zhongfutaihua New Material Technology Co., Ltd. (“Zhongfutaihua”), officially entering the electronic chemicals sector. Fuhua Chemical promised that from 2026 to 2028, Zhongfutaihua would achieve a cumulative net profit attributable to the parent of no less than 180 million yuan.

According to the annual report, Zhongfutaihua focuses on high-value-added fluorochemicals and new energy chemicals, with key projects including a 200,000-ton-per-year hydrogen peroxide plant, a 60,000-ton electronic-grade anhydrous hydrogen fluoride and hydrofluoric acid project, and a 600,000-ton sulfuric acid project.

However, based on current progress, this new performance curve has yet to support the company’s performance. As of the end of 2025, Zhongfutaihua’s core projects are still under construction.

It is worth noting that besides Fuhua Chemical, Zhang Hua’s family business also involves investments in control, pulp and paper production and sales, and bulk commodity trading, with many companies earning tens of millions, but most are still operating at a loss. In 2025, Zhang Hua has been divesting loss-making assets to raise funds.

In May 2025, Hengfeng Paper announced a revised restructuring plan, which involved issuing shares to Zhang Hua and his controlled Zhujiang Paper to acquire 100% of Jinfeng Paper, with a transaction value of about 268 million yuan, a 272.2% premium. In March this year, the deal was completed, and Zhang Hua and his controlled Zhujiang Paper held 9.35% of Hengfeng Paper. Data shows that from 2022 to 2024, Jinfeng Paper’s net profit attributable to the parent was -17.7863 million yuan, -22.4781 million yuan, and -2.2696 million yuan, respectively.

While Zhang Hua “takes control” of Shangwei Co. and clears assets, Li Guangsheng’s brother, Li Guangyuan, is accelerating his withdrawal. A few days before the annual report, Li Guangyuan completed a share reduction plan. The announcement showed that by March 10, 2026, he had sold 6.2152 million shares, accounting for 1%, at prices between 8.07 and 9.12 yuan per share, cashing out 53.0347 million yuan; his shareholding dropped to 8.98%.

As of the close on March 19, Shangwei Co.'s stock price was 7.92 yuan per share, down 3.30%, with a total market value of 4.922 billion yuan.