The ownership transfer plan has been terminated! Dachen Co., Ltd. stock price hit the daily limit the day before suspension, and it is expected that net profit will be halved by 2025.

After being suspended for four trading days, Dechang Co., Ltd.’s (德昌股份) plan to transfer control has been officially terminated.

On the evening of April 1, Dechang Co., Ltd. (SH605555) announced that it would terminate the major matter involving a partial transfer of the company’s shares. The company’s stock will resume trading on April 2. Regarding the reasons for the termination, the company stated that it was mainly because the controlling shareholder, the actual controller, and the counterparty—“due to the large number of matters involved, the two sides could not reach agreement on certain core terms.”

Image source: Dechang Co., Ltd. announcement

A reporter from The Economic Daily (每日经济新闻) noted that right before Dechang Co., Ltd. released its trading halt announcement on the evening of March 26, the company’s stock price hit the daily limit that day.

Daily limit-up in the trading session prior to the suspension

According to publicly available information, Dechang Co., Ltd. was established in 2002, completed its shareholding system restructuring in 2019, and successfully listed on the Shanghai Stock Exchange in 2021.

At present, Dechang Co., Ltd. is mainly engaged in the research, development, and production of motors, carpet cleaning machines, personal care appliances, and home health care appliances. Its products mainly target markets in Europe and the United States, and it is one of China’s top ten vacuum cleaner export enterprises.

In addition to its small home appliance business, in 2017 Dechang Co., Ltd. also founded “Dechang Technology,” entering the automotive components track and focusing on the research, development, and production of brushless motors for automotive EPS (electric power steering system) and braking motors.

At a 2025 first-half earnings exchange meeting, Dechang Co., Ltd. disclosed that the company’s automotive motors mainly cooperate with Tier 1 customers such as Nidec, ZF, Jetta Gatte (捷太格特), and Continental, involving end vehicle manufacturers such as BYD, Changan, Li Auto, XPeng, SAIC, Leapmotor, Stellantis, and Tesla.

Judging from business mix, the 2025 half-year report shows that the small home appliance business is still the revenue pillar for Dechang Co., Ltd. In the period, revenue was 1.743 billion yuan, accounting for more than 86% of total revenue. However, compared with the small home appliance business, the growth rate of the company’s automotive motor business is clearly higher.

After the market closed on March 26, Dechang Co., Ltd. announced that it had received a notice from its controlling shareholder and actual controller stating that Mr. Huang Yuchang, Ms. Zhang Liying, Mr. Huang Zhi, and their related parties are planning to transfer part of the shares they hold in a major matter. This matter may lead to a change in the company’s actual controlling party. The company’s stock was suspended beginning from the opening of trading on the morning of March 27, 2026, and the expected suspension period is no more than 5 trading days.

However, it is worth noting that right before Dechang Co., Ltd. released its trading halt announcement on the evening of March 26, its stock price hit the daily limit that day.

Estimated 2025 net profit “cut in half”

It is also worth noting that behind this change-of-control plan, Dechang Co., Ltd.’s fundamentals are facing pressure as well.

According to Dechang Co., Ltd.’s 2025 annual performance forecast, the company expects that its net profit attributable to shareholders of the listed company for all of 2025 will be between 160 million yuan and 200 million yuan, a year-on-year decrease of 61% to 51%. Net profit excluding non-recurring gains and losses is expected to be between 145 million yuan and 185 million yuan, a year-on-year decrease of 63% to 53%.

Image source: Dechang Co., Ltd. announcement

Regarding the change in net profit, Dechang Co., Ltd. explained that due to the impact of international trade policies on its home appliance business, together with intensifying industry competition, leading to downward pricing, as well as the fact that new production capacity has started production and operation but is still in the ramp-up stage, with amortization expenses increasing year over year, resulting in an overall impact on gross profit margin. At the same time, affected by fluctuations in the U.S. dollar exchange rate, the company’s exchange gains in this period were about -18 million yuan, which decreased by about 60 million yuan compared with the same period last year.

As for the automotive components business, Dechang Co., Ltd. stated that in 2025, the relevant business segment will still maintain a rapid growth trend. “At present, the global EPS motor market is mainly occupied by international giants represented by Nidec. In recent years, the company has continuously promoted localization and substitution, with market share steadily increasing, and is gradually changing the supply-chain landscape in which EPS motors are led by foreign capital.” Dechang Co., Ltd. said this at the 2025 first-half earnings exchange meeting.

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The Economic Daily (每日经济新闻)