ShunNa Co., Ltd. shares have increased by over 100% this year, and the controlling shareholder is迎来“debt relief” turning point?

Ask AI · Can a Jump in the Stock Price Resolve the Controlling Shareholder’s 10-Year-Old Debt?

The stock surged by more than double year-to-date. The strong performance of Shunna Appliance not only caught the market’s attention, but also unexpectedly uncovered a capital “old account” from nearly 10 years ago. As the stock hit new highs, the debt issue left behind by a complex leveraged acquisition made by the company’s controlling shareholder at the time appears to have been given a chance for a turnaround.

On March 17, Shunna Appliance’s stock price once again hit the daily limit. Its cumulative gain year-to-date has already exceeded 146%. Even with a pullback in recent days, the cumulative gain is still more than doubled.

And Shunna Appliance’s sharp rally this time may be closely related to its core power transformer business. With demand for power infrastructure surging, as a transformer manufacturer, Shunna Appliance’s operating performance has also grown steadily. In the first three quarters of this year, the company achieved attributable net profit of RMB 80.5149 million, up 12.94% year over year.

As Shunna Appliance’s market value rises along with the tide, it may allow the controlling shareholder to achieve “debt resolution.” In 2016, Guangzhou Huifuboyin Investment Partnership Enterprise (hereinafter referred to as “Huifuboyin”) agreed to acquire 120 million shares of Shunna Appliance at a price of RMB 1.55 billion, representing 17.37% of the company’s total share capital. Of the acquisition funds, RMB 1.0 billion came from the Pudong Development Bank Guangzhou Branch, and the remaining RMB 550 million came from the individual Sun Jiancheng.

According to the announcement at the time, the Pudong Development Bank’s contribution had an annualized fixed return of 7.3%, with the remaining returns belonging to Sun Jiancheng. But the issue is that Shunna Appliance had a close relationship with the P2P giant “Caogen Investment” at the time. As regulation tightened, Caogen Investment went into default in 2018, and the 120 million shares of Shunna Appliance held by Huifuboyin were also judicially frozen.

Now, as Shunna Appliance’s stock price climbs strongly, based on the current market value, the value of the shares held by Huifuboyin has risen to RMB 2.0 billion. This means that, as the priority capital provider, Pudong Development Bank may not only recover the entire principal, but may also receive the full amount of interest.

******** Shunna Appliance ************** up twofold year-to-date **************

Recently, Shunna Appliance’s performance in China’s A-share secondary market has been particularly eye-catching. In 10 trading days, it logged 6 consecutive daily limit-up boards.** As of now, its cumulative gain year-to-date has exceeded 100%, ranking among the热门 targets in the A-share market for the year to date****.**

The strong upward momentum in Shunna Appliance’s stock this round may be closely related to its core transformer business. With global artificial intelligence compute capacity infrastructure entering a phase of rapid expansion, demand for power infrastructure supporting it has seen explosive growth, and the transformer sector’s business outlook has continued to rise.

According to Citi’s market calculations for the global high-voltage power transformer market, the supply-demand gap in the industry in 2025 is already around 30%. From 2026 to 2028, industry annual supply will continue to remain below annual demand; the cumulative supply-demand gap will expand continuously from 708GVA in 2025 to a peak of around 1699GVA in 2028.

Against this backdrop, according to data from the General Administration of Customs, China’s transformer export total reached a record RMB 64.6 billion in 2025, up nearly 36% year over year. The average export unit price of transformers rose to RMB 205,000, up about one-third from the previous year; both volume and price increased.

As a manufacturer deeply engaged in this field, Shunna Appliance has the capability to supply end-to-end power distribution equipment solutions. Its products cover all product categories, including transformers, switchgear cabinets, busbar head cabinets, terminal power cabinets, distribution boxes, as well as supporting DC operating power supplies, among others.

Especially in the compute center supporting segment,** the company **** not only cooperates with major data centers in multiple compute hub regions such as the Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area, but also uses them in data centers for all export projects.**** **

From the revenue structure perspective, the transmission and distribution power equipment series products are the company’s absolute core revenue pillar. In the first half of 2025, this segment generated revenue of RMB 1.07 billion, accounting for as much as 99.79% of total revenue.

With a very strong focus on its main business, it also lays a solid foundation for earnings growth. Data show that in 2024, the company achieved total operating revenue of RMB 2.420 billion, up 17.06% year over year; it achieved attributable net profit of RMB 94.0525 million, up 46.10% year over year.

Entering 2025,** the**** company’s profitability continued its growth trend. In the first three quarters, it achieved revenue of RMB 1.608 billion, down slightly by 5.23% year over year, while attributable net profit still reached RMB 80.5149 million, up 12.94%.**

******** Helping the major shareholder ************** “debt resolution”? **************

Shunna Appliance’s stock price has surged sharply recently, which has also brought to light the secret behind the controlling shareholder’s urgent need to “resolve debt.”

In April 2016, Shunna Appliance issued an announcement stating that the company’s original controlling shareholder, Xizang Huishun Investment Co., Ltd. (hereinafter referred to as “Xizang Huishun”), planned to transfer its 120 million shares in the company—about 17.37% of the company’s total share capital—to Huifuboyin at a price of RMB 12.92 per share through a share transfer agreement. The total transaction consideration was RMB 1.55 billion, representing a premium of more than 30% over the closing price before the company suspended trading.

After the completion of this transaction, Huifuboyin formally became Shunna Appliance’s controlling shareholder and began a series of capital operations. In early 2017, Shunna Appliance, under the pretext of expanding into bulk trading and supply chain finance business and pushing the company’s transformation, spent RMB 450 million to acquire 60% of the equity interests in Zhejiang Hansheng Chuangshi Industry Co., Ltd. (hereinafter referred to as “Zhejiang Hansheng”).

After the acquisition was completed, at the end of 2017, Chen Kong, the actual controller of Zhejiang Hansheng, arrived at Shunna Appliance and became the company’s new chairman.

This series of changes drew regulatory attention. The Shenzhen Stock Exchange sent a letter asking whether Huifuboyin and Chen Kong had any relationship of acting in concert.** Although both sides explicitly denied having any related-party relationship or arrangements for acting in concert, based on publicly available information, Zhejiang Hansheng and Huifuboyin are**** closely**** connected with Caogen Investment, a leading P2P platform at the time.**

According to disclosures in Caijing Magazine, Zhejiang Hansheng was previously a subsidiary under Caogen Investment, and its actual controller Chen Kong and Caogen Investment’s founder Jin Zhongxiao had both previously served as practicing lawyers at Zhejiang Tuoyuan Law Firm. Their ties ran deep.

In addition, disclosures by Shunna Appliance show that all of the funds used by Huifuboyin to acquire the equity in the listed company came from the Ping An Huithong Huiying’Aofeng Huifuxi—No. 2 special asset management plan.

This asset management plan was established through subscriptions by two tiers of investors, an A-class and a B-class. The A-class investor was Pudong Development Bank’s Guangzhou Branch, with a capital contribution of about RMB 1.0 billion; the B-class investor was the individual Sun Jiancheng, with a capital contribution of about RMB 550 million.

With respect to how Sun Jiancheng, who previously had no reputation in the capital markets, was able to put up RMB 550 million, it is understood that Sun Jiancheng had served as the legal representative and general manager of a financial leasing company under Caogen Investment. And like Jin Zhongxiao and Chen Kong, he also had work experience at Zhejiang Tuoyuan Law Firm.

Therefore, Sun Jiancheng, Jin Zhongxiao, and Chen Kong split responsibilities among three routes: Jin Zhongxiao handled the P2P business to absorb investment and wealth-management funds; Sun Jiancheng was responsible for obtaining controlling rights of the listed company; and ultimately Chen Kong became chairman of the listed company, completing control over the listed platform.

However, this carefully constructed capital scheme collapsed soon after, as strong regulation was implemented across the online lending industry. In July 2018, Caogen Investment officially defaulted. Jin Zhongxiao, the actual controller, was sentenced for illegally absorbing public deposits and committing fraud in fund-raising, with the amount involved close to RMB 10 billion.

Against this backdrop, Chen Kong, then chairman of Shunna Appliance, was immediately arrested. Huifuboyin’s 17.37% equity interest in Shunna Appliance was also judicially frozen.

Meanwhile**, Shunna Appliance’s stock price experienced a cliff-like plunge. In 2018 alone, the cumulative decline reached as much as 76.03%. By year-end, the closing price was only RMB 2.53 per share. Based on this calculation, the market value of Huifuboyin’s holdings was left with only RMB 304 million, compared with the RMB 1.55 billion share purchase cost—amounting to a floating loss of as much as RMB 1.246 billion.**

Under the scale of the huge floating loss, not only did B-class investor Sun Jiancheng’s investment end up with no chance of recovering principal, but also Pudong Development Bank, the A-class investor, faced the risk that its RMB 1.0 billion priority contribution could not be fully recovered.

According to the announcement disclosed at the time, Pudong Development Bank’s priority contribution enjoyed an annual fixed yield rate of 7.3%. The principal and the agreed returns of Pudong Development Bank needed to be fully settled first under the asset management plan’s proceeds distribution, and only the remaining portion could be distributed to Sun Jiancheng. In addition, the maximum term of this capital contribution was 10.5 years; 2026 is exactly the year when this funding matures for settlement.

Now, as Shunna Appliance’s stock price has surged strongly, based on** the current stock price, **** the market value of the shares held by Huifuboyin has rebounded to**** 20**** billion yuan.**

Although the overall annualized return rate of this investment is not outstanding, it is sufficient to cover the repayment of principal and interest to the priority investors.** Calculating using the 7.3% annualized yield rate agreed in the contract, the principal and interest of Pudong Development Bank’s RMB 1.0 billion contribution total approximately RMB 1.730 billion. **** If estimated based on the current market value, **** Pudong Development Bank would not only be able to fully recover the principal, but also receive all the interest agreed under the contract.**

It is worth noting that Cai Huiyan, Deputy General Manager of the Asset Management Department of the Pudong Development Bank Guangzhou Branch, has concurrently served as a director of Shunna Appliance since 2024.

******** Behind-the-scenes big winner ************** Zhang Mingyuan **************

In fact, it was Shunna Appliance’s original actual controller, Zhang Mingyuan, who was the true biggest winner in this capital operation.

In 2001, Shunna Appliance fell into a reorganization predicament. At that time, Xizang Huishun, controlled by Zhang Mingyuan, obtained 144 million shares of Shunna Appliance from Guangdong Xinli Group within one month in two installments through judicial rulings and judicial auctions.

Among them, 108 million shares were obtained at RMB 1 per share, and 35.78 million shares were obtained at RMB 1.66 per share, with total cost of about RMB 167 million. Since then, Zhang Mingyuan became the new actual controller of Shunna Appliance. Afterwards, through share reductions and the company’s “10-for-2” bonus share plan, his shareholding increased to about 172 million shares.

Under Zhang Mingyuan’s play, Xizang Huishun transferred 120 million shares it held to Huifuboyin at RMB 12.92 per share, thereby cashing out RMB 1.55 billion in one move—far exceeding its original shareholding cost.

In addition to transferring equity to Huifuboyin, Xizang Huishun also transferred 52.4721 million shares to Zhang Mingyuan personally at RMB 8.50 per share. Adding the 2 million shares Zhang Mingyuan already held earlier, Zhang Mingyuan’s personal total shareholding in Shunna Appliance was 54.4721 million shares.

Now, as Shunna Appliance’s stock price continues to rise, the market value of the shares held by Zhang Mingyuan has jumped to RMB 10.12 billion, with substantial unrealized gains. Against this backdrop, on February 10, Shunna Appliance issued an announcement stating that Zhang Mingyuan plans to reduce his holdings in the company by no more than 6.9082 million shares.

Apart from receiving substantial investment returns, Zhang Mingyuan also obtained Shunna Appliance’s previously most important asset—Guangdong Wanjialexi Gas Appliances Co., Ltd. (hereinafter referred to as “Wanjiale Gas Appliances”).

In 2016, Shunna Appliance announced that it would transfer 100% of the equity interests in its wholly-owned subsidiary Wanjiale Gas Appliances to Xizang Shunhuix and Zhang Yicheng, respectively, with the two parties holding 40% and 60% of the shares. Among them, Zhang Yicheng is the son of Zhang Mingyuan, the actual controller of Xizang Shunhuix.

The transaction’s final pricing was RMB 744.98 million. This price was highly favorable to Zhang Mingyuan and his father/son relationship. According to the 2015 annual report, Wanjiale Gas Appliances contributed RMB 2.568 billion in revenue to Shunna Appliance that year, accounting for 62.16% of the company’s total revenue; its net profit accounted for 82.16% of the company’s total net profit, making it the company’s core profit source.

As can be seen, Zhang Mingyuan not only achieved huge investment gains in this game of capital, but also acquired the main operating-asset income of the listed company at an extremely low price—making him arguably the biggest winner.

Editor | Chen Bin