Recent corporate filings reveal that the controller of Victory Giant Technology (Huizhou) Co., Ltd. (300476.SZ), Chen Tao, has transferred nearly half of his stake in the holding company to his spouse, Liu Chunlan, in a deal valued at over 24 billion yuan. This marks the family's first public move since the so-called "elevator incident," although it does not alter Chen Tao's effective control over the listed company.

Beyond the equity reshuffle, the company's first-half performance shows a marked slowdown, with both revenue and net profit growth rates decelerating significantly. Notably, its second-quarter deducted non-recurring profit turned negative. Despite a shift toward higher-end products, the gross margin has actually declined, and the stock price has retreated over 40% from its yearly peak.

Internal Family Equity Transfer Secures 24 Billion Yuan in Value

According to the announcement, Chen Tao transferred his 39% stake in Shenghua Xinye and a 35% stake in Hongda Investment to his wife, Liu Chunlan. Shenghua Xinye serves as the controlling shareholder of Victory Giant Technology, with Hong Kong Shenghong acting as a concert actor and Hongda Investment as the parent of Hong Kong Shenghong. As of the 2026 interim report, Shenghua Xinye held 13.72% of Victory Giant Technology, and Hong Kong Shenghong held 13.37%.

Prior to this adjustment, Chen Tao owned 90% of Shenghua Xinye and 70% of Hong Kong Shenghong, collectively controlling 21.71% of the listed company. Post-transfer, his stake in Shenghua Xinye drops to 51%, with Liu Chunlan holding 49%, and both hold 35% in Hongda Investment. Following the change, Liu Chunlan indirectly controls approximately 10% of Victory Giant Technology, valued at over 24 billion yuan based on the closing price of 241.6 yuan per share on the announcement day.

Chen Tao and Liu Chunlan have also signed a "Concert Party Agreement," ensuring Liu votes in line with Chen's decisions for all shares she holds, directly or indirectly. The company stated that this is purely an internal family adjustment among upper-level shareholders, with no change to the controlling shareholder's total shareholding or the company's control structure. This method of "splitting equity without splitting power" allows for family wealth redistribution while Chen retains firm control over the company.

Despite the official explanation, the market cannot ignore the context of Chen Tao's recent personal scandal. In early June, a video of Chen Tao in an intimate interaction with a woman in an elevator circulated online, sparking speculation of a marital rift. This caused a sharp drop in both A-share and H-share prices, with the A-share market capitalization evaporating over 20 billion yuan in a single day. The company responded by denying any impact on operations, and its president stated that the matter had been discussed with directors and reported to police.

Shortly after, rumors surfaced regarding product quality issues with the Rubin project's PCB, further pressuring the stock. The company issued a clarification in mid-July, categorically denying these claims and asserting strong demand and growing order books for AI-related PCB products. Despite these efforts, the share price has continued its downward trend, closing at 232.98 yuan on September 1st, more than 40% below its all-time high of 402.6 yuan reached in late May.

Margin Pressure and Doubling Inventories Signal Challenges

As a core PCB manufacturer, Victory Giant Technology focuses on high-end printed circuit boards used in AI servers, high-performance computing, cloud services, and consumer electronics. For the first half of 2026, it reported revenue of 11.629 billion yuan, up 28.77% year-over-year, and net profit attributable to shareholders of 2.857 billion yuan, up 33.3%. While both metrics grew, they represent a significant deceleration from the 86% revenue growth and 366.89% profit growth seen in the same period last year.

A notable factor in the profit figures is a fair value gain of 595 million yuan from increased valuations of held shares, accounting for about 18% of total profit. Excluding this, the deducted non-recurring profit would be 2.418 billion yuan, with growth slowing sharply from 365.69% to just 12.5%. In the second quarter alone, deducted non-recurring profit fell by 5.28% year-over-year, even as revenue grew 29.49%.

The company's gross margin has also come under pressure, sliding to 33.22% in the first half, a decrease of 3 percentage points year-over-year. The second quarter saw an even steeper decline of 6.73 points to 32.1%. Management attributes this to two main factors: a workforce expansion of over 30% to prepare for future orders and increased depreciation from new facilities and equipment being brought online.

Inventories have also surged dramatically, more than doubling year-over-year to 5.89 billion yuan by the end of June, up from 3.162 billion yuan at the end of 2025. The company states this is a deliberate strategy to stock up for large-scale production and rapid delivery of new products in the second half of the year, resulting in increased raw materials and work-in-progress.