The saying "There are no successful enterprises, only enterprises of their time" perfectly captures the cyclical nature and ultimate fate of businesses. On the evening of June 22, 2026, SHANSHAN announced that as of June 18th, all the company's shares held by Shanshan Group and Pengze Trade had been unfrozen. A total of 304 million shares were transferred via judicial assignment to Anhui Wanwei Group. This officially finalizes the change in control of SHANSHAN at the equity level. From a nearly bankrupt small garment factory by the Yongjiang River to a global leader in both lithium battery anode materials and polarizer films, Zheng Yonggang spent his life navigating the massive waves of China's reform and opening-up and the new energy revolution. Yet, he ultimately could not lead the Shanshan business empire through the treacherous waters of generational transition and a downward industry cycle. Looking around, a multitude of private enterprises that once rode the wave, such as Zhonglai Co., Ltd., East Group, and Jinke Property Group Co., Ltd., have met the same fate of returning to state ownership as the tide receded. The curtain call for Shanshan represents the shared destiny and silhouette of all enterprises of an era. Perhaps, this is for the best.
A previous article raised a question: Could Zhou Ting resolve the debt issues of Shanshan Group and Shanshan Holding, and could she lead SHANSHAN out of its performance quagmire? A year and a half later, the answer has been revealed in a different manner. A restructuring plan has addressed the debt problems, the listed company's control has found a new owner, and SHANSHAN has sailed from the turbulent era of the Zheng family into the new channel of Anhui's state-owned capital. For creditors, investors, employees, and all those concerned about Shanshan, this outcome at least means the suspense is over. However, this conclusion is somewhat lamentable. The company Zheng Yonggang built with his own hands ultimately failed to achieve a smooth transition within the family.
Shanshan's Timeline: The Turmoil Began with a Power Vacuum
The first half of Shanshan's story is almost a classic case study of a Chinese private enterprise's transformation, upgrading, and rapid advancement. "Shanshan suits, so stylish" is a familiar memory for a generation of Chinese. Zheng Yonggang started with garments, built Shanshan into a nationally renowned brand, and initiated a shift into new energy while the core apparel business was still thriving. In 1999, Shanshan entered the lithium battery anode material sector. At that time, China's new energy vehicle industry was not yet defined, and lithium battery materials were little known. Shanshan subsequently focused on anode materials for a long period, becoming one of China's earliest companies to industrialize lithium battery materials. Zheng Yonggang's strategic foresight and prescience deserve admiration from later generations.
In 2021, Shanshan acquired LG Chem's polarizer business, achieving another crucial leap from lithium battery materials to display materials. By this point, SHANSHAN had established two main businesses: anode materials for power batteries, energy storage batteries, and consumer electronics batteries; and polarizer films for high-end display industry chains including TVs, monitors, laptops, vehicle displays, and OLEDs. Unexpectedly, a clothing brand ultimately grew into a global leader in artificial graphite anodes and large-size polarizer films. This was the core of Zheng Yonggang's business acumen: he dared to pivot to new industries while the old one still generated cash flow, and he was willing to go all-in on long-term sectors before the capital market fully understood them.
Shanshan's problems emerged after his passing, somewhat similar to the situation with Wahaha's Zong Qinghou. Zheng Yonggang's sudden death left no legally valid will, plunging the vast business empire into an immediate vacuum of inheritance and control. On one side was Zheng Ju, Zheng Yonggang's son from a previous marriage, who quickly took over group affairs with the support of veteran Shanshan executives. On the other side was his widow, Zhou Ting, who, with their three minor children, asserted inheritance rights. The two sides engaged in intense contention over the equity of Shanshan Holding and Shanshan Group, and control of the listed company.
In May 2023, this wealthy family dispute reached a first-stage outcome: Zheng Ju became Chairman of SHANSHAN, and Zhou Ting became a director, leading outsiders to initially believe the conflict had subsided. However, the calm did not last long. In November 2024, Zheng Ju resigned as Chairman, and Zhou Ting succeeded him as the new head of the listed company. Within just one month of taking office, she pushed to replace the Lixin Certified Public Accountants, which had served Shanshan for 22 years, with Dahua Certified Public Accountants. This was seen by the market as a strong signal of financial consolidation and control reinforcement.
Beneath the surface of family infighting was a debt crisis that had long been brewing. The aggressive expansion during Zheng Yonggang's era rapidly exposed risks after the founder's death: the credit ratings of Shanshan Group and Shanshan Holding were successively downgraded, multiple debts defaulted, and their holdings in the listed company were intensively subjected to judicial freezes and sequential freezes. By October 2024, the total interest-bearing debt of Shanshan Group on a consolidated basis (excluding the listed company) reached 12.265 billion yuan, of which 11.42 billion yuan was short-term debt maturing within one year, indicating nearly exhausted liquidity.
In February 2025, the Ningbo Yinzhou District People's Court formally ruled to accept the restructuring application of Shanshan Group. In March of the same year, the court further ruled for the substantive merger and restructuring of Shanshan Group and Pengze Trade. The debt problems of the Shanshan system finally evolved from an "off-balance-sheet risk" for the listed company into a core variable directly impacting control. Shanshan Group is the controlling shareholder of SHANSHAN, and Pengze Trade holds a large number of SHANSHAN shares. Their substantive merger and restructuring meant that control of the listed company had become a core asset in the debt repayment plan. By this point, the aftermath of Shanshan had exceeded the scope of internal family coordination and was formally handed over to the judicial restructuring mechanism.
How Did the Leader Get Trapped in the Cycle?
Shanshan's predicament was never solely a family inheritance dispute; it was an inevitable tragedy under the dual pressures of the industry cycle and debt leverage. As a pioneer and global leader in China's lithium battery anode materials, the collapse of the Zheng business empire coincided perfectly with the complete cycle of the anode industry, from nationwide capacity expansion to capacity rationalization. Data from Gaogong Lithium Industry (GGII) shows that from 2020 to 2025, China's anode material shipments surged from 418,000 tons to 2.9 million tons, with a five-year compound annual growth rate of 47.5%. The simultaneous explosion of new energy vehicles and energy storage led the entire sector into a collective strategic delusion where expansion was seen as the correct path.
By the end of 2025, China's total nominal anode production capacity had exceeded 4.2 million tons per year, 2.15 times the actual demand for that year. Among this, planned capacity for low-end artificial graphite reached over three times the real demand, becoming the hardest-hit area of overcapacity. The story seen in photovoltaics is repeating in areas like lithium battery cathodes, anodes, separators, and electrolytes. Of course, on the other hand, high-end capacity in various segments remains tight.
The tide receded faster than imagined. Starting from 2023, anode material prices and graphite processing fees declined simultaneously, with low-end, homogeneous products bearing the brunt first. The price drop did not affect all companies equally. High-end products like fast-charging anodes, silicon-based anodes, and long-cycle energy storage anodes maintained relatively stable pricing power. The real pressure was on small and medium-sized capacities lacking customer lock-in, integrated supporting facilities, and reliant on outsourcing. The industry exhibited an extremely fractured dual structure: leading companies, relying on integrated capacity, high-end technology, and core customer relationships, managed to break through the adversity. Companies like BTR New Material Group Co., Ltd. and Putailai maintained capacity utilization rates of over 90% for their mainstream production lines, with prices for high-end fast-charging anodes and silicon-carbon anodes remaining firm or even rising 3%-5% within the year. In contrast, small and medium-sized manufacturers lacking graphite processing support and stable customers operated at less than 50% capacity utilization. Tiantie Technology directly terminated a 100,000-ton anode project, Zhongke Electric slashed 330,000 tons of homogeneous capacity plans at once, and countless cross-border players died before even starting production.
EVTank data shows that in 2025, China's anode material shipments reached 2.922 million tons, a year-on-year increase of 38.1%. BTR, Shanghai Shanshan, and Zhongke Xingcheng ranked in the top three, with shipments of 595,000 tons, 518,000 tons, and 373,000 tons respectively. These three together held a 50.9% market share. Shanshan remained in the first tier, but the industry had entered a stage of comprehensive competition among leading players based on cost, customers, and technology.
What truly overwhelmed Shanshan was the highly leveraged debt of its controlling shareholder. In 2023, the company's net profit attributable to shareholders plummeted 71.56% year-on-year. For the first three quarters of 2024, net profit was only 23.21 million yuan, a year-on-year decline of 98.07%. The sharp contraction in the core business's ability to generate cash flow meant it could neither provide a lifeline for the controlling shareholder's tens of billions in debt nor support its own counter-cyclical consolidation. Conversely, the negative impact of the controlling shareholder's shares being repeatedly frozen and debt defaults continued to suppress the listed company's valuation and financing credibility, ultimately entering a death spiral.
Restructuring the Crisis: Why Did Anhui State-Owned Capital Win the Bid?
The restructuring path for Shanshan Group and Pengze Trade was not smooth. In June 2025, the administrator publicly solicited restructuring investors. Initially, it was decided that Jiangsu Xinyangzi Commerce would lead a consortium including TCL Industrial Investment and Orient Asset Management to enter the scene. The market expected Shanshan to undergo a debt restructuring led by private capital. However, this plan ultimately failed to materialize, and the investment agreement was terminated in November 2025, prompting the administrator to restart the investor solicitation process.
In February 2026, the final answer was revealed: a consortium composed of Anhui Wanwei Group Co., Ltd. and Ningbo Financial Assets became the final restructuring investor. This time, the rescuer was purely state-owned capital. Wanwei Group is a wholly state-owned enterprise under the Anhui Provincial State-owned Assets Supervision and Administration Commission. Furthermore, Anhui Conch Group is advancing the restructuring of Wanwei Group. Upon completion, Conch Group will become the controlling shareholder of Wanwei Group, and thus the indirect controlling shareholder of SHANSHAN.
According to the restructuring arrangement, Wanwei Group will acquire 303,670,737 shares of SHANSHAN held collectively by Shanshan Group and Pengze Trade in cash, representing 13.50% of the total share capital. The debtors will continue to hold 188,606,119 shares, representing 8.38% of the total share capital, and will sign a concerted action agreement with Wanwei Group. After the restructuring is implemented, Wanwei Group will collectively control voting rights corresponding to 492,276,856 shares of SHANSHAN, representing 21.88% of the total share capital, becoming the controlling shareholder, with the Anhui Provincial SASAC becoming the actual controller.
The market tends to simplistically interpret Anhui state-owned capital's takeover of Shanshan as a bailout. This might be a misunderstanding of Shanshan's restructuring. The two rounds of restructuring investors were fundamentally different. The first investment plan, advanced by the consortium including Xinyangzi Commerce, TCL Industrial Investment, and Orient Asset Management, led the market to expect a restructuring path involving both industrial and financial capital. However, this plan ultimately failed. The announcement did not fully elaborate on the reasons. What is certain is that among multiple objectives such as creditor repayment, control stability, and business continuity of the listed company, Shanshan's restructuring required an investor with stronger credit and a longer coordination reach.
Wanwei Group's takeover of Shanshan should not be simplistically seen as a bailout. For creditors, state-owned capital taking over means a clearer repayment path. For the listed company, stable control helps restore confidence among banks, suppliers, and customers. For Anhui's state-owned capital, Shanshan remains a scarce industrial asset. It possesses globally top-tier anode material capacity, customer resources, and technological reserves, as well as a world-leading large-size polarizer business. Acquiring control of such a platform-based materials company at the cycle's bottom involves weighing costs and risks, but the industrial value has not disappeared.
More accurately, Shanshan is not exiting the industry but undergoing credit reconstruction. It is being separated from the private enterprise system controlled by the Zheng family and transferred into a new governance framework led by Anhui's state-owned capital. Whether Shanshan can regain the favor of the capital market depends on whether the new shareholder can stabilize the team, improve financing, retain customers, and refocus the two main businesses of anode materials and polarizer films on operations themselves.
Relying on the "Hefei model," Anhui has already built a complete lithium battery ecosystem spanning from vehicles and power batteries to upstream materials. As a global top-three anode leader with mature technology, leading customers, and scaled capacity, Shanshan being incorporated into the state-owned system through restructuring at the cycle's bottom can theoretically be understood as Anhui acquiring a core asset in the lithium battery sector at a relatively controllable cost, thereby perfecting the province's lithium battery industry chain.
This reflects the underlying logic of China's manufacturing cycle rationalization: in strong-cyclical, capital-intensive industries, private enterprises often pioneer technological breakthroughs and market development. When the cycle turns downward, the importance of financing costs, credit backing, and asset coordination capabilities rises, and state-owned capital begins to play a more crucial stabilizing role in the restructuring of some distressed leaders.
Furthermore, for the remaining retained shares, the plan designs arrangements for immediate settlement and future acquisition: Wanwei Group will provide immediate settlement funds at 11.50 yuan per share or commit to acquiring the relevant shares at 12.7075 yuan per share after the lock-up period expires, to be used for creditor repayment. This arrangement balances control stability with flexibility in creditor repayment.
Shanshan's transition to state ownership is also a landmark event signaling the anode material industry's entry into a "steady-state period of existing capacity." This means the industry's core competitive dimension has officially shifted from capacity expansion to competition based on credit costs and anti-cyclical capabilities. GGII data shows that after the price war of 2023-2025, the anode industry has completed its first round of market-driven rationalization: the combined market share of the top three (CR3) increased from 42% in 2020 to 58.3% in 2025, with over 35% of tail-end small and medium enterprise capacity rationalized. However, the true consolidation of the industry structure occurs precisely after this capacity rationalization.
Shanshan's state-ownership transition does not mean the anode industry has fully entered a state-dominated phase. More accurately, it marks that in the rationalization phase of strong-cyclical materials industries, the requirements for shareholder credit, financing capability, and governance stability have significantly increased. The anode industry is likely to evolve in three directions.
First, low-end price wars will marginally lose intensity but are unlikely to reverse quickly. Over the past two years, the decline in anode material prices stemmed from the concentrated release of new capacity, severe homogeneity of low-end artificial graphite, and some companies being forced to accept low-price orders to maintain operating rates and cash flow. After Wanwei takes over Shanshan, Shanshan's own credit environment and operational expectations are expected to improve, reducing its motivation to actively engage in low-level price wars. However, whether industry prices can truly recover ultimately depends on the exit speed of inefficient capacity, the resilience of energy storage battery demand, the penetration rate of fast-charging and long-cycle products, and whether leading companies can rebalance market share and profitability. In other words, changes in ownership can only improve an individual company's credit status; they cannot directly alter industry supply and demand.
Second, the competitive landscape will shift from an "expansion race" to "effective capacity stratification." The anode industry will not simply form a binary structure of state-owned giants and private niche players. A three-tier structure is more likely to emerge: The first tier consists of comprehensive leaders with scale, integrated cost advantages, core customer certification, and financing capabilities, continuing to dominate mainstream power and energy storage orders. The second tier comprises specialized companies with technological differentiation and customer loyalty, seeking premiums in areas like fast-charging anodes, silicon-carbon anodes, sodium-ion hard carbon, and ultra-long-cycle energy storage anodes. The third tier consists of homogeneous capacity lacking graphite processing support, stable customers, and financial backing, which will eventually exit through shutdowns, transfers, mergers, or withdrawals.
Shanshan being taken over by state capital does not mean the industry is entering a state-dominated stage. It more clearly highlights a reality: the anode material industry has moved from an era of "having capacity guarantees orders" to a stage where "having certification, cost advantages, and cash flow guarantees survival rights."
Third, technological iteration will shift from concept-driven to application-scenario-driven. After the cycle downturn, factors like customer certification, yield ramp-up, cycle life, safety margins, and comprehensive cost will become the real thresholds for whether a technological route can be industrialized. Future R&D investment will not decrease but will place greater emphasis on joint validation with battery manufacturers, vehicle manufacturers, and energy storage customers, and on transitioning from laboratory metrics to mass-production stability.
For an established leader like Shanshan, the greatest value brought by state capital's entry may not lie in short-term expansion, but in securing a more stable financing environment and a longer technology validation cycle for its anode business, allowing it to rebuild long-term competitiveness in fast-charging, silicon-based, hard carbon, and long-cycle energy storage materials.
The aftermath of Zheng Yonggang's passing has finally been settled. For creditors, the restructuring plan provides a repayment path. For retail investors, control uncertainty has been significantly alleviated. For Shanshan employees, the company can finally lift its head from the shadow of family disputes and debt. For the anode industry, the stability of a major leader helps preserve rational competition during the industry's rationalization. The next chapter for Shanshan will be written jointly by Anhui's state-owned capital, the new management team, creditors, customers, and the market. The story of Zheng Yonggang and Shanshan will remain in the history of China's new energy industry, carrying both glory and regret, serving as a cautionary tale for future generations. The legend has concluded, but the industry marches on.