The A-share market has maintained a high level of activity in mergers and acquisitions since 2026. According to Wind data, over 130 companies disclosed progress related to M&A activities in the first quarter of 2026. Cross-border acquisitions are also increasingly common, with a recent listed company primarily engaged in the fruit and vegetable business now venturing into such a deal.

This company is Honghui Fruit & Vegetable Co., Ltd., often referred to as the "first fruit and vegetable stock."

Recently, Honghui Fruit & Vegetable announced plans to acquire a 41.128% stake in Jiangxi Shimei Pharmaceutical Co., Ltd. (hereinafter referred to as "Shimei Pharmaceutical") for 7 billion yuan. Upon completion, Shimei Pharmaceutical will become a controlling subsidiary of Honghui Fruit & Vegetable and be consolidated into the listed company's financial statements.

Established in 1992 by Huang Junhui, a native of Chaoshan, Honghui Fruit & Vegetable is a national key leading enterprise in agricultural industrialization with several well-known fruit and vegetable brands. The company went public on the Shanghai Stock Exchange in 2016, becoming the much-watched "first fruit and vegetable stock" in the capital market.

Shimei Pharmaceutical is a high-tech enterprise focused on the cardiovascular and cerebrovascular and chiral drug fields. It possesses two national-level R&D platforms, and its core products hold strong market competitiveness, making it a "long-standing player" in the antihypertensive drug market for cardiovascular diseases.

Why would a fruit seller acquire a blood pressure medication company, and moreover, seek controlling ownership?

On the surface, Honghui Fruit & Vegetable has faced performance pressure in recent years. From 2023 to 2025, the company's performance declined for three consecutive years. In the first quarter of 2026, its net profit attributable to shareholders was just over 3 million yuan, a year-on-year decrease of 33%. The company's net profit margin has remained below 2% for nearly three years, indicating an urgent need for change.

In its announcement, Honghui Fruit & Vegetable stated that this transaction aims to build a new development pattern driven by multiple businesses, comprehensively enhancing the company's sustainable development capabilities and overall risk resistance.

However, a closer look suggests this acquisition may not be as straightforward as it appears. The transaction occurred approximately one year after a change in control at Honghui Fruit & Vegetable, and shortly after the new controlling shareholder further increased its voting rights. Furthermore, the new controlling shareholder has a background involving state-owned assets and the pharmaceutical industry, and the acquisition target had previously planned an independent IPO. Therefore, behind Honghui Fruit & Vegetable's cross-border transformation for "self-rescue," there may be a meticulously planned strategy involving multiple parties.

**From "Chaoshan Family" to Suzhou State-Owned Assets: Change of Control for the First Fruit and Vegetable Stock**

This cross-border acquisition by Honghui Fruit & Vegetable is unexpected, much like its founder Huang Junhui's own cross-border entrepreneurial journey.

Huang Junhui was initially a surgeon. After graduating from university in 1984, he worked at hospitals in Foshan and Shantou. During his medical practice, he witnessed many farmers falling into poverty or returning to poverty due to illness. This led him to consider whether there were other ways beyond medicine to help farmers increase their income and fundamentally improve their lives.

In 1991, Huang Junhui made a bold decision: he resigned from his stable medical job to enter the agricultural sector. Recognizing the development opportunities in Shantou as a special economic zone and leveraging information from relatives (overseas Chinese in Southeast Asia), he identified a strong demand for Chaoshan fruits in the Southeast Asian market.

Consequently, in 1992, he founded the predecessor of Honghui Fruit & Vegetable—Shantou Special Economic Zone Honghui Food Co., Ltd.—embarking on a journey from fruit and vegetable trade to becoming a leading agricultural industrialization enterprise.

Starting with just three employees, under Huang Junhui's efforts, Honghui Fruit & Vegetable quickly stood out with an excellent market reputation and gradually developed into a professional agricultural product service provider integrating planting management, post-harvest procurement, origin pre-cooling, cold storage, pre-sorting, processing, packaging, and cold chain distribution.

In November 2016, Honghui Fruit & Vegetable listed on the main board of the Shanghai Stock Exchange, becoming the "first fruit and vegetable stock" in the A-share market at the time. After the listing, Huang Junhui and his wife Zheng Youwen collectively held 59.78% of the shares. With the company's market debut, the Huang Junhui family became billionaires. In 2020, the family was listed on the Hurun Rich List with an estimated wealth of 2.8 billion yuan.

Post-listing, Honghui Fruit & Vegetable's performance has been volatile, especially after 2019. While revenue scale saw no major changes, net profit showed an almost consistent downward trend. From 2019 to 2025, Honghui Fruit & Vegetable's revenue grew from 852 million yuan to 1.052 billion yuan, while its net profit attributable to shareholders declined from 78.9769 million yuan to 17.813 million yuan.

In the first quarter of 2026, both revenue and net profit of Honghui Fruit & Vegetable continued to decline, with net profit attributable to shareholders falling by 33.21%.

Faced with post-listing performance volatility and declining profits, Huang Junhui also attempted to lead the company in finding new growth areas. For instance, the company ventured into edible oil and meat trading businesses. However, in reality, while these new businesses generated some revenue, their profitability was low, contributing little to earnings.

The 2025 annual report showed that the company's meat trading business revenue reached 238 million yuan, a year-on-year increase of 121%, but its gross profit margin was only 2.10%. The gross profit margin for the edible oil business was 1.2%, and for the food business, it was -12.46%. These diversified new businesses were barely profitable.

Under pressure to urgently improve performance and achieve transformation, Huang Junhui chose an "alternative" path: a change of control. On June 13, 2025, after a five-day trading halt, Honghui Fruit & Vegetable announced that the controlling shareholder and actual controller had signed a share transfer agreement with Suzhou Shenze Ruitai Enterprise Management Partnership (Limited Partnership). The agreement involved transferring 151 million shares at a price of 5.68 yuan per share, representing 26.54% of the total share capital.

Furthermore, Huang Junhui and his wife Zheng Youwen signed a voting rights waiver agreement with Shenze Ruitai, under which Huang Junhui waived the voting rights corresponding to his 12% shareholding.

In July 2025, the share transfer registration was completed. After the transaction, Huang Junhui's shareholding ratio decreased from 44.19% to 17.66%, and his personal voting rights were reduced to only 5.66%. Shenze Ruitai became the new controlling shareholder with a 26.54% stake.

Shenze Ruitai has three shareholders: Shanghai Haoning Tonglan Industrial holds 2%, Suzhou Ruize Taian holds 18%, and Suzhou Zhanxingtou Industrial Fund Partnership holds 80%. The first two shareholders are controlled by natural persons Ye Tao and Liu Yang, while the latter shareholder is a Suzhou state-owned asset entity.

Consequently, the actual controllers of Honghui Fruit & Vegetable changed to Ye Tao, Liu Yang, and Suzhou Asset Investment Management Group Co., Ltd. This share transfer clearly represents a typical case of "state-owned asset entry," with Suzhou state-owned assets being the major financial backer.

Thus, the A-share "first fruit and vegetable stock," Honghui Fruit & Vegetable, changed hands, transitioning from the former Chaoshan-based Huang Junhui family to being primarily controlled by Suzhou state-owned assets.

**$700 Million Cross-Border "Transformation for Self-Rescue": A Meticulously Planned Win-Win for Multiple Parties**

On the evening of April 27, 2026, Honghui Fruit & Vegetable suddenly unveiled an acquisition plan. The company intends to spend 7 billion yuan to acquire a 41.128% stake in Shimei Pharmaceutical. Upon completion, the company will achieve substantive management control and financial consolidation control over Shimei Pharmaceutical, incorporating it into the listed company's consolidated financial statements.

From a financial perspective, this cross-border acquisition by a fruit and vegetable company of a pharmaceutical enterprise represents a forced transformation for self-rescue amid performance difficulties.

Since its listing, Honghui Fruit & Vegetable's performance has been volatile, with net profit attributable to shareholders in a continuous decline, particularly in its main business. In 2025, the revenue from Honghui Fruit & Vegetable's fruit and vegetable service business was 759 million yuan, accounting for over 70% of total revenue, a year-on-year decrease of 17.40%. Notably, revenue from the primary fruit business decreased by 17.99% year-on-year.

In contrast, the acquisition target, Shimei Pharmaceutical, is a high-quality asset. According to the company's announcement, Shimei Pharmaceutical achieved revenue of 356 million yuan in 2025, with a net profit of 145 million yuan, representing a year-on-year growth exceeding 30%.

Honghui Fruit & Vegetable mentioned that this acquisition is an important measure to actively seek and lay out a second growth curve while consolidating and strengthening its original main business.

In other words, after Shimei Pharmaceutical is injected into the company and consolidated into the financial statements, its annual net profit of over 100 million yuan would significantly boost Honghui Fruit & Vegetable's profits. If completed, this acquisition would undoubtedly provide timely assistance to Honghui Fruit & Vegetable.

However, looking beyond the financial perspective and considering the change in corporate control, Honghui Fruit & Vegetable's cross-border move appears to be a long-planned strategy involving multiple parties.

This acquisition occurred nearly one year after the change in control, clearly led by the new controlling shareholder and new actual controllers. Furthermore, before announcing the acquisition transaction, steps were taken to further reduce the voting rights of Huang Junhui and his concert parties.

On April 23, 2026, Honghui Fruit & Vegetable released a detailed report on changes in rights and interests. The announcement mentioned that Huang Junhui and his concert parties, including Zheng Youwen, Zheng Yongqiang, and Zheng Shaona, signed a concert party agreement, resulting in their combined voting rights exceeding 8%. Consequently, on April 23, Huang Junhui and his concert parties re-signed a "Voting Rights Waiver Agreement" with Shenze Ruitai, permanently waiving the voting rights, nomination rights, and proposal rights associated with 14.26% of the shares. The original agreement terminated upon the effectiveness of this new waiver agreement.

This move further reduced the voting rights of the original actual controller, Huang Junhui. His personal voting rights ratio was reduced to only 2.29%, and the combined voting rights of Huang Junhui and his concert parties were precisely controlled at around 8%, below 10%, leaving them with little ability to challenge the new controlling shareholder.

Additionally, examining the new controlling shareholder Shenze Ruitai reveals that the two natural persons, Ye Tao and Liu Yang, have backgrounds in the pharmaceutical industry. Ye Tao is the Chairman of Honghui Fruit & Vegetable, and Liu Yang is the General Manager.

Looking at the major financial backer, Suzhou state-owned assets, they have been active in the biopharmaceutical sector in recent years. According to media reports, at the 2026 Suzhou Entrepreneurs Conference, the "List of Key Emerging Industries and Key Future Industries in Suzhou City" was released, identifying biopharmaceuticals and high-end medical devices as key emerging industries for Suzhou's development. Suzhou's BioBAY has become one of the core hubs for biopharmaceutical innovation in China, gathering thousands of biopharmaceutical enterprises.

Clearly, Suzhou state-owned assets' interest in the traditional enterprise Honghui Fruit & Vegetable may not lie in its fruit business but rather in its "clean" financial status. The company's asset-liability ratio is below 20%, and it holds relatively ample cash flow, making it a suitable "clean shell" resource for developing pharmaceuticals.

Furthermore, reviewing announcements reveals that the new controlling shareholder paved the way for this acquisition last year. In November 2025, Honghui Fruit & Vegetable announced the initiation of asset disposal. The company transferred 100% equity of its wholly-owned subsidiaries, Fujian Honghui Fruit & Vegetable and Yantai Honghui Food, to Huang Junhui himself.

The company intended to sell, and Huang Junhui directly repurchased. This sale appears to have been preparation for making room for the injection of pharmaceutical assets.

Finally, considering the acquisition target, Shimei Pharmaceutical, the company was listed on the New Third Board in April 2016 and delisted in May 2018 to plan for a ChiNext IPO. It submitted application materials in June 2023. One year later, in June 2024, it updated the materials and submitted again. However, in November 2024, five months later, the company terminated its ChiNext IPO application.

With an independent IPO proving difficult, selling the company's controlling stake to a listed enterprise through a share transfer now allows Shimei Pharmaceutical to achieve a form of "backdoor listing," and its actual controllers can cash out a sum of money.

Thus, Honghui Fruit & Vegetable's cross-border acquisition appears to be a win-win action meticulously planned by multiple parties: state-owned assets, the listed company, and the acquisition target. Suzhou state-owned assets provided the funds, gained control of the listed company, further reduced the voting rights of the original controllers to ensure a smooth transition of control; then, non-core assets were divested to reduce the burden on the new controllers and create space for future asset injections; finally, a cross-border acquisition injected pharmaceutical assets, opening a new growth track and a new phase of development for the company.

However, Honghui Fruit & Vegetable's cross-border acquisition also faces challenges. First is the financial pressure. The 7 billion yuan acquisition funds, as announced by Honghui Fruit & Vegetable, will come from its own funds and self-raised funds. If self-raised funds involve bank borrowing, it may increase financial costs and potentially impact profits to some extent.

Secondly, Honghui Fruit & Vegetable is a fruit and vegetable enterprise, a market-sales-driven consumer company, while Shimei Pharmaceutical is a research-driven enterprise. Post-acquisition, whether the two can achieve synergistic development in management will test the management team.

Additionally, although the voting rights of the original actual controller Huang Junhui and his concert parties have been reduced to around 8%, they still hold 22.26% of the company's shares. If the post-acquisition results do not meet expectations, it is possible that the original controllers might unite with minority shareholders to protest, potentially affecting the stability of corporate equity management.

Overall, Honghui Fruit & Vegetable's cross-border acquisition into the pharmaceutical sector appears to be a meticulously planned, step-by-step strategy involving multiple parties. It offers the listed company hope for future growth and improvement amid performance difficulties while enabling a win-win outcome for the involved parties. Whether this acquisition ultimately achieves a synergistic effect greater than the sum of its parts remains to be seen over time.