Amidst market chatter about investment opportunities, a recent incident has thrust Li Xingxing, the son of Geely Automobile (GEELY AUTO) chairman Li Shufu, into the spotlight.
On October 20th, a fire broke out at the factory of Jiangsu Chengxing Phosph-Chemicals Co., Ltd. (600078.SH) located at No. 618, Meiyuan Street, Jiangyin City, Wuxi. The fire ignited when a small amount of yellow phosphorus leaked from a tanker and spontaneously combusted, resulting in a dramatic scene of flames and white smoke. Fortunately, the fire was quickly extinguished, causing damage to only 8 square meters without any casualties. Subsequent tests indicated that the surrounding environment and waterways remained unaffected.
On the evening of October 21, Jiangsu Chengxing Phosph-Chemicals announced a temporary halt in production at its Jiangyin facility, attributing the incident to a violation of operational protocols by personnel from a third-party logistics company. The company confirmed that the incident did not result in significant losses.
Having just undergone a change in ownership in 2022, Li Xingxing is now the actual controller of Jiangsu Chengxing Phosph-Chemicals. As of October 23, the company's shares closed at 8.55 yuan, giving it a market capitalization of 5.8 billion yuan.
Li Xingxing stepped into his role three years ago as Chengxing encountered safety issues. As a well-known phosphochemical giant established in 1994 and publicly listed since 1997, the company primarily produces phosphoric acid. This key intermediate chemical is crucial across various industries, including food, pharmaceuticals, flat panel displays, semiconductors, integrated circuits, and chips. Currently, Chengxing's phosphate products such as food-grade and pharmaceutical-grade calcium hydrogen phosphate and sodium and potassium phosphates are widely used in daily chemicals, medicine, and the food sector. Renowned firms like Nestlé, Henkel, and Jiangsu Huan Chemical hold Chengxing in high regard.
However, Chengxing's journey has not been without challenges. In February 2019, its former major shareholder, Chengxing Group, faced a debt crisis and was found to have misappropriated 3.585 billion yuan from the listed company between 2011 and 2014. In April 2021, Chengxing announced a full provision for bad debts amounting to 2.178 billion yuan regarding the funds occupied by the large shareholder, leading to a transition from positive to negative net assets for the company.
This opened a "Pandora’s box," resulting in a series of legal ramifications as various creditors filed lawsuits against both the listed company and the major shareholder. Creditors even sought bankruptcy reorganization for Jiangsu Chengxing. On May 6, 2021, with its audited net assets for the 2020 fiscal year being negative and its financial reports deemed unable to express an opinion, the stock received a delisting risk warning and was marked with an "ST" designation.
While Chengxing struggled through the debt crisis, in 2022, Li Xingxing acquired a 25.78% stake in the company through his company, Yaoning Technology, for 517 million yuan, thus becoming its actual controller and chairman. Following this acquisition, he implemented several reforms and strategic adjustments to address the capital occupation issues and restore normal corporate governance. By June 2024, Chengxing successfully lifted the ST designation.
Despite this progress, the company has faced ongoing performance difficulties. Under Li Xingxing's leadership, Chengxing achieved a record revenue of 4.538 billion yuan in 2022; however, revenues dropped to 3.101 billion yuan in 2023 and 3.356 billion yuan in 2024, with net profits declining from 521 million yuan in 2022 to losses of 61 million yuan and 199 million yuan in 2023 and 2024, respectively. In the first half of 2025, Chengxing finally turned a profit, reaching revenues of 1.776 billion yuan, up 9.85% year-on-year, with a net profit of 18.56 million yuan, reflecting a staggering 211.08% increase.
Unexpectedly, just as things seemed to finally stabilize, Chengxing faced another safety incident. This wasn't Chengxing's first encounter with fires, as a subsidiary, Jiangyin Chengxing Daily Chemicals, experienced an explosion in August 2020 that resulted in one injury. Nevertheless, regarding the recent incident, Chengxing has reassured investors that the factory maintains adequate inventory levels of phosphoric acid and phosphates, and production orders can be fulfilled via its wholly-owned subsidiary in Qinzhou if needed.
In another setback, just four days before the fire at Chengxing, Li Xingxing's newly established OneStar Robotics (成立于2025年5月) announced its dissolution after only five months of operation, leaving its office empty. Known for its research and development focus, OneStar Robotics had attracted notable talent, including teams from Fudan University and Tsinghua University.
However, reports indicated that the office displayed signs of abandonment, with its name and logo removed, while only a few technical staff remained. Notably, the company's WeChat public account was cleared, closely aligning with the timeline of its establishment and subsequent collapse.
Industry observers attributed the quick downfall of OneStar to internal disagreements among the founding team, despite its initial successful fundraising rounds with substantial investments from Geely-backed firms.
Li Xingxing and his sister Li Ni, also both involved in various business ventures, represent the next generation of the Li Shufu family's corporate landscape. Li Xingxing, a graduate in economics from Essex University, has a history with Geely Group and a track record of leading its premium Lynk & Co brand to market success. In contrast, Li Ni maintains a lower profile but also exerts influence in the Geely ecosystem, controlling a turbocharger manufacturer currently preparing for an IPO.
Their business strategies highlight a unique pathway for second-generation successors seeking to blend inherited legacy with independent entrepreneurial ventures. Balancing these dynamics will pose significant challenges for them moving forward.