The restructuring of Shanshan Group attracted numerous "white knights," so why did Anhui state-owned capital ultimately take the lead? What future does Ningbo Shanshan Co.,Ltd. face?
A white knight has finally been chosen after much deliberation. On the evening of February 8, Ningbo Shanshan Co.,Ltd. announced the selection of a restructuring investor for Shanshan Group. Its stock price hit the daily limit up the following day, pushing its market capitalization above 35.5 billion yuan.
The restructuring consortium, composed of state-backed Wanwei Group, Conch Group, and local AMC Ningbo Financial Asset Management Co., Ltd., immediately boosted investor confidence. Furthermore, the investment from this restructuring party exceeded 7.1 billion yuan, significantly higher than the previous offer of under 3.3 billion yuan from the "private ship king."
This development comes approximately three years after the sudden passing of Shanshan brand founder Zheng Yonggang. After enduring a debt crisis and internal family disputes, the restructuring process itself has been fraught with complications. Now, the business empire built by Zheng Yonggang is likely to be taken over by Anhui state-owned capital. As the core asset of the Shanshan system, can Ningbo Shanshan Co.,Ltd., which was dragged down by its controlling shareholder's debt crisis, finally extricate itself from the mire?
The restructuring process has been unusually active. Unlike many bankruptcy restructurings, Shanshan Group's case has been less about despair and more about competitive interest. Last March, the Ningzhou Yinzhou District Court ruled to merge Shanshan Group and its affiliate Pengze Trading for substantive consolidated restructuring. At that time, confirmed debts within the Shanshan system reached approximately 33.55 billion yuan. Data disclosed six months later showed total declared claims against the Shanshan system had reached 42.08 billion yuan. Additionally, Ningbo Shanshan Co.,Ltd. reported a loss in 2024, and its stock price fell to a ten-year low, with market capitalization dropping below 20 billion yuan.
Despite its deep crisis, Shanshan attracted fierce competition from various capital groups. Following the first restructuring recruitment announcement in September last year, 17 potential investors expressed interest, including Jiangsu New Yangzi Commerce & Trade Co., Ltd., controlled by "ship king" Ren Yuanlin, as well as consortiums involving China National Building Material and BOE. Before the failure of the first restructuring plan, one interested party, Simac, dissatisfied with being excluded, even filed a lawsuit, a development that seemingly enhanced Shanshan's perceived value.
The subsequent second recruitment round, despite higher thresholds, attracted even more notable prospective investors. These included Fangda Carbon under Liaoning's richest person Fang Wei, state-backed Hunan Salt Industry, China Bao'an and its subsidiary BTR which have high business synergy with Ningbo Shanshan Co.,Ltd., and display industry leader HBM Group. Unexpectedly, Wanwei Group, which had not previously disclosed its interest, was selected.
According to the investment agreement, Wanwei Group will invest approximately 4.987 billion yuan to directly acquire a 13.5% stake in Ningbo Shanshan Co.,Ltd. The subscription price per share is about 43.5% higher than the 11.44 yuan offered in the first restructuring plan. The remaining 8.38% stake held by Shanshan Group and its affiliates will remain under their control post-restructuring but will be subject to a three-year acting-in-concert agreement with Wanwei Group. This arrangement gives Wanwei Group control over 21.88% of the voting rights in Ningbo Shanshan Co.,Ltd., securing a controlling position.
To settle debts related to the 8.38% stake, Wanwei Group will use both immediate capital contributions and forward purchase agreements to compensate creditors. In total, Wanwei Group could spend up to 7.156 billion yuan to gain control of Ningbo Shanshan Co.,Ltd. Meanwhile, Ningbo Financial Asset Management Co., Ltd., as a professional distressed asset management company, will handle the disposal of Shanshan Group's industrial assets excluding the Ningbo Shanshan Co.,Ltd. stake, which include bank equity, real estate, and medical projects. The restructuring investment plan is widely expected to pass the creditors' meeting.
Notably, China Bao'an, which entered the second recruitment round, was seen as a strong contender due to the synergy between its subsidiary BTR and Ningbo Shanshan Co.,Ltd., both being leaders in anode materials. After Ningbo Shanshan Co.,Ltd. announced the selected investor, China Bao'an issued a statement confirming its loss, disappointing many investors.
The primary attraction for investors flocking to the heavily indebted Shanshan Group is the valuable asset, Ningbo Shanshan Co.,Ltd. The company focuses on two high-growth sectors: new energy and advanced displays, specifically producing anode materials for lithium-ion batteries and polarizers for display panels. Polarizers contribute slightly more to revenue; these optical films are essential for LCD TVs, computers, smartphones, and automotive navigation screens, with clients including BOE, LG, and Sharp. Ningbo Shanshan Co.,Ltd. holds a 33% global market share in large-size TV and monitor polarizers, ranking first worldwide. Its anode materials business, specializing in artificial graphite, also leads globally in sales, supplying major battery makers like CATL, BYD, and ATL.
Being an industry leader in the hot new energy sector makes Ningbo Shanshan Co.,Ltd. inherently valuable. Industrial synergy was a basic requirement for restructuring investors. While candidates like China Bao'an, Hunan Salt Industry, and HBM Group met this criterion, Wanwei Group offered a unique fit. Its core subsidiary, Wanwei High-Tech, is a leader in PVA (polyvinyl alcohol), a key raw material for polarizers currently dominated by Japanese suppliers, representing a significant import substitution opportunity. A successful restructuring would allow Wanwei High-Tech to directly supply Ningbo Shanshan Co.,Ltd., reducing costs and securing the supply chain.
From a broader perspective, Wanwei Group is ultimately controlled by the Anhui Provincial SASAC, meaning the investment represents a strategic move by Anhui state capital. The well-known "Hefei model" of government-guided industrial investment has helped the city develop clusters in integrated circuits, new displays, and new energy vehicles, achieving rapid economic growth. Anhui's policy direction emphasizes further strengthening these emerging industries. Therefore, Anhui's investment in Ningbo Shanshan Co.,Ltd. is likely aimed at building or完善 the local industrial chain. While Anhui hosts整车 enterprises like BYD and Nio, it lacks influential companies in core power battery materials—a gap that Ningbo Shanshan Co.,Ltd. can fill. Analysts believe the acquisition could help Anhui form an integrated "vehicle-battery-material" industrial ecosystem, solidifying its competitive advantage in the new energy vehicle sector. For Ningbo Shanshan Co.,Ltd., deep integration into this regional industrial strategy could significantly enhance its future value and prospects, potentially representing the best possible outcome under the circumstances.
After nearly a year of restructuring, Ningbo Shanshan Co.,Ltd. urgently needs to shed its debt burden. By the end of the third quarter of last year, the company's total liabilities reached 21.968 billion yuan, including 5.293 billion in short-term loans and 6.528 billion in long-term loans, against cash reserves of only 3.15 billion yuan. Although its performance is recovering quickly, debt continues to erode profits.
According to an earnings forecast, Ningbo Shanshan Co.,Ltd. returned to profitability in 2025, with an estimated net profit of 400-600 million yuan. Its anode materials and polarizer businesses are expected to contribute a combined net profit of 900 million to 1.1 billion yuan. This implies a difference of 400-600 million yuan was consumed by financial expenses, losses from investments, and impairments. A successful restructuring and debt resolution could substantially improve the company's profit level.
If acquired by Anhui state capital, Ningbo Shanshan Co.,Ltd. would not only benefit from its own operational recovery but also gain a financially powerful backer. The nearly 5 billion yuan used by Wanwei Group for the direct share acquisition actually originated from Conch Group. In January, Conch Group planned to acquire a 60% stake in Wanwei Group for 4.998 billion yuan in cash, making it the controlling shareholder. Post-restructuring, Conch Group would ultimately gain control of Ningbo Shanshan Co.,Ltd. Unlike some asset-rich but cash-strapped companies, Conch Group has ample liquidity. Its core subsidiary, Conch Cement, recently announced plans to invest 50 billion yuan in wealth management products. As of the end of last year's third quarter, the company held combined cash and tradable financial assets totaling 62.6 billion yuan.
By all accounts, three years after the death of Shanshan system founder Zheng Yonggang, Ningbo Shanshan Co.,Ltd. seems to have found a favorable partnership. The success of this "match" also hinges on the forward-thinking transformations initiated under Zheng's leadership: the cross-over into the anode materials industry over a decade ago and the acquisition of LG's polarizer business several years ago, which were crucial in making Shanshan Group an attractive restructuring target.
As a legendary Zhejiang entrepreneur, Zheng Yonggang transformed a nearly bankrupt garment factory into the "first apparel stock" and eventually a vast capital empire, at one point controlling over 420 enterprises, investing in financial institutions, and holding stakes in more than ten listed companies. He intended for his son, Zheng Ju, to succeed him, but the lack of a timely will led to a control battle with his widow, causing leaks in the vast business edifice. Ultimately, the Shanshan system will pass to outsiders, and the Zheng family is poised to exit completely.
Nevertheless, Ningbo Shanshan Co.,Ltd. continues to move forward. Positioned in booming sectors like new energy vehicles, consumer electronics, and energy storage, the company is well-positioned to start anew. Everything now depends on the approval of the restructuring plan. Ningbo Shanshan Co.,Ltd. has stated that the "Restructuring Investment Agreement" still requires approval from the creditors' meeting and the shareholder group, a ruling by the court, and completion of a经营者集中申报, with final success remaining uncertain.