A board election at Ningbo Xianfeng New Material Co.,Ltd. (SZ: 300163), which had been delayed for months, officially commenced in July.
Given the company's dispersed shareholding structure and its status of having no controlling shareholder or actual controller, this board election is viewed by some investors as a potential window for a change in control of the listed firm.
Following the disclosure of the election announcement on July 2, the company received temporary proposals from shareholder Chen Linqing and another shareholder. Chen nominated two non-independent directors and one independent director, while the other shareholder nominated one independent director.
According to the company's announcement, the new board of directors will maintain the previous structure of three non-independent directors and two independent directors.
However, on the evening of July 7, the company announced that due to insufficient documentation submitted by the two shareholders and a failure to supplement the missing content, the board resolved not to submit the shareholders' temporary proposals for consideration at the general meeting.
The company stated that its board was unable to provide shareholders with all the information or explanations necessary to make a reasonable judgment on the matter.
Chen Linqing's side recently indicated that there were disagreements over procedures and documentation requirements regarding the rejection of the proposal.
It has been learned that the two non-independent director candidates nominated by Chen are Zhang Zheyu, CEO of the commercial aerospace star company Beijing Guidao Chenguang Technology Co., Ltd., and its financial head, Lü Rui.
According to the announcement, Chen Linqing holds over 1% of the company's shares.
In June 2025, another listed company disclosed an investment of 110 million yuan in Guidao Chenguang. In August of the same year, Zhang Zheyu assumed the role of co-president at that company. In January 2026, that company invested a further 74.98 million yuan in Guidao Chenguang. During this period, that company's stock price surged significantly, with a maximum increase exceeding 300%.
Dispute Over Nomination Materials
Regarding Chen Linqing's temporary proposal, the company identified several main issues: the nominated director candidates did not provide undergraduate degree certificates and verification reports, nor did the independent director candidate, who is the executive dean of a research institute, provide written proof of the university's consent for his external part-time role.
Chen's side believes there are many inconsistencies in their views on these matters.
Firstly, regarding the candidates' educational background. Chen's side believes they have provided materials matching the highest degree listed in the candidates' resumes. They argue that providing undergraduate credentials is not a mandatory requirement based on relevant regulations.
It was noted that while the company's email requested educational background certificates and verification reports, there was no explicit mandatory requirement in other publicly available documents for candidates with postgraduate degrees to provide undergraduate materials.
On July 8, it was learned from several company secretaries and securities representatives of listed companies that there is no uniform standard for the educational materials required for directors. Generally, proof of the highest degree suffices, though some companies are more cautious and require proof of all degrees from undergraduate level onwards.
Secondly, regarding the accounting qualification proof for the independent director candidate.
The company's materials state that an independent director candidate nominated as an accounting professional should possess rich accounting knowledge and experience, meeting at least one of several conditions, such as holding a CPA qualification, having a senior professional title or doctorate in accounting, or having over five years of full-time experience in a relevant role with a senior title in economic management.
Chen's representative stated they provided the independent director candidate's doctoral degree certificate in accounting.
Finally, regarding the lack of written university consent for the independent director candidate's external role, Chen's representative argued that the relevant regulations apply to universities directly under the Ministry of Education, and the research institute in question is an academic unit jointly established by a university and a local government without administrative status. The candidate, Wang Ruihua, does not hold an administrative position at the university and already serves as an independent director for two other listed companies, which did not require such documentation.
Chen's representative expressed that while they understood the company's questions, they wished for communication and an opportunity to explain or supplement materials, criticizing the very short timeframe given for supplementation.
Email correspondence shows the company's staff replied to Chen on the morning of July 7, requesting a comprehensive review and supplementation of all required proof documents by 5:00 PM that day.
Chen's representative believed the company's request for supplementary materials was unclear and lacked specific guidance.
On the afternoon of July 7, Chen's representative called the company to discuss the specific material issues and the short supplementation period. The call ended with the representative stating they had reported the matter to regulators.
Chen's side attempted to send supplementary materials by email and courier in the evening, but the company reportedly refused to accept the courier packages.
Rationale Behind Nominating Guidao Chenguang Executives
Chen Linqing made significant purchases of the company's shares after the company received a pre-notice of regulatory penalty.
In mid-May 2026, the company received a pre-notice of administrative penalty from the local regulatory bureau for long-term concealment of key details related to a change of control between 2018 and 2024. On July 8, the company received the final penalty decision.
Chen's representative stated that based on the disclosed regulatory information, Chen judged the company itself had no particularly severe issues and thus no other latent risks. Having some research background in sunshade fabrics and having followed the company for a long time, Chen saw an opportunity to increase his stake given the lack of a controlling shareholder and the dispersed ownership. He also aimed to nominate director candidates to potentially participate in corporate governance.
It is notable that the two nominated non-independent directors are both senior executives of Guidao Chenguang. Zhang Zheyu is its legal representative and CEO, while Lü Rui is its financial head.
According to Guidao Chenguang's official account, the company focuses on space computing power and is a hard-tech company still in the engineering verification phase, founded in late 2024.
In June 2026, Guidao Chenguang completed a new round of financing, its third announced within three months, with investors including several prominent funds.
Regarding the reason for nominating these two executives, Chen's representative stated that Chen is interested in the commercial aerospace sector and met Zhang and Lü at a corporate forum, engaging in in-depth discussions. Chen felt that if involved in the company's governance, his own energy might be insufficient, hence the thought of nominating Zhang and Lü, who expressed interest. While commercial aerospace is not directly related to sunshade materials, it would not preclude future integration of capacities or personnel, nor retaining the original business while introducing new resources.
A person close to Guidao Chenguang corroborated this, stating the nominated individuals have long been engaged in relevant work, and while the company's financials and fundamentals are generally sound, there are corporate governance issues. The nominees wish to participate, believing the company could develop better with optimized governance.
This person also noted that the company's current materials sector is relatively traditional, with a low proportion of R&D personnel and very few holding postgraduate degrees. With national encouragement for developing new quality productive forces, the company's business could see significant improvement in technology and products with a more professional team.
Hoping for a Normal Vote
Regarding the shareholder nomination, a senior industry insider analyzed that the company's highly dispersed shareholding indeed creates the possibility of a shareholder attempting to seek control.
The company's email reply to Chen on July 7 also pointed out the need to understand any concerted action relationships, requesting a specific statement from the shareholder on such relationships and shareholding details.
On July 8, Chen's representative stated that Chen had provided a declaration to the company stating no concerted action relationship exists. Chen is uncertain about the election outcome but hopes at least for a normal vote at the meeting. Gaining some board seats would be positive, but from an investment perspective, there would not be much loss otherwise.
On July 9, a person close to Guidao Chenguang also stated that Chen's shareholding ratio does not give him the ability to seize control, as he is not even a 5% shareholder. The hope is more that minority investors will recognize the experience and capability of the nominated directors. If elected, they would intervene from a management perspective to help stabilize the main business and improve fundamentals.
Besides his role at Guidao Chenguang, Zhang Zheyu also serves as co-president of the other listed company that invested in Guidao Chenguang, whose stock price surged in late 2025 amid the "commercial aerospace" concept hype.
Whether internal executives of the fast-developing Guidao Chenguang have the bandwidth to hold positions at multiple external companies remains an open question. A person close to Zhang Zheyu stated that Zhang himself assesses he has sufficient energy, as Guidao Chenguang's management team has scaled, allowing him to think about and coordinate governance at other companies in a director capacity.
Chen's representative added that Zhang Zheyu is indeed a talent in commercial aerospace and an excellent corporate manager. If he can reasonably allocate energy to help the listed company consolidate its main business and improve fundamentals, it would be beneficial for both the company and its shareholders.
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