On the evening of December 7, 2025, Shanghai Guao Electronic Technology Co., Ltd. (300551), a smart financial equipment supplier, issued an unexpected announcement regarding a potential change in its actual controller. The company's shares will be suspended from trading starting December 8, with the suspension expected to last no more than two trading days.
Chen Chongjun, the founder of Shanghai Guao, has seen his stake in the company drop from 22.72% at the beginning of 2025 to 19.91%. As of October 2025, all 67.6935 million shares he holds have been judicially frozen, with 83.19% (approximately 56.31 million shares) pledged as collateral.
Additionally, these shares have been subject to cumulative alternate freezes totaling about 229 million shares, far exceeding his actual holdings. This situation stems from Chen's personal debt crisis, which has led to multiple judicial auctions of his company shares since 2023.
Chen has also been involved in several regulatory violations. Records show that in March 2024, he received a warning letter for improper share reductions. In May, he was arrested by Qingdao police on suspicion of market manipulation. By November, he faced penalties from the Shanghai Securities Regulatory Bureau for consecutive years of disclosure violations by the company.
Beyond its controller's troubles, Shanghai Guao's financial performance has been dismal.
For the first three quarters of 2025, revenue plummeted 49.58% year-on-year to just 109 million yuan, while net losses attributable to shareholders reached 164 million yuan—marking the sixth consecutive year in the red. Operating cash flow turned negative at -59.659 million yuan, compared to 7.191 million yuan in the same period last year. Gross margins collapsed from 51.51% in 2024 to just 1.85%, highlighting severe profitability pressures.
The decline is primarily attributed to shrinking demand for traditional financial equipment due to industry bidding policies, particularly for cash-handling machines. The company attempted to pivot into solar photovoltaics and integrated circuits, but these ambitious cross-industry moves drew market skepticism. Previous acquisitions also underperformed, failing to meet earnings targets.
Amid these challenges, a change in control appears to be the only viable path forward.
A successful transition to a new controlling shareholder with strong resource integration capabilities could accelerate Shanghai Guao's transformation into a "fintech + advanced manufacturing" dual-drive business. However, if the new investor lacks sufficient strength, the company risks entering a vicious cycle of management instability and worsening performance.
As of December 5, Shanghai Guao's closing price of 13.7 yuan per share represented a significant recovery from its yearly low of 7.35 yuan. With the trading suspension approaching, this debt-driven battle for control may reshape the future of this smart financial enterprise.
Note: This article incorporates AI-generated content. The views expressed do not constitute investment advice. Market risks exist; investors should exercise caution.
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