In the eyes of many, ST stocks are often seen as "problematic stocks" with poor performance and stagnant share prices. However, *ST Songfa seems to defy this stereotype.
As of November 25, *ST Songfa's market capitalization stood at 65.04 billion yuan, with a year-to-date gain of 68% and an astonishing 280% surge since 2024.
This explosive performance in the secondary market is closely tied to its dramatic financial turnaround. Starting from its 2025 interim report, *ST Songfa reversed its year-on-year losses. In the first three quarters of 2025, the company reported revenue of 11.759 billion yuan and net profit attributable to shareholders of 1.271 billion yuan, far surpassing its full-year performance in 2024.
Back in 2024, *ST Songfa's revenue was only 275 million yuan, with a net loss of 76.64 million yuan and an adjusted net loss of 78.34 million yuan. Due to its revenue from non-core businesses falling below 300 million yuan and negative adjusted net profit, the company was slapped with a delisting risk warning, and its stock abbreviation changed from "Songfa Shares" to "*ST Songfa."
Yet, in less than a year, *ST Songfa transformed from an underperforming stock to a market darling, thanks to a strategic capital maneuver orchestrated by Jiangsu's richest couple, Chen Jianhua and Fan Hongwei. Their bold move not only secured the company's listing status but also achieved a "three-in-one" strategic layout—expanding industrial presence, consolidating capital influence, and grooming the next generation.
**From Ceramics to Shipbuilding: A Financial and Market Rebound** In October 2025, the Hurun Rich List ranked Chen Jianhua and Fan Hongwei 13th with a fortune of 190 billion yuan, retaining their title as Jiangsu's wealthiest. Their wealth primarily stems from two A-listed "Hengli Group" companies: Hengli Petrochemical, with a market cap nearing 130 billion yuan, and *ST Songfa, which pivoted to shipbuilding.
Many initially knew *ST Songfa for its ceramics business. Listed on the Shanghai Stock Exchange in March 2015 as the "first daily-use ceramics stock," its products were exported to over 50 countries and regions, serving clients like Marriott, Sheraton, Hilton, Wanda, and Nestlé (China).
However, post-listing performance was volatile. Revenue peaked at 591 million yuan in 2018 but slumped below 300 million yuan annually from 2022 onward, hitting 275 million yuan in 2024. Profitability was even worse, with net profit peaking at 45.75 million yuan in 2017 before sliding into losses. From 2021 to 2024, cumulative losses reached 670 million yuan.
After its 2024 annual report revealed negative adjusted net profit and sub-300-million-yuan revenue from core operations, *ST Songfa was branded with the *ST label.
At this critical juncture, Chen and Fan executed a "ceramics-for-ships" asset swap. In October 2024, *ST Songfa launched a major restructuring, shedding its ceramics assets and acquiring Hengli Heavy Industry, a shipbuilding and high-end equipment firm. By May 2025, the restructuring was complete, turning *ST Songfa into China's "first private shipbuilding stock."
The impact was immediate: 2025 Q1-Q3 revenue soared to 11.759 billion yuan (vs. 275 million yuan in 2024), while net profit skyrocketed to 1.271 billion yuan from a loss. On November 25, its market cap hit 65.04 billion yuan, making it the highest-valued ST stock on the A-share market.
**When Will *ST Songfa Shed Its *ST Label?** The key hurdle isn't performance—Hengli Heavy Industry's earnings already meet financial criteria. Per regulatory rules, post-restructuring delisting warnings require five conditions, including three years of pre-restructuring operations under the same management.
Hengli Heavy Industry was founded in July 2022. By its 2025 annual report disclosure in 2026, it will meet the tenure requirement. If auditors confirm compliance, *ST Songfa can apply to remove the warning.
**A Repeat Play: The Strategic Masterstroke** Chen and Fan's capital moves with *ST Songfa weren't impulsive but mirrored their earlier success with Hengli Petrochemical's backdoor listing via Dalian Rubber & Plastics in 2015.
Yet, unlike Hengli Petrochemical's swift execution, *ST Songfa's restructuring took six years after the 2018 ownership transfer. Why the delay? Timing and asset readiness were key.
In 2018, *ST Songfa was still profitable (37.63 million yuan net profit), avoiding delisting risks and reducing restructuring urgency. Meanwhile, target shipbuilding assets weren't ready until July 2022, when Hengli Group founded Hengli Heavy Industry and spent 2.11 billion yuan acquiring STX Dalian's dormant assets.
This six-year plan achieved three strategic wins: 1. **Capital Expansion**: The "Hengli Group" gained a dedicated shipbuilding platform, leveraging capital markets for funding. 2. **Industrial Synergy**: Hengli Petrochemical's oil and chemical shipping needs align with in-house shipbuilding, cutting logistics costs while supplying ship materials like coatings. 3. **Succession Planning**: In August 2025, Chen Hanlun, the 2001-born son of Chen Jianhua, became *ST Songfa's director and CEO, marking a rare "Gen-Z" leadership in A-shares and signaling a family succession trial.
*ST Songfa's metamorphosis—from a struggling ceramics firm to a shipbuilding powerhouse—showcases the Jiangsu tycoon's capital prowess. With survival secured, synergies activated, and the next generation at the helm, this "Hengli Group" pawn is firmly placed. Whether its comeback story continues remains to be seen.
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