Questions are emerging regarding the quality of listed companies after the entry of the "Vital" asset group led by Zhu Shihui.
The recent related-party acquisition by Shanghai Vital Deeptech Co., Ltd. (ASX: 600641) has drawn regulatory attention.
Shanghai Vital Deeptech Co., Ltd. announced its intention to sign an investment agreement with Qingyuan Vital Special Materials Co., Ltd. and Vital Microelectronics, investing 2 billion yuan to acquire a 50.63% stake and gain control of Vital Microelectronics through a capital increase. Following the completion of this capital increase, Vital Microelectronics will become a subsidiary of the company and be included in its consolidated financial statements. This transaction constitutes a related-party transaction but does not amount to a major asset restructuring.
Shanghai Vital Deeptech Co., Ltd. was formerly known as Wanye Enterprises and listed on the Shanghai Stock Exchange main board in 1993. At the end of 2024, Zhu Shihui's "Vital" group formally took control of Wanye Enterprises, after which the company was renamed "Shanghai Vital Deeptech Co., Ltd." Since Zhu Shihui's entry, the company has been continuously engaged in capital operations.
Zhu Shihui started with rare metal materials and now controls the Vital asset group. Through a series of capital operation strategies, he has successively gained control of another listed company and Shanghai Vital Deeptech Co., Ltd. (formerly Wanye Enterprises). This raises the question: has the quality of these listed companies genuinely improved following the Vital group's entry?
Rising Related-Party Transactions and Sharp Decline in Cash
Fundamentally, Shanghai Vital Deeptech Co., Ltd. saw increased revenue but decreased profits in 2025.
The company achieved operating revenue of 1.852 billion yuan in 2025, a year-on-year increase of 218.50%. However, its net profit attributable to shareholders was -127 million yuan, a decrease of 217.72% year-on-year. Its non-GAAP net profit was -174 million yuan, a decrease of 119.00% year-on-year, marking a shift from profit to loss.
Following the Vital group's entry, the company added a bismuth-related materials business in 2025. According to the announcement, the company's 2025 revenue primarily came from the bismuth-related materials business, specialized equipment manufacturing, real estate business, and other operations. The bismuth-related materials business contributed 1.3197759 billion yuan, accounting for 71.27% of operating revenue. Specialized equipment manufacturing contributed 348.3104 million yuan, accounting for 18.81%. The real estate business and other operations contributed 183.7355 million yuan, accounting for 9.92%.
However, behind the company's surging revenue, related-party customers and suppliers have emerged. During the 2025 reporting period, sales to the top five customers and purchases from the top five suppliers amounted to 716 million yuan and 3.151 billion yuan, accounting for 39% and 60% respectively. Related-party sales and purchases were 320 million yuan and 789 million yuan respectively. The company purchased materials from 46 related parties and sold goods to 16 related parties. Notably, some related customers and suppliers overlapped, including Guangdong Vital Advanced Materials Co., Ltd. and VITAL MATERIALS CO., LIMITED.
Simultaneously, it has been noted that since the Vital group took control, the book cash of Shanghai Vital Deeptech Co., Ltd. has sharply declined. Data shows that before the Vital group assumed control, the company's book cash was nearly 3.7 billion yuan. This figure plummeted to 1.642 billion yuan in 2025 and further decreased to 1.455 billion yuan in the first quarter of 2026.
It has also been observed that the company's prepayments and inventory are surging. At the end of the 2025 reporting period, the book value of inventory was 4.528 billion yuan, a year-on-year increase of 225.13%. The book value of prepayments was 358 million yuan, a year-on-year increase of 634.6%. Against the backdrop of a significant increase in related-party customers and suppliers, does this surge in prepayments and inventory warrant vigilance regarding risks such as fund misappropriation? Does the commercial rationale behind this need re-evaluation?
It is noteworthy that regulators have raised a series of questions regarding the aforementioned related-party transactions and their rationale. In response, the company's annual audit institution stated that it believes the significant revenue growth and the shift to a net loss for Shanghai Vital Deeptech Co., Ltd. in 2025 have commercial rationality. It found no unreasonable significant differences in gross margins under different sales models for the bismuth-related materials business, deemed the trade business necessary, and considered the related-party transactions to have commercial substance and fair pricing.
Questions Over Independence of Last-Minute Auditor Change
Regarding the financial anomalies in Shanghai Vital Deeptech Co., Ltd.'s annual report, the company issued a response announcement on July 11. Notably, there is an overlap between the last-minute changed auditor and the company's financial executives.
On November 14, 2024, Shanghai Vital Deeptech Co., Ltd. announced changes to its senior management. The company held a temporary meeting of the eleventh board of directors on December 3, 2024, and reviewed and passed the "Proposal on Appointing the Company's Chief Financial Officer." The board agreed to appoint Ms. Ye Mengmeng as the company's Chief Financial Officer.
According to the announcement, Ms. Ye Mengmeng, born in February 1992, is a Chinese citizen with no permanent residency abroad. She graduated from Yangtze University with a bachelor's degree. Her previous roles include project manager at the Shenzhen branch of Dahua Certified Public Accountants and project manager at the Shenzhen branch of ZS CPA Limited. She also served as a senior project manager at Zhengdan Zhiyuan (Shenzhen) Certified Public Accountants.
In November 2025, as the annual audit approached, the company abruptly changed its audit firm. On November 14, 2025, the company announced the change of accounting firm. It is noteworthy that the newly appointed audit firm, Zhengdan Zhiyuan, is precisely where the company's CFO, Ms. Ye, previously worked.
The company's announcement stated that, considering that the previous auditor had served the company for many consecutive years and in accordance with relevant requirements to maintain the prudence, independence, and objectivity of the audit work, and after comprehensive consideration of the company's business development and future audit needs, the company, following full communication, competitive negotiation, and a proposal from the board audit committee, intended to appoint Zhengdan Zhiyuan as the audit firm for the 2025 financial report and internal control audit. The company stated there were no disagreements with the previous auditor regarding work arrangements, fees, or opinions.
Corporate Governance Issues Exposed at Another Vital-Linked Company
After the Vital group took control of another listed company, although its revenue has grown in recent years, profitability seems challenging, with its non-GAAP net profit remaining in a loss state for multiple years.
Beyond weak fundamentals, this other company has also experienced issues such as fund misappropriation and smuggling crimes.
On June 25, the Guangzhou Intermediate People's Court of Guangdong Province issued a first-instance public verdict in the case of defendant Anhui Guangzhi Technology Co., Ltd. and individuals Liu Liu, Cao Yan, and Zhu Bangfu smuggling goods prohibited from import and export by the state. Anhui Guangzhi Technology Co., Ltd. is a key subsidiary of the other listed company. In 2025, this subsidiary generated revenue exceeding 1.8 billion yuan with a total profit of over 100 million yuan.
The court sentenced Anhui Guangzhi Technology Co., Ltd. to a fine of 8 million yuan for the crime of smuggling goods prohibited from import and export by the state. The directly responsible person in charge, Liu Liu, was sentenced to ten years in prison and a fine of 1 million yuan. Cao Yan was sentenced to eight years in prison and a fine of 800,000 yuan. Other directly responsible personnel, Zhu Bangfu, were sentenced to three years in prison, suspended for five years, and a fine of 200,000 yuan. The trial found that from August 2023 to December 2024, Anhui Guangzhi Technology Co., Ltd. violated national export control regulations by smuggling 9,377 kilograms of controlled items, germanium and gallium, valued at over 56.76 million yuan out of the country through false declaration of product names and obtaining dual-use item export licenses by deception. The company's legal representative Liu Liu, sales manager Cao Yan, and customs declarant Zhu Bangfu participated in planning and implementing the crime. The Guangzhou Intermediate People's Court held that the actions of the defendant company and the individuals constituted the crime of smuggling goods prohibited from import and export by the state. The sentences were determined based on the facts, nature, circumstances, roles, expressions of remorse, and degree of harm to society.
On January 14, 2021, the other listed company announced receiving an administrative supervision decision from the Heilongjiang Regulatory Bureau. The main reason was that its controlled subsidiary, Anhui Guangzhi, repeatedly provided funds to the actual controller and enterprises under its control through third parties, accumulating to 831 million yuan, constituting non-operating fund occupation.
It was reported that since June 4, 2020, the own funds of Anhui Guangzhi, the controlled subsidiary, were repeatedly paid indirectly to related enterprises controlled by the company's actual controller through intermediate service providers in the form of prepaid procurement payments, for the purchase of equipment and engineering materials by the related enterprises. Anhui Guangzhi's own funds were also repeatedly paid to related enterprises controlled by the company's actual controller through intermediate service providers for purchasing raw materials. Part of these funds flowed back to the related enterprises controlled by the actual controller.
Comments