Ownership transfer plan terminated! Dechang Co., Ltd. stock price hit the daily limit the day before suspension, with an expected net profit to be halved by 2025.

After four trading days of suspension, Dechang Co., Ltd.’s plan to transfer control is officially terminated.

On the evening of April 1, Dechang Co., Ltd. (SH605555) announced that it would terminate a major matter related to the planned partial transfer of the company’s shares, and that the company’s stock would resume trading on April 2. Regarding the reasons for the termination, the company said that it was mainly because the controlling shareholder, the actual controller, and the counterparty—“due to the large number of matters involved, the two sides were unable to reach agreement on certain core terms.”

Image source: Dechang Co., Ltd. announcement

A reporter with the “21st Century Business Herald” noted that just before Dechang Co., Ltd. released its suspension announcement on the evening of March 26, the company’s share price hit the daily limit that day.

The company’s share price hit the daily limit on the day before the suspension

Public information shows that Dechang Co., Ltd. was founded in 2002. It completed a shareholding system restructuring in 2019 and successfully listed on the SSE in 2021.

At present, Dechang Co., Ltd. mainly engages in the R&D and production of motors, carpet cleaning machines, personal care appliances, and home health care appliances. Its products are mainly aimed at the markets in Europe and the United States, and it is one of China’s top ten vacuum cleaner export enterprises.

In addition to its small home appliance business, in 2017, Dechang Co., Ltd. also founded “Dechang Technology,” entering the automotive components segment and focusing on the R&D and production of automotive EPS (electric power steering system) brushless motors and braking motors.

At a 2025 mid-year performance briefing, Dechang Co., Ltd. disclosed that its automotive motors mainly cooperate with Tier1 customers such as Nidec, ZF, JETAGT, and Continental, involving end automakers including BYD, Changan, Li Auto, XPeng, SAIC, Leapmotor, Stellantis, and Tesla.

From the perspective of business mix, the 2025 half-year report shows that the small home appliance business remains Dechang Co., Ltd.’s revenue pillar. In the period, revenue was RMB 1.743 billion, accounting for more than 86% of total revenue. However, compared with the small home appliance business, the growth rate of the company’s automotive motor business is clearly higher.

After the market closed on March 26, Dechang Co., Ltd. announced that it had received notice from the controlling shareholder and the actual controller. Mr. Huang Yuchang, Ms. Zhang Liying, Mr. Huang Shi, and their related parties were in the process of planning a major matter to partially transfer the company shares they hold. The matter may lead to a change in the company’s actual controller. The company’s stock was suspended starting from the opening of trading on the morning of March 27, 2026, and the expected suspension period would not exceed 5 trading days.

However, it is worth noting that just before Dechang Co., Ltd. released its suspension announcement on the evening of March 26, the company’s share price hit the daily limit that day.

Forecast: 2025 net profit to be “cut by half”

Of note is that behind this control-transfer plan, Dechang Co., Ltd.’s fundamentals are also facing pressure.

According to Dechang Co., Ltd.’s 2025 full-year performance forecast, it expects to achieve net profit attributable to shareholders of the parent company of between RMB 160 million and RMB 200 million for 2025, a year-on-year decrease of 61% to 51%; net profit after deducting non-recurring gains and losses is expected to be between RMB 145 million and RMB 185 million, a year-on-year decrease of 63% to 53%.

Image source: Dechang Co., Ltd. announcement

Regarding the change in net profit, Dechang Co., Ltd. explained that due to the impact of international trade policies on its home appliance business, together with intensifying industry competition, leading to falling prices, and the fact that new production capacity has begun production and is still in the ramp-up stage, amortization expense increased year-on-year, and the combined effects impacted gross margin. At the same time, due to fluctuations in the U.S. dollar exchange rate, this period’s exchange gains and losses were about -RMB 18 million, which was about RMB 60 million less than in the same period last year.

As for the automotive parts business, Dechang Co., Ltd. said that in 2025, the relevant business is still maintaining a rapid growth trend. “At present, the global EPS motor market is mainly occupied by international giants represented by Nidec. In recent years, the company has continuously pushed for domestic substitution, with its market share steadily increasing, and is gradually changing the supply-chain pattern in which EPS motors have been led by foreign-funded companies.” Dechang Co., Ltd. said this at a 2025 mid-year performance briefing.

（Source: “21st Century Business Herald”）