Leading Electric's 3.5 Billion Yuan Private Placement Sparks Doubts: Controlling Shareholder Acquires at a Discount, Another Major Shareholder Continues Large-Scale Selling

Recently, Shanghai Pilot Baseji Electronics Technology Co., Ltd. (600641.SH, hereinafter referred to as “Pilot Baseji”) announced that it plans to issue no more than 236 million shares to its actual controller, Zhu Shihui-controlled Pilot Technology Group Co., Ltd. (hereinafter referred to as “Pilot Technology”) via a targeted private placement, raising no more than RMB 3.51 billion. All proceeds will be used for semiconductor-related businesses and the upgrade project for bismuth material business.

According to the preliminary plan, the issue price for this additional share issuance has been set at RMB 14.90 per share, not lower than 80% of the average trading price of the company’s shares over the 20 trading days prior to the pricing benchmark date. Based on the stock price on the announcement date of about RMB 18.7, the discount amounts to approximately 20%. The subscription entity, Pilot Technology, has committed that the shares it subscribes for will not be transferred within 36 months from the date of completion of the issuance.

What’s even more worth pondering is the timing of the shareholders’ share sales. Just before the announcement of the additional share issuance plan, the company’s second-largest shareholder, SansLin Wanye (Shanghai) Enterprise Group Co., Ltd., had just completed a round of share reductions. The announcement shows that between September 16, 2025 and December 10, it reduced 15.8622 million shares through centralized bidding and block trades, raising RMB 276 million, with the share sale price ranging from RMB 15.00 to RMB 23.78 per share. On February 13, 2026, SansLin Wanye again announced a plan to reduce its holdings by no more than 19.11 million shares, accounting for 2.05% of the company’s total shares.

On one side, a financial investor is reducing holdings at a high level; on the other side, the actual controller is increasing holdings at a low price. Between this one reduction and one increase, the company’s shareholding structure has undergone a subtle change. After the completion of the additional share issuance, the actual controller, Zhu Shihui, through Pilot Technology and its concerted-action party Pilot Huixin, will increase its combined shareholding ratio from 24.27% to 39.57%, with control over the company greatly strengthened.

The financial situation of Pilot Baseji makes this additional share issuance proposal seem even more perplexing. The financial report for the third quarter of 2025 shows that the company’s cash and cash equivalents amounted to RMB 1.964 billion, and its trading financial assets were RMB 46.36 million. The asset-liability ratio was only 28.72%, far below the industry average for semiconductors.

Pilot Baseji’s predecessor was Wanye Enterprises, a listed company whose primary business was real estate. In 2018, the company acquired Kaisetong Semiconductor and began transitioning toward the semiconductor equipment sector. In November 2024, Zhu Shihui became the actual controller. In 2025, the company officially changed its name to “Pilot Baseji,” marking that the transformation has entered a new stage.

The road of transformation is full of challenges. In the first three quarters of 2025, the company achieved operating revenue of RMB 1.069 billion, up 247.43% year over year; the net profit attributable to shareholders was RMB 18.67 million, up 158.93%. Superficially, performance growth appears swift, but the net profit after deducting non-recurring items was negative RMB 24.01 million, indicating that the main business is still loss-making. The company expects that its net profit attributable to shareholders for full-year 2025 will be between negative RMB 138 million and negative RMB 92 million.

In terms of business structure, the company is in a transitional period between the old and the new. In the first half of 2025, the bismuth materials business generated revenue of RMB 525.2 million, accounting for 75.14%; the real estate business revenue was RMB 101.8 million, accounting for 14.57%; and the dedicated equipment manufacturing business (semiconductor equipment) revenue was RMB 71.12 million, accounting for 10.17%. Although the bismuth materials business is growing quickly, its gross margin is only 25.23%.

The company’s inventory problem is particularly prominent. By the end of the third quarter of 2025, inventory reached RMB 4.218 billion, accounting for 35% of total assets, a substantial year-on-year increase. The net cash flow from operating activities is also worrying, at negative RMB 3.938 billion, indicating insufficient “cash-generating” capability from its main business.

Note: This article was created with the help of AI tools to collect and organize market data and industry information.

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