Trading resumes with a limit-down! 605555, the ownership transfer plan hits a snag

On April 2, Dechang Motor (605555.SH) resumed trading, but its first day was immediately dealt a heavy blow. After the stock opened sharply lower, it quickly hit the daily limit-down. By the close, the stock was down 9.64%.

The direct trigger for the plunge was a notice Dechang Motor released on the evening of April 1—its controlling shareholder and actual controller, the Huang Yuchang family, terminated plans to pursue a major matter. The original intended share transfer plan could have led to a change in the company’s control, but it fell through.

Looking back at the timeline, on March 26 after market close, Dechang Motor issued a suspension notice, saying it had received notice from the controlling shareholder and actual controller that Huang Yuchang, Zhang Liying, Huang Shi, and their related parties were planning a major matter to partially transfer the company shares they held. The matter could lead to a change in the company’s actual controller. The company’s stock has been suspended from trading since March 27, and the expected suspension period is no more than 5 trading days.

Notably, right before Dechang shares announced the suspension notice on the evening of March 26, the company’s stock hit the daily limit for an increase that day.

Four trading days after the suspension, on the evening of April 1, Dechang shares released a termination announcement. The given reason was: “There are many matters involved, and the two sides were unable to reach agreement on certain key terms.”

Dechang shares was founded in 2002 by Huang Yuchang and his wife, Zhang Liying. It is a typical family business. It listed on the Shanghai Stock Exchange in October 2021. As of the third-quarter report of 2025, the Huang family collectively held 62.43% of the company’s equity. Among them, Huang Yuchang held 24.36%, Zhang Liying held 11.99%, and their son Huang Shi held 6%.

Members of the Huang family hold key management roles in the company: Huang Yuchang serves as Chairman and General Manager, Zhang Liying serves as a Director, and Huang Shi serves as a Director and Deputy General Manager.

This planned change of control means the Huang family intends to hand over control of the business they have run for 24 years—and behind that are the performance challenges Dechang shares faces.

On January 12, Dechang shares released its 2025 annual performance forecast, expecting full-year attributable net profit of 160 million to 200 million yuan, a year-over-year decline of 61% to 51%. Non-recurring profit and loss excluded (after deducting) net profit was expected to be 145 million to 185 million yuan, a year-over-year decrease of 63% to 53%.

Based on the performance forecast, this would be the worst results Dechang shares has delivered since listing. In previous years, net profit had been basically stable in the 300 million to 400 million yuan range.

Behind the “cut in half” in performance are three pressures Dechang shares is facing:

First, the vacuum cleaner business—the company’s revenue pillar—has hit a bottleneck. In the first half of 2025, Dechang shares’ vacuum cleaner business generated revenue of 932 million yuan for the period, down 3.62% year over year. Moreover, in recent years, that business’s gross margin has been steadily declining: in 2024, the gross margin for this business was 15.67%, down 1.43 percentage points year over year.

Second, in 2025, driven by changes in international trade policies and intensifying industry competition, the prices of small home appliances have continued to fall, and gross margins have been continually compressed. At the same time, Dechang shares’ new manufacturing capacity in Thailand—an annual production of 5 million units of home appliances—remains in the ramp-up phase. Depreciation and amortization expenses have increased significantly, further eroding profits.

For Dechang shares, whose technical barriers in the small home appliance sector were not high to begin with, losing its cost advantage and being squeezed from both domestic peers and Southeast Asian manufacturers has made its room to survive increasingly narrow.

Third, the auto parts business, which Dechang shares has positioned as a “strategic business,” is still in the investment phase. In 2024, the business’s revenue grew by 104.54%, but it is still constrained by insufficient technical reserves and customer resources in the field of automotive motors, and therefore has not yet been able to support performance growth.

Dechang shares’ limit-down after resuming trading is the result of the market voting with its feet. It is also a “vote of trust” in the company’s future. As for whether the Huang Yuchang family will seek another equity transfer afterward, and whether Dechang shares can shake off the current pressures and return to growth, we shall wait and see.

Source: Jingyingren.com

Editor: Cao Rong

Proofreader: Zhi Yan