Termination of major planning matters, Dechang Shares hit the daily limit down! 2025 net profit expected to be "halved"

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（Source: V View Financial Reports）

On April 2nd, Ningbo Dechang Motor Co., Ltd. (hereinafter referred to as “Dechang Co.”) hit the daily limit down during trading after resuming trading, currently down 9.22% at 15.26 yuan per share, with a total market value of nearly 7.4 billion yuan.

Source: Tonghuashun

Termination of Major Matters Planning

On April 1st, Dechang Co. announced that its controlling shareholder and actual controller have terminated the planning of major matters, and the company resumed trading on April 2nd.

Dechang Co. mentioned that after market close on March 26, 2026, the company received notice from its controlling shareholder and actual controller that Huang Yuchang, Zhang Liying, Huang Shi, and their related parties are planning to transfer part of their holdings in the company, which may lead to a change in the company’s actual controller. To ensure fair information disclosure, protect investors’ interests, and avoid abnormal fluctuations in the company’s stock price, the company applied to the Shanghai Stock Exchange, and as a result, its stock was suspended from trading starting the morning of March 27, 2026 (Friday).

Dechang Co. stated that during the suspension period, the company’s controlling shareholder, actual controller, and the counterparty had extensive discussions, communication, and negotiations regarding this transaction. However, due to the involvement of multiple issues and some core terms not reaching consensus, after carefully listening to all parties’ opinions and negotiating with the counterparty, and in order to genuinely safeguard the interests of all shareholders and the company, the two sides decided to terminate the planning of this major matter based on prudence.

Dechang Co. indicated that the company’s current operations are normal, and the termination of this major matter will not have a significant adverse impact on its operating performance and financial condition.

Past announcements from Dechang Co. show that Huang Yuchang is the controlling shareholder and actual controller of Dechang Co., and has served as an executive director of Dechang Limited, and since December 2019, as chairman and general manager of Dechang Co. Zhang Liying is the controlling shareholder and actual controller, and has served as a supervisor of Dechang Limited, and since December 2019, as a director of Dechang Co. Huang Shi is the controlling shareholder and actual controller, and has served as a director and deputy general manager since December 2019. Huang Shi is the son of Huang Yuchang and Zhang Liying.

Projected net profit halved in 2025

Information from the company’s official website shows that Dechang Co. was established in January 2002, and is mainly engaged in the research, development, and production of motors, carpet cleaning machines, personal care appliances, and household health care appliances, with products primarily targeting European and American markets. Dechang Co. was listed on the Shanghai Stock Exchange in 2021.

Dechang Co. states that it adheres to the development strategy of “focusing on vacuum cleaners as the core business, diversified small home appliances as growth businesses, and EPS motors as strategic businesses.” In 2017, the company founded “Dechang Technology,” officially entering the automotive parts field, engaged in the research and development of automotive EPS brushless motors and brake motors, aiming to become a domestically leading enterprise with international competitiveness in the EPS motor industry.

Dechang Co.'s latest earnings forecast shows that, based on preliminary calculations by the finance department, the net profit attributable to the parent company’s owners for 2025 is expected to be between 160 million and 200 million yuan, a decrease of 250.83 million to 210.83 million yuan compared to the same period last year, a year-on-year decrease of 61% to 51%. The net profit attributable to the parent company’s owners after deducting non-recurring gains and losses is expected to be between 145.36 million and 185.36 million yuan, a decrease of 247.89 million to 207.89 million yuan compared to the same period last year, a year-on-year decrease of 63% to 53%.

Regarding the main reasons for the performance decline, Dechang Co. states that the company’s automotive parts business will still maintain rapid growth in 2025. The home appliance business has been affected by international trade policies, combined with increasing industry competition, leading to falling prices, and new production capacity starting operation, which is still in the ramp-up stage, resulting in increased amortization expenses, which collectively impacted gross profit margin; at the same time, due to fluctuations in the US dollar exchange rate, the company’s foreign exchange gains/losses for this period are about -18 million yuan, a decrease of about 60 million yuan compared to the same period last year.

(The views expressed herein are for reference only and do not constitute investment advice. Investment involves risks; please proceed with caution. )

Cover image and introductory graphic source: AI-generated graphics

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