A stock with the ST label reaching a market capitalization of 110 billion yuan—have you ever seen such a thing? For many investors, ST stocks are synonymous with poor performance, low share prices, and struggling on the brink of delisting, let alone boasting a market cap in the hundreds of billions. However, in the A-share market, there is indeed one such counterintuitive company called *ST Songfa.

At the market close on March 20, *ST Songfa's market capitalization stood at 114.2 billion yuan. Since the start of 2025, its stock has surged by 196%, and since 2024, the increase has been as high as 580%.

Even more impressive is the company's financial performance. In 2025, *ST Songfa reported revenue of 21.639 billion yuan, a year-on-year increase of 274.95%, and a net profit attributable to shareholders of 2.655 billion yuan, soaring 1083.05% compared to the previous year.

Such outstanding results, coupled with a market cap in the hundreds of billions, seem completely at odds with the "ST" designation. Many are left wondering: how did *ST Songfa end up with the ST label in the first place? How did it achieve such a remarkable turnaround? And when will it officially remove this "label"?

Behind this transformation lies a major capital maneuver orchestrated by Jiangsu's wealthiest individual. In this strategic play, what appeared to be a "delayed" move ultimately resulted in a massive victory.

From "Ceramics Shell" to "Top Private Shipbuilder": The Triple Comeback of *ST Songfa

*ST Songfa's full name is Guangdong Songfa Ceramics Co., Ltd. As the name suggests, the company started in the ceramics industry. In March 2015, it listed on the Shanghai Stock Exchange, becoming the "first listed daily-use ceramics company" on the A-share market, with its products exported to over 50 countries and regions at the time.

In its listing year, the company reported revenue of 291 million yuan and a net profit of 36.8865 million yuan. However, its performance became highly volatile in subsequent years. By 2024, revenue had dropped to 275 million yuan, lower than the listing year, and the net profit attributable to shareholders showed a loss of 76.6424 million yuan.

In April 2025, after releasing its 2024 annual report, *ST Songfa was labeled with *ST (delisting risk warning) because its net profit—whether before or after non-recurring items—was negative, and its revenue after excluding non-core business income and non-substantive transactions fell below 300 million yuan.

Just half a year before receiving the ST designation, a pivotal restructuring began. In October 2024, *ST Songfa initiated a major asset reorganization, planning to divest all its original ceramics-related assets and inject a 100% equity stake in Hengli Heavy Industry, a company focused on the research, development, production, and sales of ships and high-end equipment. By May 2025, the reorganization was completed, transforming *ST Songfa into the "first privately-owned shipbuilding enterprise" in China.

The injected asset, Hengli Heavy Industry, is a formidable player. In 2025, it secured orders for 115 vessels, with a total contract value exceeding 100 billion yuan. According to data from an international shipping network, measured by deadweight tonnage, Hengli Heavy Industry's new orders ranked second in China and second globally in 2025.

Hengli Heavy Industry is a core asset under the control of Jiangsu's richest couple, Chen Jianhua and Fan Hongwei, and serves as a key segment of Hengli Group's strategic focus on high-end equipment manufacturing and the shipbuilding industry. Hengli Group reported total revenue of 899 billion yuan in 2025 and currently ranks 81st on the Fortune Global 500, with business interests spanning oil refining, new materials, and high-end manufacturing.

Bolstered by Hengli Heavy Industry, *ST Songfa achieved a dramatic financial turnaround in 2025, with revenue soaring to 21.639 billion yuan—a 274.95% increase—and net profit attributable to shareholders jumping to 2.655 billion yuan, up 1083.05% year-on-year.

It is worth noting that the 2025 growth figures are calculated based on restated 2024 financial data. If compared against the original 2024 figures, the increase would be even more staggering.

Alongside its financial recovery, *ST Songfa also experienced a powerful rally in the secondary market. By the close on March 20, its market capitalization had reached 114.2 billion yuan.

Thus, *ST Songfa accomplished a triple comeback—in performance, share price, and growth prospects.

This fundamental improvement has given the company confidence to apply for the removal of its ST status. On March 9, *ST Songfa announced that the conditions leading to the delisting risk warning had been eliminated and that it had submitted an application to the Shanghai Stock Exchange to撤销 the ST designation. According to regulations, the exchange will decide whether to approve the request within 15 trading days.

This transformation from a "ceramics shell company" to a shipbuilding giant worth hundreds of billions has not only reshaped *ST Songfa's destiny but also strengthened the wealth portfolio of its ultimate controllers, the couple Chen Jianhua and Fan Hongwei.

According to the 2026 Hurun Global Rich List, the couple's wealth reached 250 billion yuan, an increase of 120 billion yuan over the year, firmly securing their position as Jiangsu's wealthiest individuals.

Victory for the Latecomer: Strategic Considerations in Capital and Industry

The core driver behind the couple's wealth expansion stems from a classic case of "victory for the latecomer."

As early as August 2018, Hengli Group finalized the acquisition of a 29.91% stake in *ST Songfa, gaining control of the listed company. Why did it wait until 2024 to inject assets?

This "delayed" capital strategy was influenced by both regulatory considerations and industrial realities.

According to the "Administrative Measures for Major Asset Reorganization of Listed Companies," if assets are injected within 36 months of a change in control and the transaction meets backdoor listing criteria, it is treated as a major asset reorganization (backdoor listing). In such cases, the injected assets must meet IPO requirements and are subject to the same scrutiny as an IPO.

Since Chen Jianhua and Fan Hongwei gained control of *ST Songfa in August 2018, the 36-month period ended in August 2021. Injecting Hengli Heavy Industry before this date would have faced greater regulatory hurdles, longer approval times, and higher uncertainty.

A more fundamental reason for the delay was that Hengli Group's high-end shipbuilding platform, Hengli Heavy Industry, had not yet been established. It was only in July 2022 that Hengli Group specifically established Hengli Heavy Industry and spent 2.11 billion yuan to acquire the core assets of STX Dalian Group, which had been idle for a decade.

Over the next two years, Hengli Heavy Industry focused on rebuilding production lines, forming technical teams, delivering its first vessel, and expanding its client base. It was only by 2024, with hundreds of billions in orders and stable delivery capabilities, that the asset injection was formally launched.

This long-term strategy—"first gain control, then nurture the business, finally execute the swap"—avoided the risks of injecting immature assets early on while ensuring that the reorganization would immediately contribute strong performance.

From a timing perspective, by 2024, *ST Songfa's core business was languishing, making the ST designation inevitable. Injecting assets became almost the only effective way to avoid delisting.

In terms of industrial timing, Chen Jianhua and Fan Hongwei also appeared to be "late." The current shipbuilding boom had already started around the end of 2020. Hengli Heavy Industry was only established in July 2022 and acquired the STX Dalian assets, with its first vessel commencing construction in 2023.

On the surface, Hengli Heavy Industry seemed to have missed the optimal window in the industry cycle. However, this "lateness" turned into a unique competitive advantage.

Industry analysts note that due to earlier overheating, many leading shipyards had taken on orders too aggressively, causing their order book coverage to extend from about 2.5 years to over 3.5 years, with some approaching 4 years. This rapid saturation of capacity led many shipowners, facing long waiting times, to turn to emerging shipbuilders.

Meanwhile, Hengli Heavy Industry, with its newly built docks and flexible production scheduling, adeptly captured this overflow demand. According to its official website, the company secured orders for 115 vessels in 2025, with a total contract value exceeding 100 billion yuan.

Entering 2026, *ST Songfa has repeatedly announced major contract signings, with cumulative orders surpassing $5 billion. These include orders for very large crude carriers (VLCCs) of 306,000 deadweight tons and crude oil tankers of 158,000 deadweight tons.

To further solidify its long-term competitiveness, in January of this year, *ST Songfa announced a private placement plan to raise 7 billion yuan, which will be invested in projects such as an integrated green and intelligent high-end shipbuilding facility.

As the process of removing the ST label advances, the private placement proceeds, and orders continue to be fulfilled, *ST Songfa is expected to officially rename itself "Hengli Heavy Industry," completely leaving its ceramics era behind.

The story of *ST Songfa is not just about an ST stock's dramatic reversal; it is a textbook example of strategic timing and industrial insight. The "delayed" moves by Jiangsu's richest couple did not cause them to miss opportunities but instead allowed them to position themselves perfectly at the most opportune moment.

In the business world, the true winners are often not those who start earliest, but those who best understand how to seize the right moment. We will continue to monitor the subsequent developments of *ST Songfa.