A century‑spanning brand in China’s hardware sector has lost its majority shareholder. Shanghai investor Tuyue Chengxiang increased its holdings through market purchases and, together with an allied vehicle, now holds just under 30% of Zhang Xiaoquan, briefly making it the largest shareholder and leaving the listed company with no controlling shareholder or clear ultimate controller.
The ownership shift follows a series of judicial auctions last year prompted by debt default at Zhang Xiaoquan Group and its parent, Fuchun Holdings. In May 2025 two parcels of shares formerly held by Zhang Xiaoquan Group — 3.2056 million and 28.7563 million shares — were sold for roughly RMB 50.18 million and RMB 358 million respectively. Those sales drove the group’s stake down from 48.72% at the end of 2024 to about 28.23% by mid‑2025, and private buyers including an individual, Yang Tao, and the entity controlled by Wang Aoyan stepped in.
Tuyue Chengxiang moved quickly after the auctions. In June it used control of the company’s employee share‑holding platform, Rongquan Investment, to gather an additional c.9.72% and subsequently increased direct holdings by 1.5 million shares in January 2026. That combination lifted its combined share to roughly 29.99% on an adjusted basis, narrowly ahead of the Zhang Xiaoquan Group by around 0.9 percentage points. Because the two largest blocs are so close in size, small trades or personnel changes could tip control again.
The corporate drama sits against weaker operating performance. Zhang Xiaoquan — listed on ChiNext in September 2021 and often described as the A‑share market’s “knife‑and‑scissors” stock — has seen revenues broadly rise while net profits attributable to shareholders fell from RMB 78.7 million in 2021 to RMB 25.0 million in 2024. A high‑profile product failure in 2022 dented results for two subsequent years and exposed the firm’s vulnerability.
Structural risk runs deeper than a single incident. The company is heavily concentrated in household hardware: “household metalware” accounted for more than 98% of revenues for four consecutive years and 99.3% in 2024. Expenditure patterns show a heavy tilt to marketing — sales costs rose 44% from 2021 to 2024 — while R&D spend has been flat and tiny by comparison, undermining the firm’s long‑term innovation capacity.
The proximate cause of the ownership upheaval is the wider debt crisis engulfing Zhang Xiaoquan’s controlling group and its parent. Since 2024, Fuchun Holdings pursued aggressive, capital‑intensive diversification into property, senior care and food‑park projects, funded with high leverage and cross guarantees. By May 2025 courts had accepted restructuring requests and consolidated more than 60 affiliated companies into a substantive reorganization. As of May 2025 Zhang Xiaoquan Group’s overdue principal debts were about RMB 653 million, guarantee defaults totaled roughly RMB 5.17 billion and the total risk exposure approached RMB 6 billion; by July 2025 enforcement actions exceeded RMB 3.9 billion.
The new largest shareholder’s background matters. Tuyue Chengxiang is controlled by Wang Aoyan, a 1989‑born entrepreneur known in China’s tech and e‑commerce circles as the founder of White Rabbit Group, a major Douyin (TikTok China) e‑commerce MCN, and a former executive at Baidu’s Hao123 and Quanmin TV. Wang is now on Zhang Xiaoquan’s board and serves as general manager, signaling an intent to deploy digital distribution and marketing muscle to revive sales.
Operationally, management projects a rebound: Zhang Xiaoquan forecasts 2025 net profit attributable to shareholders of between RMB 48 million and RMB 68 million, a year‑on‑year rise of 92% to 172%. Management attributes the improvement to product quality upgrades, technology‑enabled production, supply‑chain optimisation and a dual channel strategy that keeps shelf distribution while pushing into interest‑driven e‑commerce. Whether deeper structural issues — product concentration, weak R&D and the governance implications of a fragmented shareholder base — are resolved remains uncertain.
For investors and policymakers the case is illustrative. A historically respected “time‑honoured” brand has been drawn into a tangled web of cross‑guarantees and high‑risk diversification by a controlling owner, exposing it to creditor‑led asset sales and ownership volatility. The immediate questions are whether the new shareholder will stabilise the business and invest for the long term, whether creditors and courts will force a more comprehensive restructuring, or whether the listed company will be treated as an asset to monetise. Market participants will be watching personnel moves, cash flows and any further disposals closely.