Wuxi State-Owned Assets Invest! 1.1 billion yuan acquires this A-share company. The founder couple signs a "betting agreement," promising a net profit of 510 million yuan over 3 years.

On March 2nd, Flantek (SH603966, trading halt) announced that due to progress in the transfer of shares by the controlling shareholder and actual controller, the company’s stock will resume trading starting from the market open on March 3rd.

According to the relevant agreement, Wuxi Xintou Qihang Mergers and Acquisitions Investment Partnership (Limited Partnership) (referred to as “Xintou Qihang”) will acquire 26.39% of the voting rights in Flantek.

The “Daily Economic News” reporter noted that the total transaction amount is approximately 1.14 billion yuan, with Flantek’s overall valuation anchored at 5.5 billion yuan. After the transaction, the controlling shareholder of Flantek will change to Xintou Qihang, and the actual controller will shift from Jin Hongping and Tao Fenghua夫妻 to the Wuxi Xinwu District People’s Government.

Additionally, both parties signed a three-year performance commitment agreement, in which Jin Hongping and Tao Fenghua夫妻 pledge that the net profit will not be less than 510 million yuan over the next three years.

Wuxi State-owned Assets Plans to Invest 1.1 Billion Yuan to Take Control

Flantek has been suspended since February 26, 2026, due to plans to change control. After days of communication and negotiations, the mystery behind this transaction has finally been unveiled.

Before this equity change, Jin Hongping and Tao Fenghua夫妻 directly and indirectly controlled a total of 35.86% of Flantek’s shares, making them the founders, controlling shareholders, and actual controllers of the company.

On March 2nd, Tao Fenghua and Jin Hongping夫妻 signed the “Share Transfer Agreement” with Xintou Qihang. At the same time, Tao Fenghua, Jin Hongping, and their concerted party Shanghai Zhixiang Enterprise Management Co., Ltd. (“Shanghai Zhixiang”) signed the “Capital Increase Agreement” with Xintou Qihang.

Xintou Qihang, the acquirer, has strong backing. The announcement shows that Xintou Qihang was established on January 26, 2026. After penetrating the shareholding structure, its controlling shareholder is Wuxi Xinfa Group Co., Ltd., with the actual control being the Wuxi Xinwu District People’s Government.

The transfer price in this agreement is based on the company’s overall valuation of 5.5 billion yuan, corresponding to a per-share price of 13.7958 yuan, slightly above Flantek’s pre-suspension closing price of 13.45 yuan per share.

Regarding transaction details, this is a step-by-step capital operation. First, Tao Fenghua plans to transfer approximately 12.58 million shares (3.16% of total shares) directly held in the company to Xintou Qihang at about 170 million yuan; Jin Hongping plans to transfer 45.8 million shares (11.49%) at about 630 million yuan. Second, Jin Hongping intends to transfer her 50% stake in Shanghai Zhixiang to Xintou Qihang at about 320 million yuan. Through these steps, the founding couple will cash out over 1.1 billion yuan directly.

Meanwhile, Xintou Qihang will inject about 12.86 million yuan into Shanghai Zhixiang. After the capital increase, Xintou Qihang’s stake in Shanghai Zhixiang will reach 51.00%. Through this series of operations, Xintou Qihang will control 26.39% of the voting rights in Flantek, becoming the new controlling shareholder.

After the transaction, Jin Hongping will no longer hold shares in Flantek, and Tao Fenghua’s direct shareholding will decrease to 9.47%.

Furthermore, to ensure market confidence, Xintou Qihang has issued a lock-up commitment: within 60 months from the completion of this equity change, it will not transfer the company’s shares to the outside or transfer control.

Founders’ Commitment to 3 Years of 510 Million Yuan Net Profit

While the founders’ couple exits with a large cash payout, Wuxi State-owned Assets has also set strict performance commitments.

According to the “Share Transfer Agreement,” the transferors (Tao Fenghua and Jin Hongping) agree to make moderate performance commitments for the company’s future development, covering the fiscal years 2025, 2026, and 2027. They pledge that the company’s cumulative net profit attributable to the parent during these three years will not be less than 510 million yuan.

It is worth noting that this net profit will exclude the additional profits generated from assets injected by Xintou Qihang in the future, and will add back the expected returns from investments made using the company’s funds, to reflect the profitability of the original business.

According to the agreement, if this target is not met and the actual net profit is less than 80% of the promised net profit, the transferors must undertake cash compensation obligations. The compensation amount will be strictly calculated based on the proportion of the company’s shares held by Xintou Qihang (26.39%) after the performance period, and paid directly to Xintou Qihang.

To ensure smooth execution of the compensation, the transferors will pledge 5 million shares of the listed company to Xintou Qihang as collateral within 7 working days after the full payment of the share transfer price, with the pledge lasting until December 31, 2028.

Regarding corporate governance restructuring, within 10 working days after the transfer of the target shares, Flantek will hold a shareholders’ meeting and a board of directors’ meeting for re-election. The seven-member board will include two non-independent director candidates and three independent director candidates nominated by Xintou Qihang, thus occupying an absolute majority of seats, and the directors they nominate will serve as chairman and legal representative. The original actual controller will retain only one non-independent director nomination right (the other being an employee director).

However, to maintain stable daily operations, Xintou Qihang will, while holding financial control (with the authority to appoint the CFO), temporarily delegate operational rights back to the original control team.

Both parties agree that during the performance commitment period, the general manager will be nominated by Tao Fenghua and Jin Hongping, and they guarantee that he will be reappointed after the current term. The personnel appointment and removal rights for other core management and key positions will also belong to the general manager.

Currently, Xintou Qihang has a two-month due diligence period. If significant false statements or materially adverse issues are discovered, it reserves the right to terminate the transaction.

Additionally, this control change is subject to approval from the state-owned assets supervision department, filing of asset appraisal for Shanghai Zhixiang, approval from the State Administration for Market Regulation for operator concentration (if required), and compliance confirmation from the Shanghai Stock Exchange.