The restructuring saga of legendary lithium battery giant Shanshan Group has finally reached a decisive conclusion. The company, founded by Zhejiang businessman Zheng Yonggang and famously pivoted from fashion into new energy, is about to formally transition into a new materials industry platform controlled by Anhui state-owned capital.
On the evening of 22 April, Shanshan Inc. announced that it had received a civil ruling from the Yinzhou District Court approving the Restructuring Plan for Shanshan Group Co., Ltd. and Ningbo Pengze Trading Co., Ltd., and terminating the debtor’s restructuring proceedings. Under the plan, the restructuring investor Anhui Wanwei Group Co., Ltd. (“Wanwei Group”) will acquire control of 21.88% of the voting rights in Shanshan Inc. through direct share purchases and concerted-action arrangements with retained shares. Following completion, the controlling shareholder of Shanshan Inc. will change to Wanwei Group, and the ultimate controller will become the Anhui Provincial State-Owned Assets Supervision and Administration Commission (SASAC). The change of control remains subject to a competition clearance review, and Wanwei Group will also reorganise the Shanshan Inc. board.
A Turbulent Path to Restructuring
“Shanshan” was once one of China’s most recognised apparel brands, founded by Zhejiang entrepreneur Zheng Yonggang in 1989. In 1999, Zheng pivoted into lithium battery materials, and Shanshan Inc. gradually divested its clothing brands to focus on new energy, becoming one of the earliest Chinese companies to enter lithium battery anode materials.
In 2021, Shanshan Inc. completed a strategic acquisition of LG Chem’s LCD polariser business, vaulting into the global polariser leadership with the number-one market share in large-format LCD polarisers. The company’s two core businesses became anode materials and polarising films.
A sudden disruption shattered the company’s growth trajectory. After Zheng Yonggang’s death from illness in 2023, Shanshan Group descended into an intense family power struggle that severely disrupted corporate governance. Combined with heavy prior investment in the polariser business and share-pledge financing from its earlier diversification push, the company’s capital chain broke completely in 2024, triggering a full-blown debt crisis.
On 20 March 2025, Shanshan Group and its wholly owned subsidiary Pengze Trading were ordered into substantive consolidated restructuring by the Yinzhou Court. Audited total debts amounted to RMB 33.55 billion (~US$4.9 billion), with a high proportion of Shanshan Inc. shares frozen due to pledges and guarantee disputes, creating complex ownership issues.
To resolve the crisis, restructuring administrators launched two rounds of investor recruitment. “Private shipping king” Ren Yuanlin’s Xinyangtze Trading, TCL Industrial Investment, Orient Asset Management, and Fangda Carbon (China’s leading carbon products company) all entered the fray. Each attempt failed — bidders either withdrew voluntarily or their plans were voted down.
State Capital Breaks the Deadlock
Just as the restructuring outlook remained uncertain and the market largely adopted a wait-and-see stance, an announcement in early February 2026 broke the impasse. A consortium comprising Wanwei Group, Conch Group, and Ningbo Jinzi was selected, and Shanshan Group formally signed a Restructuring Investment Agreement with Wanwei Group and Ningbo Jinzi.
Under the agreement, Wanwei Group plans to pay total consideration of up to RMB 7.156 billion (~US$1.05 billion) to acquire 13.5% of Shanshan Inc. shares from the debtors, while binding the voting rights of the remaining 8.38% through concerted-action arrangements, ultimately achieving control of 21.88% of voting rights and becoming the controlling shareholder.
While Wanwei Group’s core listed subsidiary Wanwei High-Tech has a market capitalisation of approximately RMB 14.55 billion (~US$2.13 billion) — only around 43% of Shanshan Inc.’s market cap — Anhui’s state-owned capital may have been laying the groundwork for industrial synergies well in advance. Since August 2025, restructuring plans among Anhui provincial enterprises have been progressing: Wanwei Group’s reorganisation with Conch Group, Anhui Provincial Guokong Group, and Anhui Provincial Investment Group is under way. Once completed, Conch Group will become Wanwei Group’s controlling shareholder and, by extension, the indirect controlling shareholder of Shanshan Inc. Conch Group, as a cement industry leader, has abundant cash flow, and its capital injection reduces Wanwei Group’s effective funding burden from the total RMB 7.156 billion consideration (of which direct share acquisition is approximately RMB 4.987 billion, ~US$730 million).
From an industrial logic perspective, Wanwei Group is currently in the midst of a leap from basic chemicals to high-end new materials. Its main business is the R&D, production, and sale of polyvinyl alcohol (PVA) and derivative products, with PVA and high-strength, high-modulus PVA fibre production and sales ranking first nationally. After integrating Shanshan, Wanwei Group can achieve core raw material self-supply, building a “PVA feedstock — polariser” industrial chain loop that reduces supply chain costs and expands global sales channels.
With the court’s approval now secured, Shanshan Group’s restructuring saga of over a year has finally achieved certainty. According to Shanshan Inc.’s earnings guidance, the company expects 2025 net profit attributable to shareholders of RMB 400–600 million (~US$59–88 million) and recurring net profit of RMB 300–450 million (~US$44–66 million), returning to profitability.
In the industry’s view, the change of ownership at Shanshan is not merely a capital transaction but will open a new phase of state-led industrial consolidation, with both earnings and market share poised to rise further.
Note: All CNY figures converted to USD at an approximate rate of 1 USD = 6.83 CNY as of 1 May 2026.
Source: Shimo Shixun (石墨时讯), “杉杉重整“大戏”落幕”, republished via WeChat, 29 April 2026.
Original source: Shanghai Securities News (上海证券报)
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