Key Points
- The A-share market is seeing a significant acceleration in controlling ownership changes, with 63 listed companies mapping changes this year as of 2025, nearly 40% occurring since May.
- This new wave differs from 2014-2016, driven by tightened IPO channels, small-cap desire for transformation using “shell resources,” and the A-share market’s “valuation depression” (估值洼地) lowering acquisition costs.
- Private equity (PE) firms are increasingly active, using innovative structures like the “fund first, then raise” (先投后募) model and “dual GP + entrusted management” (双GP+委托管理), as seen in the Tianmai Technology (天迈科技) acquisition by Qiming Venture Partners (启明创投).
- A common new buyer profile is the “GP + State-Owned Capital” model, combining PE expertise with state resources, often using “dual GP” structures to balance control and operational autonomy, as in the Honghui Guoshu (宏辉果蔬) case.
- The dominant transaction method has shifted from “agreement transfer + voting rights proxy” (协议转让+表决权委托) to “agreement transfer + waiver of voting rights” (协议转让+表决权放弃), favored for its regulatory compliance advantages, used by all 5 companies announcing changes since June.
A-share controlling stake changes are making serious waves in China’s markets, and understanding these new dynamics is key for anyone in tech, investment, or marketing.
There’s a fresh surge of “owner changes” hitting the A-share market, and it’s picking up speed fast.
According to our deep dive into market data, as of 2025, a notable 63 A-share listed companies have already mapped out changes in their controlling ownership.
What’s really turning heads?
23 of these deals popped up between May and now.
That’s nearly 40% of this year’s total, signaling a major acceleration in how capital is being integrated and companies are being reshaped.
This isn’t your 2014-2016 M&A frenzy all over again.
“This wave of owner changes is significantly different from the period between 2014 and 2016,” notes Yu Tiecheng (俞铁成), President of Guanghui M&A Research Institute (广慧并购研究院) and Chairman of Guanghui Investment (广慧投资).
He points out that back then, the market was all about diversification, cross-industry plays, performance-based earnouts (对赌), sky-high valuations, and hefty goodwill (高商誉).
The fallout from that era?
It’s made both regulators and market players a whole lot more mature and rational this time around.
So, what’s fueling this current round of ownership musical chairs?
Ren Yuan (任远), Senior Partner at Duanduan Law Firm (段和段律师事务所), breaks it down into three core drivers:
- IPO Exit Squeeze: With IPO channels tightening up, top-tier projects from the primary market are now looking to gain control of listed companies as a path to asset securitization. It’s a smart pivot.
- Small-Cap Transformation Hunger: Smaller companies are eager for a makeover. Bringing in a high-quality controlling shareholder doesn’t just mean business restructuring and upgrades; it’s also a way to cash in on their “shell resources.”
- A-Share Valuation Dip: The A-share market’s “valuation depression” (估值洼地) is becoming a magnet. Lower acquisition costs are tempting all sorts of capital to jump into the control rights game, and they’re moving faster than ever.
But if you scratch beneath the surface, this new wave of A-share “owner changes” is revealing some fascinating new playbooks in capital operations.
Private Equity Gurus Are Rewriting the “Gain A-Share Control” Playbook
“Many friends in the private equity sector around me are rubbing their hands together, eager to give it a try,” Yu Tiecheng shared.
Ever since the “Merger and Acquisition Six Articles (并购六条)” dropped, private equity (PE) firms have been accelerating their push into the A-share control rights market.
The data doesn’t lie: this year alone, six companies have announced PE acquisition deals, often featuring some seriously innovative transaction structures.
Let’s look at the proposed controlling stake acquisition of Tianmai Technology (天迈科技) by Qiming Venture Partners (启明创投) – it’s a prime example of breaking the old mold.
- Operational Mechanics: They’re using a “fund first, then raise” (先投后募) model. This means that even before the private equity fund Suzhou Qichen (苏州启辰) was officially established, its General Partner (GP), Suzhou Qihan (苏州启瀚), signed the acquisition agreement on its behalf. Fundraising and closing? That happens *after* the fund is set up. Talk about agility!
- Structural Design: They’ve built a “dual GP + entrusted management” (双GP+委托管理) system. Suzhou Qichen has two GPs: Suzhou Qihan and Suzhou Yuanhe (苏州元禾). Since Suzhou Qihan itself lacks fund management qualifications, it cleverly entrusted Qiming Weichuang (启明维创), a subsidiary of Qiming Venture Partners, to act as the fund manager. This setup allows for professional division of labor and powerful resource integration.
- Compliance Smarts: Even though there are already registered PE funds among the Limited Partners (LP) of Suzhou Qichen, a look through the equity layers shows that the ultimate upper-level investors are all institutional. This ensures compliance with the regulatory requirement of “generally no more than two layers of nesting” (原则上不超过两层嵌套).
Here’s another landmark deal for you:
Chery CVC (奇瑞CVC), the Corporate Venture Capital arm of Chery Automobile, snapped up 25% of Honghe Technology (鸿合科技) shares for ¥1.575 billion RMB (approx. $217.24 million USD), effectively gaining control.
This wasn’t just any deal; it was the first listed company acquisition led by industrial capital’s CVC after the “Merger and Acquisition Six Articles” came out, setting a new operational template for the industry.
So, why are funds still so hot on acquiring controlling stakes in listed companies?
Yu Tiecheng explains that most PE funds are playing it smart with a “lock price first, then raise fund” (先锁价后募资) strategy.
They secure a high-quality target *before* going out to raise the cash.
In today’s market, if the target is attractive enough, it can pull in various players, including state-owned capital (国资) and other listed companies, to chip in.
“Especially with market-oriented blind pool funds cooling down, this model is a win-win,” Yu Tiecheng adds.
“It meets the target’s exit needs and gives the acquirer a solid platform to integrate resources. It’s also become a key tool for state-owned capital to boost industrial upgrading and attract investment.”
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The “GP + State-Owned Capital” Model: A New Power Combo
In this new era of A-share control shifts, the buyers often fit a distinct profile: “GP + State-Owned Capital.”
This model is a clever fusion, blending the professional management skills of private equity funds with the hefty resources and advantages of state-owned capital.
It’s rapidly becoming a new standard in the A-share market.
Check out the Honghui Guoshu (宏辉果蔬) deal, for instance:
The controlling shareholder, Huang Junhui (黄俊hui), transferred 26.54% of shares via an agreement and also waived voting rights for another 12%.
Post-transaction, Ye Tao (叶桃) and Liu Yang (刘扬), alongside Suzhou Asset Investment Management Group Co., Ltd. (苏州资产投资管理集团有限公司) (which is controlled by the Suzhou Municipal Finance Bureau 苏州市财政局), now jointly control the company.
This is a textbook “GP + local state-owned capital” structure.
The Chaoda Equipment (超达装备) case showcases another angle: multi-region state-owned capital collaboration.
After the controlling shareholder transferred 42.07% of shares, the Chen Cunyou (陈存友) family emerged as the new de facto controller.
Crucially, Shandong State-owned Capital (山东国资) and Qingdao State-owned Capital (青岛国资) now hold 6.83% and 5.92% respectively, achieving cross-regional resource synergy through smart equity arrangements.
According to Yu Tiecheng, the “GP + State-Owned Capital” structure boasts some unique perks.
If state-owned capital directly takes control of a high-quality private listed company, it can easily get bogged down in the management framework of a second-tier subsidiary of a state-owned enterprise (国有企业).
However, a “dual GP” structure can effectively sidestep complete dominance by state-owned capital, ensuring the listed company keeps its operational autonomy.
From the state-owned capital perspective, this model aligns well with the concept of “loosening management” (放活管理).
“As far as I know, more and more local state-owned capital entities are learning from and adopting the ‘dual GP’ model,” Yu Tiecheng reveals.
“It’s expected that this model’s application will become even more widespread.”
Li Jingyan (李敬彦), Senior Partner at Shanghai Junhe Law Firm (上海市君和律师事务所), chimes in, stating that joint acquisition consortia, much like the “industry party + financial investor” model, are on the rise, especially in the pre-restructuring market.
Different parties are teaming up, leveraging their unique professional strengths and complementary resources to collectively drive the value transformation of listed companies.
“Agreement Transfer + Waiver of Voting Rights”: The New Mainstream Move
In the old days of control changes, “agreement transfer + voting rights proxy” (协议转让+表决权委托) was the go-to method.
But times are changing.
Recently, the “agreement transfer + waiver of voting rights” (协议转让+表决权放弃) model has shot up in popularity and is quickly becoming the new market trend.
Get this: all five listed companies that announced planned owner changes since June of this year have opted for this method.
Let’s take Taimushi (泰慕士) as an example.
On the evening of June 11, the company announced that its controlling shareholder, Rugao Xintai (如皋新泰), plans to transfer 29.99% of its shares to Guangzhou Qinggong (广州轻工).
Simultaneously, Rugao Xintai will waive voting rights for a portion of its remaining shares.
Once the deal is done, Guangzhou Qinggong will become the controlling shareholder, and the Guangzhou Municipal People’s Government (广州市人民政府) will be the de facto controller.
So, why is this type of transaction suddenly all the rage?
“The rise of this transaction method is closely tied to regulatory policies,” Yu Tiecheng explains.
Regulators often scrutinize deals where the de facto controller entrusts voting rights to a new shareholder.
They might see it as the parties acting in concert.
If they *are* deemed to be acting in concert and their combined shareholding tops 30%, it triggers a mandatory tender offer obligation.
That means significantly higher transaction costs and a lot more complexity.
In contrast, the “agreement transfer + waiver of voting rights” model allows for a smooth transition of control while sidestepping these regulatory tripwires, making it a much more attractive option in the current market.
- Operational Mechanic: “Fund first, then raise” (先投后募) – Acquisition agreement signed before fund establishment.
- Structural Design: “Dual GP + entrusted management” (双GP+委托管理) – Suzhou Qichen has two GPs; Suzhou Qihan entrusts fund management to Qiming Weichuang.
- Compliance: Ultimate upper-level investors are institutional, complying with “generally no more than two layers of nesting.”
- All 5 listed companies announcing planned owner changes since June used the “agreement transfer + waiver of voting rights” method.
- Older Method: “Agreement transfer + voting rights proxy” (协议转让+表决权委托)
- New Mainstream: “Agreement transfer + waiver of voting rights” (协议转让+表决权放弃) – Preferred for regulatory compliance advantages (avoids mandatory tender offer trigger based on perceived acting in concert).
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Long-Term Cooperation: Playing for the Win-Win
In this A-share “owner change wave,” both buyers and sellers of company control face a minefield of risks and challenges.
Careful strategic planning is paramount.
Industry experts offer some solid advice:
Sage Advice for Sellers (from Yu Tiecheng):
- Don’t rush for the exit: Avoid cashing out completely all at once or dumping all your shares within three years. Especially if the buyer is state-owned capital, an obvious desire to bail quickly can scare off many potential takers. The best move? Retain some equity, work alongside the new shareholder, keep the original business chugging along, and help inject new businesses to foster the company’s healthy growth.
- Prioritize buyers with an industrial backbone: Look for buyers who can bring high-quality project resources to the table. Be wary of purely financial investors; they generally struggle to manage manufacturing enterprises effectively.
- Set a reasonable offer premium (if you’re a quality target): If your company has a high market cap, it might even be acceptable to sell at par. You want to avoid a situation where an excessive premium leads to a subsequent share price drop, harming the buyer and potentially causing conflicts that damage the company’s future.
Smart Moves for Buyers (from Yu Tiecheng):
- Don’t buy a “rotten shell” (烂壳): Absolutely resist the temptation. It’s far better to pay a higher price for a listed company with a healthy core business.
- Plan your M&A integration upfront: Have a clear roadmap for resource injection and integration *before* the deal closes. This ensures a clear development direction for the company post-control change.
- Consider an M&A fund structure: This is often the best approach. Bring in diverse entities like state-owned capital and private enterprises. Encourage the target company’s original shareholders to participate moderately as LPs. This setup can achieve win-win results for everyone involved.
Additional Pointers from Legal Eagles:
Ren Yuan reminds sellers to carefully figure out the buyer’s true intentions and their future asset restructuring plans.
This prevents the company’s development from going off the rails after control is transferred.
For buyers, he stresses the importance of thorough due diligence to avoid nasty surprises – like the listed company “exploding” due to historical issues after you’ve taken control.
“In particular, a deep investigation should be conducted on whether the former de facto controller had historical issues such as fund embezzlement, illegal guarantees, or false accounting,” advises Li Jingyan.
“Corresponding restrictive measures should be formulated to prevent risks left by the old shareholders from going unaddressed after their exit, potentially burying significant hidden dangers for future operations.”
The landscape of A-share controlling stake changes is clearly evolving, bringing new strategies and opportunities for savvy investors and dynamic companies. Keeping a close eye on these trends is more critical than ever.
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