Hengxin Mobile Business

The battle for control of ST Hengxin has flared up again. A proposal by seven shareholders including actual controller Meng Xianmin to convene an extraordinary general meeting has been shelved once more after state-owned ally Ningbo Meishan Bonded Port Area Dongxu Investment Partnership withdrew at the last minute. The board's audit committee received the proposal on September 30, but Dongxu Investment declared the same day that it would no longer act as a proposer. It holds 8.306 million shares, or 1.37 percent. After its withdrawal, the remaining shareholders hold a combined 57.5873 million shares, or 9.52 percent, falling short of the 10 percent threshold required by the Company Law. The board's audit committee therefore declined to review the proposal. This is the second setback for Meng Xianmin within a month. A proposal in mid-September was rejected by the board with zero votes in favor, six against, and one abstention. Previously, due to judicial transfers and auctions, Meng Xianmin had been forced to reduce his holdings by 25.1 million shares, with his stake falling from 10.51 percent to 6.36 percent. The combined stake of the convener camp also shrank from 14.88 percent to 10.90 percent. Meng Xianmin is now losing ground on both the equity and board fronts, while Shunbo Tianyuan Shanghai Enterprise Management Partnership, which took over his auctioned shares, has Hubei Provincial Asset Management and other state-owned forces behind it, becoming a new variable with a 3.98 percent stake.

ST Hengxin released its 2026 interim report. Total operating revenue was 151 million yuan, down 18.07% year-on-year. Net loss attributable to the parent company was 102 million yuan, a decrease of 5.67 million yuan compared with the same period last year, with the loss widening year-on-year. Net cash flow from operating activities was negative 8.37 million yuan. The asset-liability ratio rose to 66.29%. Gross margin was negative 0.19%. Return on equity was negative 13.95%. Diluted earnings per share was negative 0.17 yuan. The company had 31,500 shareholders, and the top ten shareholders held 19.92% of total share capital.

ST Hengxin, its controlling shareholder, and actual controller Meng Xianmin are once again under investigation by the China Securities Regulatory Commission for suspected illegal information disclosure. The company announced on the evening of July 27 that it had received a case filing notice from the CSRC that day, less than three months after the previous penalty. Earlier, ST Hengxin was first placed under investigation on August 12, 2025, and received an administrative penalty decision from the Beijing bureau of the CSRC on April 30, 2026. For inflating its 2022 operating revenue by 182 million yuan, accounting for 37.12 percent of the disclosed revenue for that period, it was fined 5 million yuan. In addition, the company recently received a lawsuit filed by controlling shareholder Meng Xianmin to revoke certain resolutions, involving some resolutions of the 2025 shareholders' meeting and board of directors.

On the evening of July 27, multiple listed companies on the Shanghai and Shenzhen exchanges released announcements. Orient Securities plans to acquire 100% equity of Shanghai Securities for 25.12 billion yuan, with share consideration of 23.55 billion yuan and cash consideration of 1.57 billion yuan. Guotai Junan Securities has been approved to publicly issue corporate bonds to professional investors totaling no more than 80 billion yuan. China Energy Engineering Corporation signed new contracts worth 513.188 billion yuan in the first half of the year, down 33.81% year-on-year; PowerChina signed new contracts worth 619.893 billion yuan in the first half, down 9.73% year-on-year. Shenhuo Coal Industry and Power reported first-half net profit of 4.781 billion yuan, up 151.06% year-on-year; Dongfang Precision reported first-half net profit of 3.846 billion yuan, up 867.75% year-on-year, and plans to distribute a cash dividend of 2 yuan per 10 shares. Foxconn Industrial Internet plans to repurchase shares worth 1 billion to 2 billion yuan, and iFlytek plans to repurchase shares worth 100 million to 200 million yuan. A controlled subsidiary of Changxin Bochuang signed a long-term cooperation agreement for the sale of optical fiber and cable worth approximately 4.5 billion yuan. In addition, ST Hengxin has been placed under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure laws, and a controlled subsidiary of Beingmate has suspended production due to typhoon and rainstorm, with some assets suffering losses.

ST Hengxin announced that its controlling shareholder and actual controller, Meng Xianmin, has filed a lawsuit against the company in the Beijing Dongcheng District People's Court, seeking to revoke items 8 through 17 of the 2025 Annual Shareholders' Meeting Resolutions adopted on June 30, 2026, and the Resolution of the 35th Meeting of the Eighth Board of Directors adopted on July 3, 2026. The resolutions under challenge primarily involve the removal and election of company directors. Previously, Meng Xianmin had proposed removing Tang Xujun as a non-independent director and electing Yuan Hui to replace him, while also removing three independent directors, Pang Jinwei, Xu Xibin, and Zhu Wei, and electing Hu Yongping, Li Xuefei, and Liu Nian as their replacements. However, the voting results showed that his proposals received approximately 44% of votes in favor and about 54% against. Meanwhile, a proposal by minority shareholder Liu Jianyu and others to remove Meng Nan, Meng Xianmin's son, as a non-independent director received roughly 57% approval. The company also disclosed that 11.6 million shares held by Meng Xianmin will be subject to judicial auction, accounting for 18.55% of his total holdings and 1.92% of the company's total share capital. If the auction is completed, his stake will decrease from 10.34% to 8.42%. This will not trigger a change in control for now, but further judicial auctions could potentially affect control. The case has not yet been heard, and the company stated it will actively defend itself and monitor developments.