Guangdong Songyang Regeneration Resources Co., Ltd. (Songyang Resources) announced on June 27 that the company has suspended trading of its stocks due to planned equity transfer matters. Over the three years from 2022 to 2024, Songyang Resources accumulated losses of 750 million yuan.
In the “Suspension Announcement on Planning Changes in Control Rights” released on the 27th, Songyang Resources stated that on June 26, 2025, the company received a notification from its controlling shareholder and actual controller, Mr. Wang Zhuangpeng, stating that he is planning the transfer of company stock agreements, which may lead to a change in the company’s control rights. To “avoid causing abnormal fluctuations in the company’s stock price,” the company’s stocks will be suspended from trading starting on June 27, 2025 (Friday) and the suspension will not exceed two trading days.
Public information shows that Songyang Resources is a high-tech enterprise specializing in the research and development, production, and sales of environmentally friendly recycled paper. In June 2019, the company went public on the Shanghai Stock Exchange with main business operations covering coated whiteboard paper, high-strength corrugated paper, and specialty paper production.
In recent years, the paper industry in China has experienced a wave of overcapacity expansion, leading to severe excess production capacity. Coupled with rising raw material pulp prices and sluggish downstream demand, paper companies have seen a significant decline in performance.
Amid the industry’s downturn, Songyang Resources has also been struggling. According to a report by “Huaxia Times” on June 28, from 2022 to 2024, Songyang Resources accumulated losses of 750 million yuan. Specifically, in 2022, the company’s net profit loss was 277 million yuan; in 2023, the net profit loss was 237 million yuan; and in 2024, the net profit loss amounted to 236 million yuan.
In its 2024 annual report, Songyang Resources mentioned that in terms of gross profit margin, there is still a long way to go to turn losses into profits. In 2024, the company achieved revenue of 133 million yuan from coated whiteboard paper, with a gross profit margin of -11.50%; revenue from high-strength corrugated paper was 453 million yuan, with a gross profit margin of -4.93%; revenue from specialty paper was 134 million yuan, with a gross profit margin of -7.68%. In the first quarter of 2025, the company’s performance continued to decline, with a net profit of -18.01 million yuan.
To alleviate financial pressure, on June 18, Songyang Resources announced its plan to sell the state-owned land use rights located on Fengya West Road, southeast side of Haiwei District, Chenghai District, Shantou City, with a total price of 84 million yuan to revitalize its existing assets.
Furthermore, the controlling shareholder of the company, Wang Zhuangpeng, also engaged in equity pledges. The 2024 annual report shows that Wang Zhuangpeng, as the largest shareholder, holds 42.7305 million shares of the company’s stock, with 32.86 million shares pledged, representing a pledge ratio of 76.9%; Shenzhen Qianhai Jin Xingyang Investment Co., Ltd. is the second largest shareholder of the company, holding 10.366 million shares of the company’s stock, with 10 million shares pledged, amounting to a pledge ratio of 96.47%; Wang Zhuangjia, as the third largest shareholder and brother of Wang Zhuangpeng, holds 6 million shares of the company’s stock, all of which have been pledged.
Despite a series of rescue efforts, Songyang Resources has finally reached the desperate situation of being put up for sale in the midst of China’s economic downturn.