Zhejiang Tonghuashun Cloud Software Co., Ltd. (Tonghuashun) announced on September 4th that the major shareholder of the company will reduce their holdings, with the chairman stating the reason for the reduction as “to provide market participation opportunities.” This explanation has sparked dissatisfaction among investors.
On September 6th, Tonghuashun issued a “Notice on the Pre-disclosure of Reduction of Shares by Controlling Shareholders and Shareholders Holding Over 5%,” stating that the controlling shareholder and actual controller, Yi Zheng, along with the shareholder holding over 5%, Hangzhou Kaishishun Technology Co., Ltd. (Kaishishun), plan to reduce their holdings by a total of no more than 1,383,100 shares (0.26% of the total share capital) through centralized bidding or block trading within three months after 15 trading days from the date of the notice (September 29, 2025, to December 28, 2025).
The announcement indicated that Yi Zheng is the controlling shareholder, actual controller, and chairman of Tonghuashun. Yi Zheng intends to reduce his holdings by no more than 684,000 shares, accounting for 0.13% of the total share capital. Following this reduction, the actual controller’s shareholding ratio will be 36.00%, with no significant change in control.
Regarding the reasons for the reduction, the announcement stated that Kaishishun did so due to its own capital needs, while Yi Zheng’s reasons for reducing holdings were twofold: first, the “interim increase target has been successfully achieved,” and second, to “provide market participation opportunities, release liquidity, and activate market vitality.”
Many investors have expressed their opinions on social media platforms. Some investors commented, “Intellectuals speak differently.” “Describing selling high and buying low in such a dignified and noble manner is truly the art of language.” “Just reduce holdings, but the way it’s said sounds like a favor to us.”
Some investors also expressed concerns about the future stock price trend, stating, “This stock is overvalued by too much.”
According to news from Red Star News of Chengdu Business Daily on September 7, since September 24, 2024, Tonghuashun’s stock price has accumulated a growth rate of over 250%, reaching a historical high of 426.88 yuan per share on August 18 this year. The latest closing price on September 5 was 361.50 yuan per share. Based on the latest closing price, the 55-year-old actual controller Yi Zheng has a net worth of 70 billion yuan.
Additionally, according to news from Daily Economic News on September 7, in April 2022, Tonghuashun’s chairman spent 50.099 million yuan to increase holdings of 684,000 shares, the same amount as the shares being reduced this time. At that time, Tonghuashun’s stock price was around 72.6 yuan, and the current value of these shares has reached 247 million yuan, with a profit of nearly 200 million yuan.
Not only has the largest shareholder Yi Zheng reduced holdings, but in December last year, the company’s third-largest shareholder Kaishishun also reduced 2.688 million shares, with a total reduction value of 867 million yuan. Since the beginning of this year, the second-largest shareholder Ye Qiongjiu (current director and deputy general manager of the company) has also completed a combined reduction of 2 million shares (0.37% of the total share capital) at an average reduction price of 318.87 yuan, with a total reduction value of 638 million yuan.
Regarding the shareholders’ reductions, some internet users believe that “being indifferent” means, “When the company reduces holdings, it shows lack of confidence in the company and operational risks. Retail investors should not listen to them and stay away, far away.”
Others express their thoughts, with “Being indifferent and having clear aspirations, seeking far-reaching tranquility” stating, “I always thought that companies go public to fund development, but now it feels like a platform for a small group of people to arbitrage.”