Shunfeng Holding Co., Ltd. (Shunfeng Holdings) saw a three-day consecutive decline in its stock price starting from August 29, resulting in a market value evaporating by 33 billion yuan. The primary reason for the continuous drop in the company’s stock price was the introduction of the “Common Growth” equity incentive plan.
On the evening of August 28, Shunfeng released a draft of the “Common Growth” equity incentive plan (A share). The plan proposed by Chairman Wang Wei suggested that the controlling shareholder donate 200 million shares worth around 9.7 billion yuan for the “Common Growth” equity incentive plan. The plan aims to provide up to 200 million shares of equity incentives to employees at no cost, with the total value of these shares close to 9.68 billion yuan based on the stock price at the time of the announcement.
The “Common Growth” equity incentive plan includes not only directors, supervisors, and core management personnel but also grassroots employees such as delivery and operational staff. The participation threshold is relatively low, with performance assessment criteria at the company level being only a positive net profit growth rate for the year. At the individual level, recipients with performance ratings of A or B can receive equity incentives, with only differences in allocation ratios.
However, the plan raised doubts among investors immediately upon its release. Many shareholders expressed their concerns on investor communication platforms, suggesting that the equity incentive plan featuring the donation of 200 million shares by Shunfeng’s controlling shareholder has overly lenient performance criteria. They also questioned the substantial amortization expenses resulting from this plan, which would be shared by all shareholders, leading to the notion of “benefits for employees, costs borne by shareholders” and potentially undermining shareholder interests.
On the same day, August 28, Shunfeng Holding also published its “2025 Interim Financial Report.” The report revealed that the company achieved record-high performance in the first half of this year, with revenue reaching 146.858 billion yuan, a year-on-year increase of 9.26%. The net profit attributable to the parent company was 5.738 billion yuan, a year-on-year growth of 19.37%.
However, the positive performance failed to boost Shunfeng Holdings’ stock market value. On August 29, September 1, and September 2, the company’s stock price declined by 7.91%, 3.97%, and 2.29% respectively. According to a report from The Paper on September 4, during these three days, Shunfeng Holdings’ market value evaporated by over 33 billion yuan.
In response to this, Shunfeng Holdings stated to The Paper on September 3 that the fluctuations in its stock price have little to do with the equity incentive plan. They clarified that the plan is a positive initiative, as the shares used come from the controlling shareholder’s donation, and do not result in any dilution for other minority shareholders.
On September 3, Shunfeng Holdings addressed the reasons for the continuous decline in stock price on an investor interaction platform, attributing the secondary market price fluctuations to multiple factors like macroeconomic conditions, industry policies, market sentiment, and capital conditions.
As of the A-share market closing on September 4, Shunfeng Holdings’ stock price had dropped by 0.74%.