Bubugao and Meihua Venture Capital's Wu Shichun have successively entered the scene, while ST Zhongzhu's "Dong Gao" has undergone intensive personnel changes.

Can AI help new investors completely solve the capital occupation problem of ST Zhongzhu?

The image appears to be AI-generated.

“Bubugao” Acquisition Record ①

In just one year, Zhang Yuan, the actual controller of Suzhou Bubugao Investment Development Co., Ltd. (hereinafter referred to as “Suzhou Bubugao”), has frequently made moves in the A-share market, consecutively acquiring the actual control of multiple listed companies, including Daqian Ecology (603955.SH), Liyuan Co., Ltd. (002501.SZ), and ST Zhongzhu (600568.SH).

These companies had previously fallen into difficulties due to issues such as poor performance, financial fraud, and capital occupation by actual controllers. After Zhang Yuan took control, he adopted measures such as adjusting and restructuring operational strategies, reshuffling management, providing continuous financial support, and positioning in sunrise industries, attempting to reconstruct their value.

Currently, Daqian Ecology has achieved a doubling of operating income by entering the pet industry, with a year-on-year growth rate expected to exceed 179.06%. However, profits are still in need of recovery due to the new business being in the investment phase; Liyuan Co., Ltd. is maintaining basic operations through financial support but has not yet truly emerged from its predicament.

As for ST Zhongzhu (Zhongzhu Medical), recently, with Wei Shichun from Meihua Venture Capital entering with 403 million yuan in cash, a new solution seems to be emerging for the core issue of shareholder capital occupation. Combined with performance forecasts and the third-quarter report, the company’s financial condition also shows signs of steady improvement. Of course, whether it can finally shake off historical burdens and whether quality businesses in medical devices and hospitals can continue to perform well needs ongoing attention.

Wei Shichun enters with 403 million yuan; previously worked at Huawei and Baidu

Since 2026, two announcements released by ST Zhongzhu have attracted attention.

The above image is taken from an announcement related to ST Zhongzhu.

On March 13, the “Resolution Announcement of the First Extraordinary Shareholders’ Meeting of 2026” indicated that Wei Shichun was successfully elected as a non-independent director of the company. Wei Shichun graduated from Jilin University with a bachelor’s degree in materials science. He has served as a technical engineer at Huawei Technologies Co., Ltd., a senior engineer and R&D testing manager at Baidu Online Network Technology (Beijing) Co., Ltd., and founded Beijing Shangzhixun Software. He is also a co-founder of Beijing Kuxun Technology Co., Ltd. and Beijing Jidiaowang Co., Ltd., possessing a strong technical background and industrial experience. Additionally, he is the founding partner of Ningbo Meihua Angel Investment Management Co., Ltd. (hereinafter referred to as “Meihua Venture Capital”).

According to its official website, Meihua Venture Capital was established in 2014 and is one of the most active early-stage investment institutions in China, managing approximately 10 billion yuan in RMB funds and about 100 million USD in dollar funds, focusing on sectors such as new energy, semiconductors, military industry, digitization, intelligent manufacturing, and commercial aerospace. It has covered over 600 companies, with more than ten portfolio companies having completed IPOs.

On January 24, ST Zhongzhu announced that Qiongqing City Meihua Tenglong Qifei Investment Partnership (hereinafter referred to as “Meihua Investment”) purchased a total of 10.38% of ST Zhongzhu’s shares from Guangzhou Yunying Capital Management Co., Ltd. and individual Zheng Zixian at a price of 1.95 yuan per share, totaling 403 million yuan, becoming the second-largest shareholder of the company. The actual controller of Meihua Investment is Wei Shichun.

The combination of these two announcements suggests that Wei Shichun may not be a financial investor and may deeply participate in the management layout of ST Zhongzhu. Meihua Investment’s actions could complement Meihua Venture Capital’s focus on early-stage investment, creating the possibility of linking their operations. However, this is a later consideration; the medical field is not a primary focus for Meihua Venture Capital, and if they venture into it, it will also involve new challenges such as resource integration.

“Bubugao” acquires equity and debt for 30 million yuan; “Donggao” has undergone intense reshuffling

On November 26, 2025, the “Detailed Report on Equity Changes” indicated that Suzhou Bubugao acquired all shares of ST Zhongzhu’s original largest shareholder, Shenzhen Landi Technology Development Co., Ltd. (hereinafter referred to as “Landi Technology”), for 30 million yuan, thereby indirectly holding 19.08% of the listed platform’s shares.

Suzhou Bubugao has deep ties to Duan Yongping. ST Zhongzhu’s announcement shows that Zhang Yuan previously served as a director of Guangdong Bubugao Electronics Industry Co., Ltd. (hereinafter referred to as “Bubugao Electronics”), which was founded by Duan Yongping in 1995. Zhang Yuan currently serves as the executive director of Jiangsu Baisheng Electronics Co., Ltd. (hereinafter referred to as “Jiangsu Baisheng”) and a non-executive director of Jitu Express Global Ltd. Jiangsu Baisheng is a channel partner for vivo mobile phones, and Duan Yongping’s brother, Duan Liping, is the second largest shareholder of Jiangsu Baisheng. Jitu Express’s leader, Li Jie, has a “master-disciple” relationship with Duan Yongping, who has also invested in Jitu Express.

Zhang Yuan is also regarded as one of Duan Yongping’s students. At the end of 2024, Zhang Yuan successfully took control of Daqian Ecology and became its chairman. By the end of 2025, Zhang Yuan resigned, and Duan Liping took over, this transition coinciding with Suzhou Bubugao’s acquisition of Landi Technology.

Based on current prices, the shares of ST Zhongzhu held by Landi Technology correspond to a market value of approximately 1.079 billion yuan, suggesting that Zhang Yuan seems to have gotten a great deal. However, the shares held by Landi Technology are essentially pledged, corresponding to a loan balance of 610 million yuan. Back in September 2024, all of Landi Technology’s shares had already been judicially frozen. According to relevant agreements, after the transfer is completed, the related debts will also be transferred.

In February 2025, Zhang Yuan, through Jiangsu Bubugao Real Estate (hereinafter referred to as “Jiangsu Bubugao”), used a “low-price acquisition of equity + assumption of large debts” approach when acquiring shares of Liyuan Co., Ltd. Since the completion of the transaction, Jiangsu Bubugao has provided a total of 100 million yuan in financial support to Liyuan Co., Ltd. through interest-free loans in four installments, along with 50 million yuan in interest-bearing loans.

During the equity changes, over the past six months, ST Zhongzhu’s “Donggao” has undergone a deep reshuffle.

According to the announcement, from August 2025 to now, Zhang Weibin has resigned as the company’s vice president and board secretary, Zeng Yucheng has resigned as vice president, Chen Jiang has stepped down as executive vice president and will no longer serve as a non-independent director, and Wu You will no longer serve as a non-independent director. At the same time, Liu Huiping has been newly appointed as vice president, Fang Weiyi as a non-independent director, Zheng Yingyi as an independent director, and Zhang Yusong as the new board secretary. In addition, as mentioned earlier, Wei Shichun has taken several key positions in the ST Zhongzhu board and management. Moreover, according to the latest laws and regulations, in September 2025, ST Zhongzhu has canceled its supervisory board.

Company performance rebounds; how to resolve the historical issue of 567 million yuan?

ST Zhongzhu’s main business is divided into two major sectors: pharmaceuticals and real estate. In 2021, 2022, 2023, and 2024, the gross profit margins of the company’s real estate business were 24.27%, 10.16%, 10.46%, and -10.66%, showing a significant decline. As a result, during the aforementioned reporting periods, ST Zhongzhu’s operating revenues were 581 million yuan, 506 million yuan, 638 million yuan, and 521 million yuan, respectively; the non-net profit was -215 million yuan, -778 million yuan, -372 million yuan, and -623 million yuan, remaining in a long-term loss state.

In light of this, the company has recently begun to focus on its core business by actively shrinking its real estate sector, accelerating the de-risking of existing assets, releasing funds to support its pharmaceutical business, and promoting a strategic layout centered on pharmaceutical manufacturing as the core driving force, medical services as a key support, and medical devices as an innovative growth engine.

In the first three quarters of 2025, ST Zhongzhu’s operating revenue was 433 million yuan, a year-on-year increase of 12.82%; it suffered a loss of 25 million yuan, with the loss margin narrowing by 68.53% year-on-year. Additionally, at the end of the reporting period, the company’s cash and cash equivalents amounted to 437 million yuan, with both short-term and long-term borrowings being zero, indicating relatively sufficient funds. According to performance forecasts, for the full year of 2025, the company is expected to report a non-net profit loss of between 160 million yuan and 110 million yuan, a significant reduction compared to the loss of 623 million yuan in the previous year.

The trend of ST Zhongzhu’s non-net profit over the years. (Source: Tonghuashun)

Of course, the core issue for ST Zhongzhu to return to a normal development track lies in the long-standing issue of shareholder capital occupation.

Zhongzhu Medical’s largest shareholder was originally Zhuhai Zhongzhu Group Co., Ltd. (hereinafter referred to as “Zhongzhu Group”). In 2016, Zhongzhu Medical acquired 100% of the equity of Shenzhen Yiti Investment Holdings Group Co., Ltd. (hereinafter referred to as “Yiti Group”) for 1.9 billion yuan, making Yiti Group the second-largest shareholder of Zhongzhu Medical.

From 2020 to 2022, both Zhongzhu Group and Yiti Group fell into debt crises, and their shares in Zhongzhu Medical were continuously auctioned, allowing Landi Technology to become the new largest shareholder. On June 1, 2020, Zhongzhu Medical was also directly placed under delisting risk warning due to continuous losses, leading to its designation as “*ST Zhongzhu”.

In April 2021, the “Special Explanation on the Fund Occupation Situation of Controlling Shareholders and Other Related Parties” showed that as of the end of 2020, Zhongzhu Group and its related parties occupied a total of 602 million yuan in funds from the listed company through accounts receivable and other receivables. As a result, in May of the same year, the delisting risk warning was lifted, but other risk warnings continued to be implemented, and the stock name was changed to “ST Zhongzhu,” which remains to this day.

According to the “Announcement on Abnormal Fluctuations in Stock Trading” released on March 11, 2026, as of the end of 2024, the balance of funds occupied by Zhongzhu Group and its related parties was 567 million yuan, of which the principal was 496 million yuan.

According to an analysis by the “Breakthrough Team,” led by senior partner Wang Shujun from Huiye Law Firm, in the article “Path Analysis from ST Zhongzhu’s Investment Dilemma to the Resolution of Related Party Non-Operational Fund Occupation Issues” (hereinafter referred to as “Solution Path Article”), it is noted that the situation of fund occupation in ST Zhongzhu has its particularities.

On the one hand, the internal control audit reports for the years 2022 to 2024 showed that the conclusion by Dahua Accounting Firm (Special General Partnership) was that Zhongzhu Medical had “maintained effective financial reporting internal controls in all significant aspects during the audit period in accordance with the ‘Basic Norms for Enterprise Internal Control’ and relevant provisions.” This indicates that the other risk warnings arising from internal control audit issues have been resolved.

On the other hand, the implementation of other risk warnings by the listed company does not necessarily lead to delisting; however, it severely affects the company’s valuation and financing, including limits on price fluctuations, restrictions on financing and margin trading, and institutional investments. Furthermore, based on past experience, the risk warnings will only be lifted after the funds are repaid.

Getting Zhongzhu Group to repay is not an easy task. Zhongzhu Group has long been mired in debt, and in August 2023, its actual controller was arrested on suspicion of embezzlement. On August 28, 2025, ST Zhongzhu announced a comprehensive default on Zhongzhu Group and its related parties’ repayment commitments. On March 19, 2026, ST Zhongzhu stated on the Shanghai Stock Exchange’s interactive platform that, since Zhongzhu Group has not fulfilled its repayment obligations as stipulated in the “Civil Mediation Agreement,” the company has filed for enforcement with the court.

The “Solution Path Article” proposed another resolution idea — that Meihua Investment and Suzhou Bubugao, based on the payment of equity consideration, may still need to eliminate related party fund occupation issues through “real cash” in cash or other regulatory-compliant methods and procedures, achieving the lifting of risk warnings and valuation recovery for the listed company. If so, the actual investment cost for investors will be much higher than the current cost of acquiring shares, and regardless of how they exit in the future, they will certainly set higher investment return expectations.

Caesar Tourism (000796.SZ) faced a similar situation where the original major shareholder and related parties could not repay occupied funds due to a debt crisis, ultimately leading to other financial investors compensating with 386 million yuan in cash, successfully resolving the issue.

Of course, both investment institutions chose ST Zhongzhu as an investment target for turnaround, possibly due to the company’s relatively healthy asset-liability structure and the impact of risks associated with the original shareholders Zhongzhu Group and Yiti Group being mired in debt crises and unresolved related party fund occupation issues on the current company valuation. If they can successfully resolve the related party fund issues and the company achieves a delisting removal while effectively revitalizing existing medical sector assets through asset and business integration, there is significant potential for valuation recovery for the listed company in the future.

According to the latest developments, Suzhou Bubugao still needs to resolve share pledge and freezing issues related to the transaction, while the shares acquired by Meihua Investment have already been transferred, with Wei Shichun having made a substantial bet.

Written by: Nandu N Video Reporter Miao Lingyun