On June 17, Guangdong Songfa Ceramics Co., Ltd. (*ST Songfa) issued an announcement stating that its subsidiary Hengli Shipbuilding (Dalian) Co., Ltd. received a total of RMB 120 million (approximately US$17 million) in asset-related government subsidies on June 16, 2025.
According to the announcement, the subsidy will be recognized as deferred income, and the specific accounting treatment and its impact on the company’s profit and loss and assets in 2025 are subject to the results of the annual audit confirmation by the auditing agency.
*ST Songfa stated that the subsidy will have a positive impact on the company’s financial situation, but the announcement reminded investors to pay attention to related risks, and the specific impact still needs to be evaluated based on the audit results.
It is understood that the highly anticipated Hengli Heavy Industry began to disclose listing-related information in 2024.
On September 30, 2024, Songfa shares announced that it had signed a “major asset reorganization intention agreement” with Suzhou Zhongkun Investment, agreeing to carry out a major asset restructuring. Songfa intends to sell part or all of its assets and liabilities through one or more combinations of asset sales, asset replacements, etc., and also intends to purchase a number of shares of Hengli Heavy Industry Group Co., Ltd. or a number of shares of Hengli Heavy Industry’s subsidiaries through one or more combinations of asset replacements, issuing shares to purchase assets, etc.
On October 16, Songfa issued the announcement of “plan for major asset replacement and issuance of shares to purchase assets and raise matching funds”. The announcement disclosed that Songfa intends to purchase 100% of the equity of Hengli Heavy Industry Group Co., Ltd. (Hengli Heavy Industry) held by the counterparty through major asset replacement and issuance of shares to purchase assets, and issue shares to no more than 35 specific investors to raise matching funds. This move means that Hengli Group’s shipbuilding business will enter the capital market.
On December 1, 2024, the restructuring plan of Hengli Heavy Industry was released. Songfa intends to purchase 100% of the equity of Hengli Heavy Industry held by Zhongkun Investment, Suzhou Hengneng, Hengneng Investment and Chen Jianhua by means of major asset replacement and issuance of shares to purchase assets, and issue shares to no more than 35 specific investors to raise supporting funds. The total amount of supporting funds raised in this restructuring shall not exceed RMB 4 billion.
On April 18, 2025, the Shanghai Stock Exchange Merger and Acquisition Review Committee held the 6th Merger and Acquisition Review Committee meeting in 2025 to review the asset restructuring of Songfa. According to subsequent news from the Shanghai Stock Exchange, Hengli Heavy Industry was approved at the meeting.
On May 16, Songfa announced that it had received the “Approval on the Registration of Guangdong Songfa Ceramics Co., Ltd. to Issue Shares to Purchase Assets and Raise Supporting Funds” issued by the China Securities Regulatory Commission. The receipt of this approval marks a key progress in the listing process of the private shipyard Hengli Heavy Industroes on the A-share market.
On May 26, Songfa issued an announcement, announcing that its issuance of shares to purchase assets has made significant progress. The registration procedures for the new shares issued by it to purchase assets have been completed, and it has obtained the “Securities Change Registration Certificate” issued by the Shanghai Branch of China Securities Depository and Clearing Corporation Limited (CSDC).
It is reported that Songfa was mainly engaged in the research and development, production and sales of daily-use ceramic products. Its main products include daily-use porcelain, fine porcelain and ceramic wine bottles. After the transaction is completed, Songfa will strategically withdraw from the daily-use ceramic products manufacturing industry, and Hengli Heavy Industry will become a wholly-owned subsidiary of the listed company. The company’s main business in the future will be the research and development, production and sales of ships and high-end equipment.
Hengli Heavy Industry has been fully operational since the beginning of 2023, and is committed to building a world-class high-end, intelligent, and green shipbuilding and high-end equipment manufacturing company, covering multiple business links such as independent engine production and shipbuilding. It has comprehensive competitive advantages in leading technology, advanced equipment, and integrated industrial chain.
At present, Hengli Heavy Industry has the production and manufacturing capabilities of high-end ships such as bulk carriers, tankers, container ships and gas tankers, and is committed to becoming a manufacturing industrial base with the ability to produce high-value-added ships and high-end equipment such as VLCC, VLOC, VLGC, ultra-large container ships, LNG gas tankers, FLNG, FPSO, semi-submersible drilling platforms, etc.