On April 27, Songfa Co., Ltd., the listed entity of Hengli Heavy Industries, announced that its subsidiary, Hengli Shipbuilding, plans to purchase an office building in the Shanghai Hongqiao Business District for approximately 400 million yuan (about $59 million) to serve as its Shanghai R&D center. At the same time, Songfa released its first-quarter report for 2026.
The announcement disclosed that the company completed a major asset restructuring in 2025. Following the restructuring, the company’s asset scale, asset quality, and profitability have all improved significantly. As the company’s business expands rapidly and its global expansion accelerates, the size of the existing R&D team, as well as its office environment and facilities, no longer meet the needs of the company’s global development strategy.
To optimize R&D office conditions and attract top talent from the global shipbuilding industry, and after comprehensive consideration of factors such as location, transportation, and supporting facilities, Hengli Shipbuilding (Dalian) Co., Ltd. (hereinafter referred to as “Hengli Shipbuilding”), a subsidiary of Songfa Co., Ltd., intends to use its own funds and a portion of raised capital to purchase the property located at No. 5, Lane 58, Hengli (Shanghai) Xingang International Center, Lane 58, Shenbin South Road, Minhang District, Shanghai, held by Shanghai Hengli Smart Construction Co., Ltd. (hereinafter referred to as “Hengli Smart Construction”), to serve as the office building for its Shanghai R&D Center.
The property to be acquired is a 9-story reinforced concrete office building with a gross floor area of 7,991.54 square meters. Located in the heart of Shanghai’s CBD and a major transportation hub, it offers a prime location with excellent accessibility and comprehensive supporting facilities. This property aligns with the strategic direction of the company’s R&D center, facilitating further resource integration and enabling the company to better attract and retain high-caliber, senior talent, thereby enhancing the company’s brand value and social influence.
According to the announcement, the main construction of the office building has been completed, and work is currently underway on interior finishing and the installation and commissioning of equipment. The project is expected to be completed and delivered in December 2026. The proposed transaction price is 395.49 million yuan, of which 92 million yuan is to be funded using raised capital.
Driven by strong performance in its shipbuilding business, the company reported first-quarter revenue of 8.888 billion yuan (approximately $1.301 billion) and net profit attributable to shareholders of 1.093 billion yuan (approximately $160 million), both of which saw significant year-over-year growth.
Songfa stated that the growth in its performance is primarily attributable to the overall strong momentum in the shipbuilding industry and the steady expansion of the company’s operations. As the number of ships under construction and delivered continues to rise, the economies of scale in the shipbuilding business are increasingly coming into play. Combined with the gradual optimization of the company’s product mix, these multiple factors are collectively driving a steady improvement in the company’s operating performance.