Finance Association News, October 29th (Reporter Luo Yichen): Seizing the opportunity of Tesla's localization, Ningbo Xusheng Group (603305.SH), which has developed rapidly in the past few years, suddenly announced a major news today. The company's controlling shareholder Xu Xudong and concerted parties are planning to transfer their holdings, which may lead to a change in control of the company. As a result, the company's stocks and convertible bonds will be suspended from October 30th.

Ningbo Xusheng Group was established in 2003, mainly engaged in the research and development, production, and sales of precision aluminum alloy auto parts and industrial components. The company went public on the A-share market in 2017. Around 2013, the company was the first to enter the Tesla supply chain, becoming a crucial part of Tesla's localization. Thanks to its early layout in new energy automobile production lines, Ningbo Xusheng Group has emerged as a leading enterprise in the domestic integrated die-casting industry. In 2023, the company's net income attributable to shareholders reached 0.714 billion yuan, achieving its best historical performance. However, the year-on-year growth rate was less than 2%, indicating a significant slowdown in growth.

Entering 2024, Ningbo Xusheng Group's performance is further under pressure. The announcement released by the company tonight shows that in the first three quarters of this year, the company achieved revenue of 3.274 billion yuan, an 8.42% year-on-year decline; the net profit attributable to shareholders of listed companies was 0.323 billion yuan, a year-on-year decrease of 42.83%. Looking at the quarterly performance, the net profit attributable to shareholders has declined quarter by quarter in the first three quarters, with the net profit in Q3 being less than 59 million yuan, representing a 65.96% year-on-year decrease.

Regarding the decline in performance, the company stated that it is mainly due to weaker-than-expected sales by some customers at the terminal, leading to a slight decrease in revenue. In addition, the increase in the price of the main raw material, aluminum ingot, has caused a decrease in gross margin. The increase in interest expenses for convertible bonds has also had an impact. Besides Tesla, the company's major customers include Mercedes-Benz, BMW, Volkswagen, Stellantis, BYD, Great Wall, Geely, NIO, Xpeng, Leapmotor, RIVIAN, LUCID, Polaris, and others.

Finance Association reporters noted that with the intensifying competition in the new energy automobile industry, upstream aluminum alloy component manufacturers are also facing difficulties. Among the major manufacturers, Ningbo Xusheng Group, Wencan Group (603348.SH), and IKD Co., Ltd. (600933.SH) are under pressure due to declining performance, while Rontai Group (605133.SH) is relatively better off, but its growth is also becoming weaker.

Perhaps due to the challenges facing the industry, Xu Xudong has ultimately decided to transfer the company's controlling stake after two decades of entrepreneurship. Information shows that 55-year-old Xu Xudong, besides serving as the chairman and general manager of Ningbo Xusheng Group, also holds positions as a director of Xuri Industrial, an executive director of Xusheng Holdings, and an executive director and manager of Lishui Xuyao Trading Co., Ltd. Xu Xudong directly holds 12.41% of Ningbo Xusheng Group's shares and indirectly holds 34.47% through the company's largest shareholder Ningbo Meishan Free Trade Port Area Xusheng Holdings Co., Ltd., and the second-largest shareholder Hong Kong Xuri Industrial Co., Ltd., totaling 46.88% of the company's shares.

Prior to the announcement of the transfer of the company's controlling stake, Xu Xudong's shares were not pledged, marked, or frozen. However, in the past few years, Xu Xudong has reduced his holdings several times and has issued apology announcements for violations in reducing holdings.