Autonomous driving "unicorn" plans to invest nearly 1.2 billion yuan in equity, triggering three consecutive stock limit-ups. Xinghui Environmental Materials reminds: The other party will not seek control within 36 months nor inject assets.

Everyday Economic News reporter｜Wu Zepeng｜Everyday Economic News editor｜Dong Xingsheng

A share transfer totaling nearly RMB 1.2 billion at the shareholder level has linked Star Hui Environmental Materials (SZ300834, share price RMB 43.49, market cap RMB 8.43B), whose main business in the Chaoshan area of Guangdong is polystyrene, with a “unicorn” company in the autonomous driving sector in Jiangsu.

A few days ago, Star Hui Environmental Materials issued an announcement stating that the company’s actual controller, the Chen family—Chen Yansheng, Chen Dongqiong, Chen Chuanghuang, and their acting-in-concert party Chen Yueping—signed share transfer agreements with two wholly-owned subsidiaries under the autonomous driving company Jiu Shi Smart (Zelos Group Inc.), planning to transfer some of the listed company equity indirectly held by them to the latter, with a total transaction consideration of approximately RMB 1.18B. Subsequently, starting from March 31, Star Hui Environmental Materials’ share price hit the “20CM” limit up for three consecutive trading days; as of the close on April 2, the cumulative gain over just three days reached as high as 72.79%.

A reporter from the Daily Economic News noted that the Chen family has a relatively high shareholding ratio in Star Hui Environmental Materials. Before the transfer, they jointly controlled 64.44% of the shares; after the transfer, they still hold 36.95% of the shares, while Jiu Shi Smart, in total, will receive 27.49% equity in Star Hui Environmental Materials.

It should be noted that the surge in the share price stands in sharp contrast to Star Hui Environmental Materials’ current fundamentals. The company’s trailing price-to-earnings (P/E) ratio is as high as 86.66 times, far exceeding the industry average. Financial data show that in the first three quarters of 2025, the company’s net profit attributable to the parent company fell by more than 40% year over year.

From March 31 to April 2, Star Hui Environmental Materials’ stock hit the daily limit-up for three consecutive trading days, with a cumulative gain reaching 72.79%. As of the close on April 2, the company’s share price was RMB 43.49 per share.

In the latest unusual-movement announcement issued on April 2, Star Hui Environmental Materials stated that as of that day, its trailing P/E ratio had reached 86.66 times, while the industry average trailing P/E ratio for the “C26 Chemical Raw Materials and Chemical Products Manufacturing” industry it belongs to was only 32.88 times, meaning the company’s P/E ratio differs significantly from that of peers in the same industry.

The reporter further found that the company’s fundamentals are indeed hard to describe as optimistic. In the first three quarters of 2025, Star Hui Environmental Materials achieved operating revenue of about RMB 1.0 billion, down 21.05% year over year; net profit attributable to the parent company was RMB 39.5681 million, down sharply 44.29% year over year. Regarding the decline in net profit, the company explained in its financial report that the main reason was that industry growth did not meet expectations; product price differentials narrowed, leading to a decline in gross margin.

Star Hui Environmental Materials’ main business is the R&D, production, and sales of the polymer synthetic material polystyrene (PS). The products are widely used in fields such as electronic and electrical appliances, toys, and household and daily-use packaging.

Although the company claims to be the largest polystyrene producer in South China, the industry faced challenges last year overall. Data show that in 2025, the domestic polystyrene market price in China trended downward. This directly affected the company’s profitability. In the first half of 2025, the gross margin of its one of the main products—general-purpose polystyrene (GPPS)—even fell to 0%.

It should be noted that since this year began, influenced by the situation in the Middle East, prices of polystyrene and others have increased significantly. According to data from Tonghuashun, on April 2, the spot price of polystyrene (PS) was RMB 11,466.67 per ton, while earlier this year its price once fell below RMB 8,000 per ton.

The trigger for this round of sharp stock-price rally was an announcement released by Star Hui Environmental Materials on the evening of March 30 regarding changes in the equity interests of the indirectly controlling shareholder.

The announcement disclosed that the actual controller, the Chen family—Chen Yansheng, Chen Dongqiong, Chen Chuanghuang, and their acting-in-concert party Chen Yueping—signed share transfer agreements with two wholly-owned subsidiaries under the autonomous driving company Jiu Shi Smart (Zelos Group Inc.), planning to transfer some of the listed company equity indirectly held by them, with a total transaction consideration of approximately RMB 1.18B.

Specifically, the transaction is divided into two parts. First, Chen Dongqiong will transfer 51% of the equity in Star Hui Environmental Materials’ shareholder Star Hui Synthetic Materials (Hong Kong) Co., Ltd. (hereinafter referred to as Star Hui HK), which it holds, to a company under Jiu Shi Smart, Zelos (Hongkong) Holding Limited (hereinafter referred to as Zelos HK), at a consideration of RMB 422 million. Second, Chen Yansheng, Chen Chuanghuang, and acting-in-concert party Chen Yueping will transfer, in aggregate, 45% of the equity in Guangdong Star Hui Holding Co., Ltd. (hereinafter referred to as Star Hui Holding), the controlling shareholder of Star Hui Environmental Materials, which they hold in aggregate, at a consideration of RMB 760 million, to Jiangsu Jiu Shi Zhixing Intelligent Technology Co., Ltd. After completion of the transaction, Jiu Shi Smart will indirectly hold 27.49% equity in Star Hui Environmental Materials.

It is worth noting that in order to carry out this transaction, Star Hui Holding will also undertake a “downsizing.” According to the agreement, Star Hui Holding will be split and continue to exist, with the exception of holding 39.28% of the shares of the listed company; all equity in other subsidiaries and investee companies, as well as real estate and creditor-debtor debts will be carved out to a newly established company. This means that what Jiu Shi Smart invests in is a “clean” platform that holds only equity in Star Hui Environmental Materials.

As the transferee, Jiu Shi Smart commits that within 36 months after the completion of the share transfer, it will not seek control of the listed company or actual control rights in any way, and there is no plan to inject assets into the listed company. However, judging from the situation of the stock price increase, the above commitments have not dampened investors’ enthusiasm for capital.

In fact, the transferee in this transaction, Jiu Shi Smart itself, is loaded with prestige. According to the company’s official website, Jiu Shi Smart is a globally leading autonomous driving technology company. Its business has already covered multiple countries and regions including China, Japan, South Korea, Singapore, the UAE, and Austria. It has established leading advantages and an absolutely leading market share in logistics fields such as postal services, express delivery, fast-moving consumer goods, fresh food, and catering.

In addition, the website news also mentions that in January this year, Jiu Shi Smart completed a strategic integration with the CaiNiao unmanned vehicle business. After the integration, Jiu Shi Smart operates both the “Jiu Shi” and “CaiNiao unmanned vehicle” dual brands. The total scale of the RoboVan fleet has exceeded 20k units in one fell swoop, becoming the world’s largest L4 autonomous driving logistics vehicle fleet.

For this equity investment, Jiu Shi Smart stated in its equity interest change report that it is “based on recognition of the listed company’s intrinsic value and optimism about the listed company’s future development prospects.”

Cover image source: Zhu Yu

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