Anhui State-Owned Capital Makes Cross-Provincial Move, Wanwei Proposes 7.1 Billion Acquisition of Shanshan, "PVA Leader + Polarizer Giant" Raises Monopoly Concerns

Source: Times Weekly Report Author: Guan Yue, Han Xun

Image source: TuChong

On the evening of March 19, “PVA leader” Wanyue High-Tech (600063.SH) disclosed its 2025 annual report. During the reporting period, the company achieved revenue of 8.012 billion yuan, a slight decrease of 0.22% year-over-year; net profit attributable to shareholders was 434 million yuan, up 17.39%.

Wanyue High-Tech’s annual report revealed a detail: the shareholding structure of the controlling shareholder, Anhui Wanyue Group Co., Ltd. (“Wanyue Group”), will change to be controlled by Anhui Conch Group Co., Ltd. (“Conch Group”).

Wanyue Group is planning to restructure and acquire Shanshan Shares (600884.SH). Once completed, it will become the controlling shareholder of Shanshan Shares, and Conch Group will become an indirect controlling shareholder of Shanshan Shares, with the Anhui State-owned Assets Supervision and Administration Commission (SASAC) as the ultimate actual controller.

Image source: Shanshan Shares Announcement

A capital restructuring spanning the chemical and new materials sectors is quietly advancing. If all these transactions are realized, Conch Group will acquire two listed companies—Wanyue High-Tech and Shanshan Shares—along with five other listed companies it already controls—Conch Cement (600585.SH), Conch New Materials (000619.SZ), Conch Venture (00586.HK), Conch Environmental Protection (00587.HK), and Conch Material Technology (02560.HK). The “Conch system” of listed companies will total seven.

However, Conch Group faces significant challenges, including balancing various interests, regulatory approvals, and monopoly risks.

To learn more about the details of this restructuring, Times Weekly reporters contacted Shanshan Shares, Wanyue High-Tech, Wanyue Group, and Conch Group on March 20, and simultaneously sent interview outlines.

Shanshan Shares responded, “Currently, as we are in the voting stage of the controlling shareholder’s creditor meeting, the company is not convenient for interviews. The company will maintain communication with the restructuring administrator of the controlling shareholder, pay attention to subsequent developments, and fulfill information disclosure obligations in a timely manner according to relevant regulations.” As of press time, other parties had not responded.

Anhui State-owned Assets intends to “take over” Ningbo private enterprises

The core of this capital strategy begins with a cross-provincial strategic merger and acquisition.

On February 9, 2026, Shanshan Shares announced that its controlling shareholder, Shanshan Group Co., Ltd. (“Shanshan Group”), and its wholly owned subsidiary Ningbo Pengze Trading Co., Ltd. (“Pengze Trading”), along with the restructuring administrator (appointed by Ningbo Yinzhou District People’s Court) and restructuring investors Wanyue Group and Ningbo Financial Asset Management Co., Ltd. (“Ningbo Jinzi,” a local AMC), signed the “Restructuring Investment Agreement.” If successful, control of the company will change hands, with Wanyue Group becoming the controlling shareholder and the actual controller of Anhui SASAC.

According to the agreement, Wanyue Group, as the core investor, will acquire Shanshan Shares for a total consideration not exceeding 7.156 billion yuan, through a combination of “direct purchase + long-term coordinated actions,” controlling 21.88% of voting rights: approximately 4.987 billion yuan for a direct purchase of 13.50% of shares at about 16…42 yuan per share; and through a “coordinated action agreement” with bankruptcy service trust, controlling the remaining 8.38% of voting rights within 36 months. Wanyue Group commits to a 36-month lock-up of the acquired shares and will recommend directors to the board, taking full charge of subsequent operations.

However, Wanyue Group itself is also undergoing a change of control.

On January 29, 2026, Wanyue High-Tech announced that Conch Group plans to increase capital with 4.9978 billion yuan in cash to acquire 60% of Wanyue Group’s shares, while Anhui Investment Group and Anhui State Capital Operation Holding Group will each transfer 20% of shares free of charge. After the transaction, Conch Group will become the controlling shareholder of Wanyue Group, but the actual control remains with Anhui SASAC.

If all these transactions are finalized, both Wanyue High-Tech and Shanshan Shares’ indirect controlling shareholder will become Conch Group, forming a vertical integration framework of “Anhui SASAC → Conch Group → Wanyue Group → Wanyue High-Tech + Shanshan Shares,” with Anhui SASAC as the ultimate controller of the Ningbo private enterprise.

On March 20, Lu Hong, founder of “M&A Expert,” told Times Weekly that the typical characteristics of state-owned enterprises—industry orientation, long cycles, strong compliance, and long decision-making chains—may conflict with AMC’s risk disposal, short-term clearing, and financial prioritization. The market-oriented, quick decision-making, and flexible incentive features of private enterprises also conflict with the extensive approval processes, strict accountability, and tenure systems of SOEs. The “regulatory culture” of SOEs and the “flexible culture” of private firms, along with differences in incentive mechanisms, evaluation systems, and risk tolerance, pose additional challenges.

Price monopoly concerns behind industry collaboration

Behind the capital strategy lies precise industry positioning.

Wanyue High-Tech and Shanshan Shares form the upstream and downstream of the optical industry chain, theoretically enabling deep collaboration in raw material supply, technological R&D, and capacity allocation. Shanshan’s two main businesses happen to fit into Anhui’s “core chip, display, automotive, and gas” industry map.

Tianyancha shows that Shanshan Shares was established in December 1992, located in Ningbo, Zhejiang Province, and listed on the Shanghai Stock Exchange main board in January 1996. Its core businesses are lithium battery anode materials and polarizer films.

The main products of Shanshan’s anode materials include artificial graphite, natural graphite, and silicon-based anodes, mainly used in new energy vehicles, consumer electronics, and energy storage, with potential connections to local companies like Guoxuan High-Tech (002074.SZ) and NIO.

More critically, Shanshan’s other major business is polarizer films, which are key optical membrane materials for display panels. They control the polarization direction of specific light beams, converting natural light into linearly or circularly polarized light, enabling screens to display images with higher clarity. These are widely used in TVs, monitors, and laptops.

Polyvinyl alcohol (PVA) optical films are the core raw materials for manufacturing polarizer films, accounting for about 15% of production costs. The performance of PVA directly affects the polarization effect and lifespan of polarizer films.

Wanyue Group, founded in 1969, is an important chemical, fiber, and new material manufacturing enterprise in Anhui Province and a leading company in China’s PVA industry. Its business revolves around PVA, with a complete industry chain: VAC—PVA—PVA fibers.

Its subsidiary, Wanyue High-Tech, is also listed on the A-share market. It has formed five major industry chains: “PVA-PVA optical film-polarizer,” “PVA-PVB resin-PVB film-safety glass,” “PVA/VAC-VAE emulsion-re-dispersible powder,” “PVA-high strength high modulus PVA fibers-green building materials,” and “molasses-biomass VAC-PVA-biodegradable water-soluble films-bio-based materials.” The “PVA-PVA optical film-polarizer” segment is directly related to Shanshan’s polarizer business.

Wanyue Group is a domestic leader in PVA optical films, while Shanshan, through acquiring LG Chem’s polarizer film business, has become a global giant in the industry. After integration, Shanshan’s polarizer business may achieve internal self-supply of PVA optical films, creating a domestic supply chain for “PVA optical film-polarizer.” As an upstream raw material supplier, Wanyue Group urgently needs stable, high-end downstream outlets for PVA capacity and pricing, which Shanshan can provide.

But a question remains: once Wanyue Group controls Shanshan, will the pricing power over upstream optical materials be reshaped?

Lu Hong told Times Weekly, “After the restructuring, the pricing power may tilt toward the integrated party.” Wanyue’s large domestic PVA market share, oligopoly position, and self-use model could lock in priority supply, cost advantages, and pricing dominance. Shanshan’s polarizer film has a high global market share and rigid PVA demand. “Post-closure, external PVA suppliers’ bargaining power could weaken, internal pricing could lower polarizer costs, squeezing industry profits.”

However, Lu Hong noted that pricing power is subject to regulatory and competitive constraints. Veteran investment banker Wang Jiyue also said that “it depends on the bargaining ability of both sides, not necessarily dominated by the integration party.”

Both companies hold over 15% market share

From another perspective, Wanyue Group’s acquisition of Shanshan Shares poses potential monopoly risks.

Wanyue High-Tech’s 2025 annual report states it is “the largest, most advanced, most complete product variety, and highest capacity PVA producer in China, with about 40% of the domestic market share; its capacity ranks first nationwide and among the top globally; high-strength high-modulus PVA fibers account for over 50% of domestic production, with about 35% international market share.”

According to the China Chemical Fiber Industry Association, the global PVA capacity is about 1.85 million tons per year, with an expected actual output of 1.2 to 1.25 million tons in 2025. Mainland China’s PVA output in 2025 is projected at about 850,000 tons, while Wanyue High-Tech’s PVA production in 2025 is 306,400 tons.

CINNO Research data shows that in the first half of 2025, Shanshan’s large-size LCD polarizer shipment share was about 34%, maintaining the global first place; its market share in LCD TV and LCD monitor polarizer segments also ranked first worldwide.

If this restructuring succeeds, Conch Group will control both the expansion of PVA optical film raw materials and downstream procurement. Will this “raw material + procurement” dual control trigger antitrust review?

Lawyer Wang Zhibin of Shanghai Minglun Law Firm told Times Weekly that Wanyue High-Tech and Shanshan Shares each hold high market shares upstream and downstream, and their combination at key nodes could attract antitrust scrutiny.

According to the Anti-Monopoly Law, business combinations with or likely to have the effect of eliminating or restricting competition are considered monopolistic behaviors. Factors to consider include “the market shares of the operators in the relevant market and their control over the market.”

The revised “Provisions on Prohibition of Monopoly Agreements” effective February 1, 2026, require that “the market shares of each party in the relevant market during each year of the agreement are below 15%.” Both Shanshan and Wanyue’s market shares appear to exceed this threshold.

Lawyer Wang Zhibin explained that if the parties reach an agreement like “Shanshan preferentially purchases Wanyue’s PVA,” it must be examined whether it causes market foreclosure. If the agreement leads Wanyue to refuse or restrict supplies of PVA to competitors, it could constitute a vertical monopoly agreement. If it only reflects a priority purchase relationship without substantially excluding other downstream firms from obtaining raw materials, it may not be illegal. The key is whether the agreement results in actual exclusion or restriction of competition. “Given the key market positions of both parties, the final approval by regulators might include conditions such as maintaining independent supply of PVA products or prohibiting discriminatory treatment to eliminate foreclosure effects.”

It’s also noteworthy that in June 2025, a consortium including Jiangsu Xinyangzi Trading Co., Ltd., Jiangsu Xinyangzi Ship Investment Co., Ltd., Xiamen TCL Technology Industry Investment Partnership (Limited Partnership), and China Orient Asset Management Co., Ltd. Shenzhen Branch was selected as the first restructuring investor for Shanshan Group.

However, due to creditors’ concerns that the original plan had a low repayment rate and lacked industry operational experience, the restructuring plan (draft) submitted by the administrator in October 2025 was not approved.

On March 2, the fourth creditors’ meeting for the merger of Shanshan Group and Pengze Trading’s bankruptcy restructuring was held online via the “PoLiZi” integrated management platform, with the agenda being the “Restructuring Plan (Draft)” for Shanshan Group and Pengze Trading.

According to regulations, creditors must complete voting by 17:00 on April 15, 2026 (“voting deadline”). Will this restructuring plan be approved smoothly? We will wait and see.