Economic Observer reporter Tian Guobao

On the evening of May 10th, Huaxia Happiness (600340. SH, * ST Huaxing) announced that the core management team, including Chairman Wang Wenxue, plans to increase their holdings of the company's shares through centralized bidding trading on the Shanghai Stock Exchange system within three months from May 11th, with a total increase of no less than 5 million yuan and no more than 6 million yuan.

According to the announcement, the core management plans to increase their holdings in order to "actively promote the company's pre restructuring related matters, firmly support the company's risk resolution and continuous operation work, and effectively protect the legitimate rights and interests of all shareholders and creditors of the company".

On November 17, 2025, Huaxia Happiness announced that creditor Long Cheng Construction applied to Langfang Intermediate People's Court for restructuring Huaxia Happiness and also applied to initiate pre restructuring procedures. The Langfang Intermediate People's Court accepted the application and designated the Huaxia Happiness Judicial Restructuring and Liquidation Group as the temporary administrator during the company's pre restructuring period.

During the process of Huaxia Happiness's pre restructuring, on May 6, 2026, its stock was subject to delisting risk warnings and other risk warnings, casting a shadow over the pre restructuring.

A person from Huaxia Happiness told the Economic Observer that once delisted, Huaxia Happiness will lose the opportunity to achieve rebirth through restructuring and will inevitably go bankrupt and liquidate. So, by increasing holdings to stabilize the stock price and buy time for pre restructuring, the ultimate goal is to preserve the shell.

Increase Holdings Plan

According to the announcement, the shareholders of Huaxia Happiness's stock increase this time include Chairman Wang Wenxue, President Zhao Wei, Director and Co President Chen Huaizhou, Employee Director Zhuang Yong, CFO Zhong Jian, and Board Secretary Li Yushan. We plan to increase our holdings with our own funds through centralized bidding trading within three months from May 11, 2026.

As of now, Wang Wenxue directly holds 18.5906 million shares of Huaxia Happiness, accounting for 0.475% of the total share capital; Zhao Wei holds 2.8045 million shares, Chen Huaizhou holds 2.7418 million shares, Zhong Jian holds 1.041 million shares, and Li Yushan holds 494200 shares. There is no price range set for this increase in holdings, and the increase plan will be implemented based on the recent price fluctuations of the stock and the overall trend of the capital market.

This is not the first time that the management of Huaxia Happiness has increased its holdings. In June 2024, Huaxia Happiness released a plan for some directors and executives to increase their shareholdings, with a total of 7 executives increasing their shareholdings by no less than 5 million yuan and no more than 6 million yuan; On July 3, 2024, Wang Wenxue announced an increase in his holdings of Huaxia Happiness shares by no less than 10 million yuan and no more than 11 million yuan. On July 10, 2024, this round of increase in holdings plan was completed.

On July 11, 2024, Wang Wenxue announced again that he would increase his shareholding by no less than 10 million yuan and no more than 12 million yuan. The second round of increase in holdings will be completed in January 2025.

This is the third time since the outbreak of the liquidity crisis at Huaxia Happiness in 2021 that core executives have increased their holdings of listed company stocks.

Shell Protection

In February 2021, Huaxia Happiness announced a debt default; In September of that year, Huaxia Happiness announced a debt restructuring plan with a total scale of 219.2 billion yuan.

Due to the rapid changes in the real estate situation, the progress and implementation of Huaxia Happiness's debt restructuring plan have been hindered to varying degrees, and substantial progress has yet to be made. This also means that Huaxia Happiness wants to resume normal operations, and the path of debt restructuring is no longer feasible.

Since 2024, the management of Huaxia Happiness has begun to consider the possibility of restructuring. In November 2025, after Huaxia Happiness announced its upcoming pre restructuring, it faced fierce opposition from its largest shareholder, Ping An Group. At that time, Ping An Group stated that the restructuring of Huaxia Happiness had not been negotiated with them in advance.

According to sources close to Huaxia Happiness, Huaxia Happiness and Ping An Group have reached a consensus on the restructuring work, and some potential restructuring investors have submitted registration materials to the temporary manager.

On April 30, 2026, Huaxia Happiness issued a notice on the implementation of delisting risk warning and overlay of other risk warnings and suspension of trading for the company's stocks, stating that after audit, the net assets attributable to shareholders of the listed company at the end of 2025 were negative. At the same time, the company's net profit after deducting non recurring gains and losses for three consecutive accounting years was negative. The annual audit institution also issued an audit report on the company's 2025 financial report with significant uncertainty in continuing operations.

According to the Shanghai Stock Exchange Listing Rules, Huaxia Happiness stock has been subject to delisting risk warning and other risk warnings since May 6th, and the stock abbreviation has been changed from "Huaxia Happiness" to "* ST Huaxing".

On the evening of May 9th, Huaxia Happiness once again disclosed abnormal fluctuations in stock trading, stating that there is a risk of reaching the termination of listing conditions in 2026.

According to the regulations of the exchange, if the closing price of a listed company's stock is below 1 yuan for 20 consecutive trading days, its listing qualification will be terminated.

On May 11th, the stock price of Huaxia Happiness closed at 1.11 yuan per share, with a total market value of less than 4 billion yuan. Compared to the peak market value of over 200 billion yuan around 2017, the market value has shrunk by more than 98%.