Walnuclear Materials has seen its stock price surge nearly 100% this year due to the "eastern wind" of NVIDIA. However, amidst the strong stock performance, the company's chairman, Zhou Wenhe, along with his brothers Zhou Hongqi and Zhou Heli, as well as two senior executives, plan to collectively reduce their holdings by no more than 5.8955 million shares in the future. It is worth mentioning that Zhou Wenhe, Zhou Hongqi, and Zhou Heli are also brothers with the company's current largest shareholder, Zhou Heping, who was the former actual controller. Notably, from 2010 to 2016, Zhou Heping had already cashed out more than 2.5 billion yuan through Walnuclear Materials.

After the stock price reached a new high, the chairman and his three brothers, along with two senior executives, intend to form a group to reduce their holdings.

On August 7th, Walnuclear Materials announced that the company's chairman, Zhou Wenhe, shareholders Zhou Hongqi and Zhou Heli, deputy general manager Xiang Keshuang, and financial director Ma Kui plan to reduce their holdings by no more than 5.8955 million shares. If calculated based on the closing price of 14.61 yuan per share on the day of the announcement, the aforementioned five individuals can cash out more than 85 million yuan.

Advertisement

It should be noted that Zhou Wenhe, Zhou Hongqi, and Zhou Heli are brothers. The three of them also have a brotherly relationship with Zhou Heping, the current largest shareholder and former actual controller of Walnuclear Materials.

This year, Walnuclear Materials has been quite eye-catching in the secondary market. Its subsidiary's ability to mass-produce high-quality 400G and 800G high-speed communication lines, including DAC copper cables, has allowed it to "stick on" the NVIDIA concept.

Choice data shows that as of the date of the announcement, its secondary market stock price has risen nearly 100% this year. In addition, on July 30th, Walnuclear Materials' stock price reached a historical peak of 17.89 yuan per share.

The chairman, along with his brothers and senior executives, forms a group to reduce holdings.

On August 7th, Walnuclear Materials announced that Chairman Zhou Wenhe, shareholders Zhou Hongqi and Zhou Heli, deputy general manager Xiang Keshuang, and financial director Ma Kui plan to reduce their holdings by no more than 5.8955 million shares within three months after fifteen trading days from the date of the announcement, accounting for 0.473% of the total share capital.

According to Walnuclear Materials' announcement and the 2023 annual report, Zhou Wenhe, Zhou Hongqi, and Zhou Heli are brothers with the company's largest shareholder, Zhou Heping.

Furthermore, Zhou Wenhe, Zhou Hongqi, and Zhou Heli plan to reduce their holdings by no more than 3.2392 million shares, 2 million shares, and 315,900 shares, respectively, accounting for 25%, 74%, and 100% of their total personal holdings; the other two senior executives, Xiang Keshuang and Ma Kui, plan to reduce their holdings by no more than 231,900 shares and 101,300 shares, respectively, both accounting for 25% of their total personal holdings.If calculated based on the closing price of Wol Nuclear Materials on the announcement release date of 14.61 yuan per share, then the aforementioned five individuals could potentially "cash out" over 85 million yuan at most.

Wol Nuclear Materials mentioned in the announcement that this reduction is due to personal financial needs. At the same time, the company also claimed that this reduction has been communicated with the regulatory authorities, and currently, the major shareholder (Zhou Heping) has no intention of reducing holdings.

It is worth mentioning that Wol Nuclear Materials can be considered a major "bull stock" in the A-share market in 2024. Specifically, the company's stock price has once recorded a maximum increase of 130% within the year, and as of the announcement release date, it has still risen by nearly 100% within the year.

Behind the strong performance in the secondary market, to a certain extent, it is also due to Wol Nuclear Materials "boarding" the Nvidia concept.

It is reported that Wol Nuclear Materials' subsidiary, LeTing Zhilian, can mass-produce high-quality 400G, 800G high-speed communication lines including DAC copper cables; and Nvidia's new generation of AI chip GB200 will use copper connections to replace traditional optical connection schemes, which may have a positive impact on upstream copper cable manufacturers including the company in the future.

In addition to the copper cable-related wire business, Wol Nuclear Materials' main products also include electronic, power, and new energy businesses such as heat-shrinkable materials, cable accessories, separable connectors, electric vehicle charging guns, charging seats, in-vehicle high-voltage wiring harnesses, and high-voltage connectors. The 2023 annual report shows that the company's four major segments of wire, electronics, power, and new energy contributed profit proportions of 9.87%, 44.64%, 27.73%, and 14.64%, respectively.

Focusing on performance, Wol Nuclear Materials achieved a high growth rate in the first quarter of 2024, with the company's revenue increasing by 21.62% year-on-year to 1.389 billion yuan, and net profit attributable to non-controlling interests increased by 78.84% year-on-year to 173 million yuan.

However, according to the recently announced interim report forecast of Wol Nuclear Materials, the company's net profit attributable to non-controlling interests in the second quarter increased by 3.61% to 49.82% year-on-year, and the growth has slowed down compared to the first quarter.

Becoming a "cash machine" for shareholders

Looking back at history, Zhou Heping, the current largest shareholder of Wol Nuclear Materials, was once the chairman and actual controller of the company. Between 2010 and 2016, he had reduced his holdings in the company ten times, cumulatively "cashing out" 2.584 billion yuan.Specifically, Zhou Heping's initial share reduction of Wol Nuclear Materials took place on August 3, 2010. On that day, Zhou Heping sold 10 million shares of the company through block trading at a price of 14.6 yuan per share, obtaining approximately 146 million yuan; after the transaction was completed, his shareholding ratio in the company fell from 55.7% to 51.61%.

From September 2014 to January 2016, within a span of less than a year and a half, Zhou Heping successively reduced his holdings in Wol Nuclear Materials nine times, totaling about 2.44 billion yuan. During this period, he sold 12 million shares at the highest price of 29.96 yuan per share, earning 359 million yuan; after selling 28 million shares at 16.99 yuan per share and receiving 475 million yuan, Zhou Heping's shareholding ratio in the company dropped to 27.097% at that time.

It is worth noting that during the concentrated reduction of Wol Nuclear Materials, Zhou Heping also led the acquisition of the listed company Changyuan Group externally.

It is understood that at this time, Cheung Kong Investments, a subsidiary of Li Ka-shing, had been continuously reducing its holdings in Changyuan Group, seemingly intending to exit; while Zhou Heping was determined to take this opportunity to enter this "peer" company that, like Wol Nuclear Materials, produces heat-shrinkable materials. At that time, there were market views speculating that Zhou Heping's continuous "cash-out" of Wol Nuclear Materials might be related to raising funds to prepare for the acquisition of Changyuan Group.

Time came to September 11, 2019, on this day, Wol Nuclear Materials announced that Zhou Heping was no longer the actual controller of the company.

It is reported that Zhou Heping divorced his ex-wife Qiu Limin on August 3, 2009. However, at that time, the two did not divide the shares of Wol Nuclear Materials. Ten years later, in 2019, Zhou Heping finally transferred his directly held 157 million shares of the company to Qiu Limin, and also transferred the 24.94 million shares of the company held through沃尔达利.

After the transaction was completed, Zhou Heping held 190 million shares, and the actual control of the company's voting rights decreased to 15.06%. Although he lost control, he was still the largest shareholder. Qiu Limin then had 182 million shares of the company, accounting for 14.47% of the total share capital at that time, becoming the second-largest shareholder.

After obtaining the shares of Wol Nuclear Materials, Qiu Limin has reduced about 35 million shares through the secondary market to date, with a total "cash-out" of more than 190 million yuan. Moreover, he has also transferred nearly 121 million shares to several private fund products under Xuanyuan Investment, Yingfu Hui Zhi, and Abama, among which Xuanyuan Ke Xin No. 202 Fund and Xuanyuan Ke Xin No. 203 Fund reduced 12.6 million shares in April 2024. It is worth mentioning that these private fund products are actually 100% owned by Qiu Limin and his son Zhou Chengzhi, who was born to Qiu Limin and Zhou Heping.

On the other hand, losing the identity of the actual controller does not affect Zhou Heping's new round of operations on Wol Nuclear Materials. Before March 2, 2021, Zhou Heping transferred 13.93 million shares to the private fund products Tongyi Qingtong No. 1 and Tongyi Qingtong No. 3; on March 4 and 9 of the same year, Zhou Heping transferred 11.07 million shares to Tongyi Qingtong No. 1 and Tongyi Qingtong No. 3, respectively; thereafter, Zhou Heping transferred 12.5 million shares to the private fund products Tongyi Qingtong No. 6 and Tongyi Furong No. 17 on June 29 and July 1 of the same year, respectively.

So far, Zhou Heping's direct holdings in Wol Nuclear Materials have decreased from 190 million shares to 140 million shares, and the four "Tongyi Series" private fund products have accumulated nearly 50 million shares. Similar to Qiu Limin's situation, the "Tongyi Series" private fund products are actually also 100% owned by Zhou Heping and his current spouse Yi Huarong.That is to say, after Qiu Limin and Zhou Heping transferred shares of Wol Nuclear Materials to their own private fund products, although the actual direct shareholding has decreased, they can still indirectly enjoy the original share rights through the private fund products. Moreover, these private fund products can also theoretically participate in new share subscriptions based on the market value of the Wol Nuclear Materials shares they hold, and flexibly obtain some additional benefits from the capital market.

Gradually losing the family business color

Zhou Heping and Qiu Limin once struggled together to start a business, and Wol Nuclear Materials is the result of their joint efforts.

According to the data, Zhou Heping was born in 1964, while Qiu Limin was born in 1965. In 1988, the two met at the Changchun Institute of Applied Chemistry of the Chinese Academy of Sciences; after entering the 1990s, both also went to work in Shenzhen and Baoding together. In 1998, Zhou Heping and Qiu Limin left Baoding Heli Da Company and jointly founded Wol Nuclear Materials.

Focusing on the company structure, Wol Nuclear Materials once had a strong family business color.

It is reported that the initiators at the beginning of the establishment of Wol Nuclear Materials also included Zhou Wenhe, Zhou Hongqi, Zhou Heli, Qiu Limin's brother Qiu Baojun, Qiu Limin's brother-in-law Song Boxue and Shi Xudong.

Wol Nuclear Materials' prospectus in 2007 showed that the then chairman and vice chairman of the company were Zhou Heping and Qiu Limin, and Qiu Limin's sister Qiu Lijie had also served as the company's chief financial officer.

At the same time, before going public, Zhou Heping and Qiu Limin together held as high as 89.54% of Wol Nuclear Materials, and their relatives also held 7.16% of the shares; moreover, the subsidiaries and related companies of Wol Nuclear Materials were mostly controlled by their relatives.

However, since its listing on the Shenzhen Stock Exchange in 2007, the family business attributes of Wol Nuclear Materials have gradually faded.

In terms of equity structure, Zhou Heping now has no actual control over the company. Except for Zhou Wenhe, his brothers, including Zhou Hongqi and Zhou Heli, are not among the top ten shareholders. In addition, Zhou Heping, Qiu Limin and related persons acting in concert still hold a total of 26.72% of the shares, but this has significantly decreased compared to the initial listing.Looking at the company's management, apart from the current chairman, Zhou Wenhe, who is 69 years old, and the vice chairman and current wife, Yi Huarong, who is 44 years old, it seems that there are no younger generations of Zhou Heping on the list.

It is worth mentioning that Zhou Chengzhi, the son of Zhou Heping and Qiu Limin, once appeared and once increased his holdings in Wolnuclear Materials through Woldali, thus entering the circle of important shareholders of the company; but since then, this person has not been serving on the board of directors for a long time.