On October 29th, Caixin reported (Reporter Luo Yichen) By seizing the opportunity of Tesla's localization, Ningbo Xusheng Group (603305.SH), which has developed rapidly in recent years, suddenly announced a major news that the company's controlling shareholder Xu Xudong and concerted parties are planning to transfer their shares, which may lead to a change in the company's control. As a result, the company's stocks and convertible bonds will be suspended from trading starting on October 30th.

Ningbo Xusheng Group was established in 2003, primarily engaged in the research, development, production, and sales of precision aluminum alloy auto parts and industrial parts. The company went public in A-shares in 2017. Around 2013, the company took the lead in entering Tesla's supply chain, becoming a crucial part of Tesla's localization. Thanks to its early deployment in new energy vehicle production lines, Ningbo Xusheng Group has risen to become a leading enterprise in the domestic integrated die-casting industry. In 2023, the company's net income attributable to the parent reached 0.714 billion yuan, achieving its best historical performance, but with a year-on-year growth rate of less than 2%, indicating a significant slowdown in growth momentum.

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; net income attributable to shareholders of the listed company was 0.323 billion yuan, a year-on-year decrease of 42.83%. Looking at individual quarters, the net income attributable to the parent company declined each quarter in the first three quarters, with the net income in Q3 being less than 59 million yuan, a 65.96% year-on-year decrease.

Regarding the decline in performance, the company stated that it was mainly due to weaker-than-expected sales volume at some customer end-points, resulting in a slight decrease in revenue. In addition, factors such as the price increase of the main raw material aluminum ingot have led to a decrease in gross margin, and the increase in interest expenses for convertible bonds has also had an impact. Apart from Tesla, the company's major customers also include Mercedes-Benz, BMW, Volkswagen, Stellantis, BYD, Great Wall, Geely, NIO, XPeng, Leapmotor, RIVIAN, LUCID, Polaris, and more.

Caixin reporters noted that with the intensifying competition in the new energy vehicle industry, upstream aluminum alloy parts manufacturers are also facing tough times. Among the major manufacturers, Ningbo Xusheng Group, Wencan Group (603348.SH) are under pressure from declining performance, while IKD (600933.SH), Rontai Group (605133.SH) are relatively better off, but their growth is also becoming increasingly weak.

Perhaps due to the industry's challenges, Xu Xudong finally decided to transfer the company's controlling interest after twenty years of entrepreneurship. Information shows that the 55-year-old Xu Xudong, besides being the chairman and general manager of Ningbo Xusheng Group, also serves 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 Bonded Port Area Xusheng Holdings Co., Ltd., and the second largest shareholder Hong Kong Xuri Industrial Co., Ltd., totaling 46.88% of the shares of the company.

Before the announcement of the transfer of the company's controlling interest, there were no pledges, marks, or freezes on Xu Xudong's shares. However, in the past few years, Xu Xudong has made multiple reductions in holdings and once issued apology announcements for violating the rules on reducing holdings.