Zhongnan Culture's cross-industry surge in thermal power hits five consecutive daily limit-ups, with hyaluronic acid queen Zhao Yan making a "precise" entry before trading suspension.

A-shares’ “electric heating” is spreading. Riding this trend, Zhongnan Culture’s “cross-industry acquisition” of power plant company Sulong Thermal Power caused its stock price to surge. Interestingly, before the transaction, Huaxi Biological’s actual controller Zhao Yan’s company precisely timed the purchase and bought shares of Zhongnan Culture in advance.

The “rising with electric” trend is quickly becoming a new pattern in the current A-share market.

On March 13, Zhongnan Culture hit the daily limit up again, marking its fifth consecutive limit-up. Recently, the company announced a major asset restructuring plan, revealing it will acquire a 57.30% stake in Sulong Thermal Power, which will become a controlling subsidiary after the deal.

In terms of scale, Sulong Thermal Power had total assets exceeding 8.3 billion yuan in 2025. By the third quarter of that year, Zhongnan Culture’s total assets were only about one-third of Sulong’s, making this a classic “snake swallowing an elephant” deal. Additionally, Zhongnan Culture and Sulong Thermal Power operate in different industries—Zhongnan’s main business is machinery manufacturing, while Sulong operates in thermal power and heat supply, which are currently hot sectors in power plants.

Zhongnan Culture’s “cross-industry acquisition” of hot assets has excited the market, and some foresighted investors have already made early moves, including Zhao Yan, the actual controller of Huaxi Biological.

According to Zhongnan Culture’s announcement, as of February 12, the day before trading resumed, Huaxi Xinyu, controlled by Zhao Yan, became one of the top ten shareholders, holding 11.89 million shares. Currently, Huaxi Xinyu’s shareholding value has risen to nearly 44 million yuan.

Zhongnan Culture “swallows the elephant” Sulong Thermal Power

On March 13, Zhongnan Culture hit the daily limit up again, marking its fifth consecutive limit-up, driven mainly by a major restructuring plan.

On March 8, Zhongnan Culture announced a major asset restructuring plan to acquire a 57.30% stake in Sulong Thermal Power held by Jiangyin Electric Power Investment, through issuing shares and cash payments, and raising supporting funds.

The purchase price is 2.16 yuan per share, which is about 22% lower than the previous trading day’s closing price of 2.78 yuan. After the deal, Sulong Thermal Power will become a controlling subsidiary of Zhongnan Culture.

Notably, Sulong Thermal Power’s scale far exceeds that of Zhongnan Culture itself, indicating this is a “snake swallowing an elephant” type of deal.

The announcement shows that in 2025, Sulong Thermal Power will have total assets of 8.343 billion yuan and equity of 4.057 billion yuan; by the third quarter of 2025, Zhongnan Culture’s total assets are only 2.963 billion yuan, about one-third of Sulong’s, with total equity of 2.364 billion yuan.

Meanwhile, Sulong Thermal Power achieved a net profit of 620 million yuan in 2024, while Zhongnan Culture’s net profit attributable to shareholders was 57.42 million yuan, nearly a tenfold difference. In 2025, Sulong’s net profit is expected to decline to 347 million yuan, while Zhongnan Culture’s net profit in the first three quarters reached 82.23 million yuan.

Data shows that Zhongnan Culture’s main business is machinery manufacturing, including the production and sales of metal pipes, flanges, pipe systems, and pressure vessels. The company also has cultural media and new energy sectors—covering film and TV projects, as well as distributed photovoltaic power station development and operation.

Sulong Thermal Power mainly operates in thermal power and heat supply, with diversified investments in energy, focusing on large-scale new energy projects. Therefore, acquiring Sulong Thermal Power is undoubtedly a “cross-industry” move for Zhongnan Culture.

Regarding potential synergies, Zhongnan Culture mentioned in its announcement that its previous power sector pipe fittings business faced high customer acquisition costs, weak cooperation stickiness, and slow market share growth. After the acquisition, the company can leverage Sulong Thermal Power’s industry influence to expand regional thermal power clients and strengthen its machinery manufacturing sector.

Timing-wise, this deal coincides with the hot “electricity synergy” trend; in this context, thermal power assets with long-term cost advantages and grid regulation functions are currently in focus. Thus, bringing in Sulong Thermal Power also reflects the company’s proactive alignment with market trends.

“Hyaluronic Acid Queen” Zhao Yan “preemptively” invests

The “snake swallowing an elephant” plan caused Zhongnan Culture’s stock to soar and allowed some seasoned investors to profit.

According to regulatory requirements, Zhongnan Culture released its top ten shareholders’ holdings before the suspension of trading, on February 12, 2026. Among them, Huaxi Xinyu Investment Co., Ltd. (“Huaxi Xinyu”) is a new entrant.

According to Qichacha, Huaxi Xinyu’s main businesses include project investment, investment management, consulting, corporate management, branding, and computer graphic design. Zhao Yan, the actual controller of Huaxi Biological, is the actual controller of Huaxi Xinyu.

Looking through the ownership structure, Zhao Yan directly owns 66.8% of Huaxi Xinyu. She also indirectly holds the remaining 33.2% through Beijing Huaxi Hui Mei Cultural and Creative Investment Co., Ltd.

As of February 12, Huaxi Xinyu held 11.89 million shares of Zhongnan Culture, accounting for 0.5% of total shares, with a market value of about 33.06 million yuan that day. If the shareholding remains unchanged, its latest market value would approach 44 million yuan, meaning Zhao Yan earned about 11 million yuan in just one month.

In fact, Zhao Yan’s precise positioning was not entirely accidental. Her extensive experience in capital markets has given her sharp capital intuition, and she has completed several larger-scale capital deployments than Zhongnan Culture.

One typical example is First Venture, which she invested in as a purely financial investor.

According to the prospectus, in 2007, First Venture initiated its third capital increase at 1.50 yuan per share, with Huaxi Xinyu investing 270 million yuan. In 2011, it launched a fourth round at 2.60 yuan per share, with Huaxi Xinyu’s investment rising to 337 million yuan. Based on this, Zhao Yan’s cost for investing in First Venture was less than 600 million yuan.

Later, First Venture went public in 2016, and Huaxi Xinyu once held 540 million shares, with a market value exceeding 10 billion yuan. As of the third quarter of 2025, even excluding cashing out from multiple reductions, Huaxi Xinyu still held 162 million shares, worth over 1 billion yuan.

Meanwhile, Zhao Yan’s management of Huaxi Biological is similar. Since its successful listing in Hong Kong in 2008, the company’s peak market value was less than 10 billion HKD. In 2017, Zhao Yan pushed for privatization, then quickly shifted focus to the STAR Market for higher valuation premiums.

Eventually, her efforts paid off: after listing on the STAR Market in 2019, Huaxi Biological’s peak market value once exceeded 120 billion yuan.

Huaxi Biological’s Transformation

While Zhongnan Culture’s performance has brought Zhao Yan great success, her “core asset,” Huaxi Biological, still faces some struggles.

On February 27, Huaxi Biological released its 2025 interim report. It showed revenue of 4.217 billion yuan, down 21.49% year-over-year, but net profit attributable to shareholders was 291 million yuan, a 67.03% increase despite the revenue decline.

Huaxi Biological explained that this “profit growth despite revenue decline” was mainly due to ongoing optimization of business structure and resource allocation, with reductions in sales and management expenses. The report states that management expenses decreased by over 10%, and sales expenses by over 30% in 2025.

This data also reflects a shift in Zhao Yan’s approach to managing Huaxi Biological.

Historically, Huaxi Biological pursued aggressive expansion, entering fields like functional skincare, functional foods, and collagen from 2018 to 2022. The company launched brands such as “Koudi,” “Mibeier,” “BM Skin Active,” and “Black Zero,” and acquired a 51% stake in Yierkang.

However, macroeconomic pressures and consumer market challenges led to a contraction in its skincare segment, which was a key part of its expansion. Brands like Runxiquan, Runxihe, and Dema Run were shut down in 2024 and 2025.

In the 2025 interim report, Huaxi Biological clarified that it is focusing on skin science innovation transformation and nutritional science innovation transformation, optimizing its structure, reducing low-efficiency brands and projects, and cutting back on activities driven solely by sales metrics.

At the same time, Zhao Yan also made major adjustments to the management team. In March 2025, she returned to the operational frontline; original CTO Guo Xueping, VP Fan Yuan, and Zou Songyan resigned. Vice Presidents Liu Aihua, Xu Guixin, and Luan Yizheng also stepped down from their previous roles. New directors Wang Hui, Yu Jing, and Chen Yuxin, all with extensive financial experience, joined the board.

Overall, Zhao Yan now emphasizes internal growth and improving profitability quality. Before new opportunities in consumer and aesthetic medicine sectors emerge, she is likely to remain in a “consolidation” phase for Huaxi Biological.