Acquisition "Falls Through," Huawei Power's Market Value Evaporates 2 Billion Yuan

Reporter Zhang Xiaohui

After the announcement of terminating the acquisition of the sensor business, Shanghai Huape Digital Technology (Group) Co., Ltd. (603121.SH, hereafter “Huape Power”) hit two consecutive limit-downs on March 9 and March 10. On March 12, Huape Power closed at 19.47 yuan per share, falling back to levels from three months ago, with a total market value of 6.591 billion yuan, approximately 2 billion yuan less than before the suspension.

On the morning of March 12, an Economic Observer reporter contacted Huape Power’s secretarial office as an investor, inquiring about the company’s future plans. A staff member replied, “For compliance reasons, I can only say this: currently, we cannot do anything within the next month, but our determination to acquire the sensor business overseas remains unchanged.”

Before the acquisition

Huape Power is a company specializing in key components for turbochargers, recognized as a national-level specialized and innovative “Little Giant,” and was listed on the main board of the Shanghai Stock Exchange in 2019. The actual controller, Wu Huailai, born in 1974, serves as chairman and general manager.

Huape Power’s main core businesses consist of two parts: one is the production of wastegate valve assemblies, turbine housings, intermediate housings, and other turbocharger components, accounting for about 71% of revenue, with the global market share of wastegate valve assemblies roughly one-third (data from 2023 brokerage research reports); the second is sensors, including pressure, speed, position, temperature, urea quality sensors, and automotive-grade MEMS chips, accounting for about 21% of revenue.

In February 2026, Huape Power planned to significantly boost its sensor business through acquisitions and mergers.

On February 13, Huape Power announced a major asset restructuring suspension, stating that the company was planning to purchase 100% equity of Meichuang Zhigan (Wuxi) Technology Co., Ltd. (“Meichuang Zhigan”) from Wuxi Shengyi Industrial Investment Partnership (Limited Partnership) by issuing convertible bonds and paying cash, and to raise supporting funds by issuing shares to no more than 35 specific investors.

Meichuang Zhigan’s wholly owned subsidiary, Meichuang Zhigan (Wuxi) Automotive Parts Co., Ltd. (“Meichuang Parts”), was once the main entity of Valeo’s (founded in 1923, over a century old) automotive sensor business, a global top-tier auto parts giant. The original name of Meichuang Parts was Wuxi Valeo Automotive Parts System Co., Ltd.

In 2024, Valeo sold its FAST project (the English abbreviation for Valeo’s global sensor business asset package). Huape Power partnered with Yicun Capital to establish a new company, Meichuang Zhigan, on January 9, 2025, to take over Valeo’s FAST project.

If Huape Power successfully acquires 100% of Meichuang Zhigan, it will gain Valeo’s technology licenses, patents, product lines, and customers, rapidly strengthening its automotive sensor and MEMS chip capabilities, entering the new energy and intelligent vehicle sectors from traditional fuel vehicle components.

This would greatly enhance Huape Power’s second core business segment—sensors.

Sudden termination

The Economic Observer reporter found that Huape Power’s acquisition of 100% of Meichuang Zhigan’s equity requires transactions with its shareholders. The shareholder, Wuxi Shengyi, is an industrial investment fund, with Yicun Shangzhen Yuan (Wuxi) Industrial Investment Co., Ltd. acting as the general partner.

Wuxi Shengyi’s 99.92% stake is held by Wuxi Shengrui Venture Capital Partnership (Limited Partnership) (“Wuxi Shengrui”). The main investors of Wuxi Shengrui are Huape Power, Wuxi State-owned Assets, and Yicun Capital, totaling six shareholders. Huape Power owns 41.60% of Wuxi Shengrui.

In other words, after the equity structure is transparent, Huape Power indirectly holds approximately 41.57% of the target through Wuxi Shengrui.

The sale price of Valeo’s FAST project has not been publicly disclosed. The outside world has no information on the exact transaction amount when Huape Power, in cooperation with Wuxi State-owned Assets and Yicun Capital, acquired the FAST project in December 2025.

However, Valeo’s 2024 financial report disclosed revenue data for the FAST project (a held-for-sale asset), which was €128 million in 2024, up from €103 million in 2023.

This means the FAST project’s revenue in 2024 was approximately 1 billion yuan. Huape Power’s total revenue in 2024 was 1.24 billion yuan. The revenue from Valeo’s FAST project accounted for about 80% of Huape Power’s 2024 revenue.

Although Huape Power indirectly owns 41.57% of Meichuang Zhigan, it cannot consolidate the financials or reflect it in the company’s revenue. Therefore, acquiring 100% control of Meichuang Zhigan is highly attractive for a listed company seeking breakthroughs in the sensor business.

On March 7, Huape Power announced the termination of the major asset acquisition, stating that after thorough research and negotiations, due to the pledge of the target company’s (Meichuang Zhigan) equity and the need for a certain period to reach a definitive de-pledge arrangement with the pledgee, the company decided to terminate the plan to protect its and all shareholders’ interests.

Following this announcement, on March 9, Huape Power’s stock price hit the limit-down at 23.13 yuan per share; on March 10, it continued to fall to 20.82 yuan per share.

Huape Power’s performance forecast for 2025 is poor. Previous earnings guidance indicated that the company expects a net profit attributable to shareholders of the parent company to be between -47 million and -27 million yuan in 2025.

For an auto parts company, rapid growth through acquisitions and mergers is a quick way to expand. For Chairman Wu Huailai, leading the company out of losses and strengthening its second core business—sensors—through acquisitions is a major challenge he currently faces.