Case Analysis of Sunflower's Failed Cross-Industry Transformation: Multiple Attempts from Photovoltaics to Pharmaceuticals and Semiconductors

Based on the information I have collected, I will analyze in detail why Sunflower attempted cross-industry transformation again after switching from photovoltaics to pharmaceuticals.

Sunflower (Zhejiang Sunflower Great Health Development Co., Ltd.) was founded in 2005 and listed on the Shenzhen Growth Enterprise Market in 2010. The company’s actual controller is Wu Jianlong, who has served as a senior executive in multiple industries [1][2].

• Difficulties in the Photovoltaic Industry:
  From 2011 to 2013, the photovoltaic industry encountered the “double reverse” policies of Europe and the United States, which hindered the export of Chinese photovoltaic products, leading to severe overcapacity. The price of polysilicon plummeted from USD 400/kg to USD 40/kg. Sunflower recorded its first loss of RMB 357 million in 2012 [1].
• Impact of Policy Retrenchment:
  After the “5·31” New Photovoltaic Policy was introduced in 2018, industry demand dropped sharply, and the capacity utilization rate of the entire industrial chain fell below 60%. Sunflower suffered a huge loss of RMB 1.125 billion in 2018 and continued to lose RMB 115 million in 2019 [1].
• Seeking a Counter-Cyclical Industry:
  The company valued the counter-cyclical nature of the pharmaceutical industry, hoping to escape its operational difficulties through this transformation [1].

• Acquired 60% equity of Bede Pharmaceuticals for RMB 355 million in 2019
• Sold its photovoltaic assets to Sunflower Investment for RMB 1 and RMB 239 million respectively
• Renamed to “Zhejiang Sunflower Great Health Development Co., Ltd.” in February 2020 [1]

• Sharp Decline in Revenue Scale: Before the transformation, the revenue of the photovoltaic business reached as high as RMB 2.329 billion, and after the transformation, the revenue of the pharmaceutical business never exceeded RMB 400 million
• Sustained Sluggish Profitability: From 2020 to the first half of 2025, the net profit was RMB 55.87 million, RMB 53.42 million, -RMB 1.139 million, RMB 21.75 million, RMB 7.827 million, and RMB 1.161 million respectively
• Continuous Decline in Gross Profit Margin of Core Products: The gross profit margin of Bede Pharmaceuticals’ preparation products dropped from 70.45% to 34.13% [1]

• The photovoltaic market saw new changes in 2023, and the company attempted to return to its former main business to seek development opportunities

It failed due to capital issues and eventually came to nothing [2]

• The development in the pharmaceutical field failed to meet expectations, so the company attempted to seek opportunities in a new popular field

It was voluntarily terminated because the key technical indicators failed to meet the standards [2]

• The development of the pharmaceutical business remained sluggish, and profitability struggled around the break-even point for a long time
• The semiconductor track is booming with high market enthusiasm
• The company attempted to transform into new-quality productive forces by entering the semiconductor field to improve its operational status [1]

• Suspended trading from September 8 to 19, 2025
• Released a restructuring proposal on September 21, planning to acquire 100% equity of Xipu Materials and 40% equity of Bede Pharmaceuticals
• Recorded 3 consecutive daily limit-ups after resuming trading on September 22

• Media investigations showed that neither Xipu Materials’ Zhangzhou factory nor Lanzhou factory had actual production capacity
• The Shenzhen Stock Exchange issued a letter of concern at the end of December, requiring verification of capacity distribution, related-party transactions, litigation involving the actual controller, and other matters
• The company failed to provide a convincing response to the market
• Was placed under investigation by the CSRC on January 14, 2026, and the restructuring proposal was characterized as “suspected of misleading statements”
• The restructuring was officially terminated on January 15, 2026 [2][3]

After transitioning to pharmaceuticals, Sunflower’s revenue plummeted from RMB 2.329 billion to the range of RMB 200-400 million, and its profitability remained sluggish for a long time, indicating that the pharmaceutical business did not achieve the expected transformation effect.

The company showed obvious characteristics of “chasing hotspots”: it vigorously developed photovoltaics when the photovoltaic industry was booming, transformed to pharmaceuticals when the pharmaceutical industry was favored, and targeted the semiconductor track when the semiconductor concept was popular. This practice of “switching to whichever industry is promising” reflects the company’s strategic speculation [1].

According to reports, Wu Jianlong, the company’s actual controller, has great influence on the development of Sunflower. Behind both the acquisition of pharmaceutical assets and the sale of photovoltaic assets are the transfer of his personal assets. As of the end of the third quarter of 2024, Wu Jianlong’s pledge ratio was about 60%, indicating certain capital pressure [2].

In the first half of 2025, the company’s revenue decreased by 8.33% year-on-year, and net profit decreased by 35.68% year-on-year. The non-recurring net profit for the first three quarters had already shown a loss. Facing the sustained performance decline, the company was eager to find new growth drivers [3].

Sunflower’s case fully exposes the risks of “fraudulent” restructuring:

• The target company lacks production capacity, and the authenticity of its business is questionable
• Concealed related-party transactions and integrity issues of the actual controller
• Issues such as “window dressing” of assets and misleading statements exist during the restructuring process

The CSRC’s investigation into Sunflower reflects the regulators’ “zero tolerance” attitude towards the M&A and restructuring market, which maintains market order and protects the interests of small and medium-sized investors [2][3].

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[1] Eastmoney.com - From Photovoltaics to Pharmaceuticals, Targeting the Semiconductor Track, What is “Cross-Industry Player” Sunflower Up to? (https://caifuhao.eastmoney.com/news/20250923164905296473280)
[2] Sohu - “20CM” Limit-Down! Sunflower Placed Under Investigation, Cross-Industry Restructuring “Dream Shattered” (https://www.sohu.com/a/976335157_313170)
[3] Cailianshe - Sunflower Placed Under Investigation and Restructuring Terminated, Acquisition of Xipu Materials’ “Dormant Factories” Ends in Vain (https://finance.sina.com.cn/roll/2026-01-15/doc-inhhiurx7757120.shtml)