Precision metal parts manufacturer Yu Long (2233) is set to hold a shareholder meeting on May 29 to completely reelect the board of directors. The two main shareholders, Sheng Hsing and Cheng Tai, have each nominated their candidates, and nine directors (including three independent directors) are fully nominated, indicating a potential repeat of the leadership struggle that occurred four years ago.

Currently, Sheng Hsing (1558) owns about 24% of Yu Long's shares, while Cheng Tai (1583) holds nearly 20%, making their holdings closely contested, likely leading to renewed battles for proxy votes. Last year, Yu Long reported consolidated revenues of NT$3.659 billion, a 9.6% increase year-on-year, with a net profit of NT$658 million, up 24.1%, and an earnings per share (EPS) of NT$10.96, marking historical highs in revenues, profits, and EPS.

This situation has driven both companies to fiercely compete for control of the company. Sheng Hsing, a global sewing machine giant, already acquired 21.56% of Yu Long's shares in 2022. To ensure control, it has allied with Yu Long's management team to increase its shareholding to 26.06% and is launching three major channels for acquiring proxy votes next week. On the other hand, Cheng Tai Group's chairman Yang Dehua, who invested in Yu Long a decade ago and became the largest shareholder, is navigating a challenging landscape after Sheng Hsing unexpectedly announced its public offer for 21.56% of Yu Long's shares three years ago, disrupting Yang's plans. In the lead-up to this election, all three parties have conducted multiple discussions but failed to reach a consensus on board seats. Even with a current holding gap of about 5% compared to Sheng Hsing, Yang is confident in his ability to collect enough proxy votes.

Looking back at the leadership struggle three years ago, the stock price remained resilient, and this current battle for control is also expected not to result in wild fluctuations in stock price, as investors will focus on whether the current management team can maintain market stability. To bolster investor confidence, the company is likely to sustain a positive market presence.