Analysis of Transformation Challenges for Wang Neili's Succession at Fuen Co., Ltd.

Based on the information I collected, Wang Neili, Chairman of Fuen Co., Ltd. (Hangzhou Fuen Co., Ltd.), does face multiple transformation challenges during his succession. The following is a detailed analysis:

Fuen Co., Ltd. is a global eco-friendly fabric supplier with sustainable development at its core. Its main business covers the R&D, production and sales of eco-friendly fabrics, and it is a large-scale enterprise integrating fabric design, R&D, spinning, weaving, printing and dyeing, finishing and sales[1]. The actual controllers of the company are Wang Neili, Wang Xuelin (spouses) and Wang Enwei (Wang Neili’s father). The three jointly control 83.89% of the company’s shares through direct and indirect shareholding[2].

The textile industry is in a critical period of transformation from traditional manufacturing to intelligent manufacturing. The Ministry of Industry and Information Technology requires that by 2027, the numerical control rate of key processes and the penetration rate of digital R&D and design tools for large-scale textile enterprises need to reach higher levels[3]. Fuen Co., Ltd. needs to deeply promote intelligent manufacturing in production and manufacturing, and build smart factories by applying industrial internet, big data and artificial intelligence technologies to reduce operating costs.

The textile industry is facing increasingly strict environmental standards and requirements of the “Dual Carbon” goals. From 2005 to 2024, the energy consumption per unit output value of the textile industry has dropped by more than 65% cumulatively, but it still needs to continuously reduce energy consumption and water consumption per unit industrial added value, and continuously cut the emission intensity of major pollutants[4]. As an eco-friendly fabric supplier, Fuen Co., Ltd. needs to maintain a leading edge in green production.

Fuen Co., Ltd. is advancing its IPO process and faces strict regulatory review. According to the prospectus, the company needs to meet higher information disclosure standards and governance requirements[5]. During this process, some historical information disclosure inconsistencies of the company need to be properly resolved.

The company has established an overseas base in Vietnam (Fuen Vietnam Base), focusing on the production and finishing of colored spun fabrics, with an annual production capacity of 10 million meters[1]. How to effectively integrate resources in overseas markets, respond to geopolitical risks and manage cross-border operations has become an important issue.

Financial data shows that the net profits attributable to the owners of the parent company of the company in 2022-2024 were RMB 276.5758 million, RMB 229.2491 million, and RMB 274.8330 million respectively, and RMB 105.3001 million in the first half of 2025[5]. How to maintain stable growth of profitability in market competition is a key challenge.

The company’s asset-liability ratio dropped from 58.94% in 2022 to 41.47% in 2025, indicating that the company is optimizing its financial structure[5]. However, how to balance development speed and financial security during expansion still requires prudent management.

As a typical family enterprise, how to establish a sound corporate governance structure, improve the professionalism and transparency of decision-making while maintaining stable control is an important issue faced by Wang Neili. It is necessary to find a balance between family interests and the long-term development of the company.

How to establish an effective talent training and selection mechanism between family members and professional managers to meet the talent needs for the sustainable development of the enterprise.

In response to the above challenges, Wang Neili may consider the following response strategies:

• Technology Innovation-Driven
  : Increase R&D investment, focus on breaking through key technologies of green fiber materials and intelligent manufacturing
• ESG System Construction
  : Establish a sound environmental, social and governance system to enhance sustainable development capabilities
• Optimization of International Layout
  : Prudently evaluate overseas market opportunities and strengthen supply chain risk management
• Improvement of Governance Structure
  : Introduce an independent director system to improve decision-making transparency
• Talent Cultivation Mechanism
  : Establish a sound professional manager system and employee incentive plan

In general, the challenges faced by Wang Neili during succession are both common industry issues and have personalized characteristics. While maintaining the company’s existing competitive advantages, it is necessary to actively respond to industry changes to achieve a smooth transition and sustainable development.

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[1] Fuen Co., Ltd. Official Website - About Fuen (https://fuen.com/fuen-introduce/)

[2] Eastmoney.com - Several Questions About Fuen Co., Ltd. (https://caifuhao.eastmoney.com/news/20260108213141435342070)

[3] Sina Finance - [Policy Interpretation] Upgrading Path of Textile and Apparel Industry: Technological Innovation and Green Transformation (https://finance.sina.com.cn/money/bond/market/2025-11-14/doc-infxkpau4305611.shtml)

[4] Securities Times - China’s Textile Industry Accelerates Green Transformation (https://www.stcn.com/article/detail/1226954.html)

[5] Prospectus for the Initial Public Offering of Stocks by Hangzhou Fuen Co., Ltd. (http://pdf.dfcfw.com/pdf/H2_AN202512171802371563_1.pdf)