In 2003 Shanghai real estate company Hengyuan Corporation formed Shanghai Hengyuan Football Club who were based in the Zhabei District. In their first season they failed to reach the Chinese Football Association Yi League finals at the end of the league campaign. During this period top-tier side Bayi FC were in financial difficulties. Shanghai Hengyuan were interested to taking over the entire club especially their position in the top tier of the Chinese football pyramid, however this was unable to be achieved because many of the first team had already left the club. Shanghai Hengyuan then concentrated on buying Bayi's youth team and on April 2, 2004, a new club named Nanchang Bayi Hengyuan Football Club was established with players who had played for the Shanghai Hengyuan Football Club and the Bayi U-19 team. The club moved to Nanchang, Jiangxi and play at the 26,000 seater Nanchang Bayi Stadium to take advantage of the region's lack of football representation, yet strong support. Playing at the bottom of the Chinese football pyramid in the third tier the club brought in Li Xiao to manage the team. He quickly guided the team to win the Yi League in 2005 and promotion to the Jia League. After this achievement Li Xiao became the club's vice-chairman. High-profile managers Zhou Suian and then Zho Bo came to manage the team with little success. Li Xiao returned to manage the team until November 27, 2008 when he decided to resign at the end the season.