As the town blacksmith, Sheng will upgrade your watering can, hoe, or sickle once per season. Keep an eye on the message board in Konohana Town to see his requests.
After you have upgraded the same tool five times, Sheng will put a "Power Up" challenge request on the message board. He can't upgrade that specific tool again until you finish the difficult request. These requests will only come once a season. Sheng is also a panda fanatic, and knows a lot about the wild animal. During the Snow Festival, he even makes a giant panda sculpture out of snow!