Financial Associated Press, November 7th (Reporter: Huang Lu) The former 'Northwest Beer King' Lanzhou Huanghe (000929.SZ) may draw a conclusion to the equity dispute. The ownership control of Lanzhou Huanghe is proposed to change, with the second largest shareholder who has had years of 'grudges' with the major shareholder possibly taking the lead. The company's stocks will resume trading from tomorrow.

The company stated that specific cooperation matters between Xinsheng Gongmao and Yucheng Investment, as well as between Yucheng Investment and Xinyuan Stock, involved in the 'Framework Agreement' signed by all relevant parties this time, require a separate formal equity transfer agreement to be signed before implementation, and there are still uncertainties in the specific implementation progress.

Tonight, Lanzhou Huanghe released the 'Announcement on the Progress of Controlling Shareholder's Planned Ownership Change and Resumption of Trading of Company's Stocks', the announcement indicated that on November 5th, Yang Shijiang and Tan Yuexin jointly signed the 'Framework Agreement', stipulating that this transaction will be completed in three steps. The first step involves Yucheng Investment subscribing to Tian Shu Industrial for 0.29 billion yuan (in three installments) to acquire 51% of Tian Shu Industrial's equity.

In the second step, Xinsheng Gongmao will exchange its 50.7% equity in Xinsheng Investment for the 51% equity in Tian Shu Industrial held by Yucheng Investment and the 45.95% equity in Xinsheng Gongmao held by Yucheng Investment. After completion, Yucheng Investment will hold 100% equity in Xinsheng Investment, becoming the indirect controlling shareholder of Lanzhou Huanghe. The actual controlling shareholder of Lanzhou Huanghe will change from Yang Shijiang to Tan Yuexin, while Yang Shijiang will hold 100% equity in Tian Shu Industrial and Xinsheng Gongmao.

In the third step, Xinyuan Stock will become the indirect controlling shareholder of Lanzhou Huanghe by becoming the final recipient of 50.7% equity in Xinsheng Investment.

Earlier, Lanzhou Huanghe announced at noon on November 1st that the company recently received a notification from the actual controller Yang Shijiang and the indirect controlling shareholder Xinsheng Gongmao, informing that they are planning to transfer 50.7% of the equity of Xinsheng Investment (direct controlling shareholder of the company), which may result in a change in the company's ownership control. The main trading partner is expected to be Yucheng from Hunan. At the same time, the company's stocks have been suspended from trading since the market opening on November 1st, with the suspension expected to last no more than 2 trading days.

Yucheng from Hunan is now the company's 'second-in-command' and has had a long-standing connection with Lanzhou Huanghe.

In early 2008, hunan yucheng, in pursuit of a "backdoor listing," arranged for its real estate investment company Xinyuan Group to take over the original major shareholder huanghe enterprise's debt of about 0.173 billion yuan.

At that time, in order to repay the debt, huanghe enterprise transferred 49% equity of Xinxin Investment (valued at 0.1 billion yuan) and 45.95% equity of Xinxin Industry and Trade (valued at 73.49 million yuan) to Xinyuan Group for debt settlement. The three parties signed a relevant agreement in March 2008, stipulating the reorganization of the listed company.

By the end of 2011, after becoming the second largest shareholder of the top company in hunan yucheng, hunan yucheng's attempt to use a backdoor listing failed. Tan Yuexin's plan to take over as the actual controller of lanzhou huanghe enterprise fell through, leading to ongoing disputes among shareholders. After many years, the relationship between the parties did not improve.

This change in ownership of equity may be a last resort. The financial reports show that from 2015 to 2023, lanzhou huanghe's revenue has been declining year after year. In 2021 to 2023, the company achieved net profits of 19.1139 million, -29.2442 million, and -4672.07 million yuan respectively, with negative net profits in the recent years after non-recurring items, indicating a bleak operating situation.

With the new delisting regulations raising the revenue threshold for main board loss-making companies from 0.1 billion yuan to 0.3 billion yuan, it is unanimous for lanzhou huanghe, whose revenue in the first three quarters of this year is less than 0.18 billion yuan, to quickly turn around and align interests of all shareholders. Now, after the controlling shareholder chose to let go, the second largest shareholder finally "realized their dream", but whether they can lift lanzhou huanghe out of its performance crisis remains uncertain.