YKA(SZ:300999) Xin Lang Cai Jing·2025-10-22 06:07Core Viewpoint - The company, Jinlongyu, has announced the sale of its wholly-owned subsidiary, Zhalai Teqi Hefeng Agricultural Co., Ltd., to optimize its asset structure amid ongoing losses and financial difficulties [1][2]. Group 1: Asset Sale and Financial Implications - Jinlongyu's subsidiary, which previously handled its beet sugar business, has been sold due to continuous losses and insolvency, reflecting the company's need to streamline operations [1][2]. - The sale includes a significant debt waiver arrangement, with Jinlongyu potentially waiving up to 197 million RMB in debts to facilitate the transaction [2][3]. - As of the announcement date, Zhalai Company reported total assets of 239.02 million RMB, total liabilities of 377.95 million RMB, and a net loss of 34.65 million RMB [3]. Group 2: Project Delays and Performance Issues - Jinlongyu has faced multiple delays in its fundraising projects, with ten projects failing to meet expected returns in the first half of the year [4]. - The company has been struggling with underutilized production capacity, with oil extraction and refining capacity utilization rates at 56.94% and 49.97%, respectively, indicating a significant overcapacity issue [4]. - The company’s revenue growth has been modest, with a 5.67% increase in revenue and a 60.07% increase in net profit in the first half of the year, primarily driven by improvements in the feed raw materials segment [5][6]. Group 3: Market Position and Competitive Landscape - Jinlongyu holds a leading market share in edible oils and has a strong presence in packaged rice and flour, but faces challenges in a shrinking consumer demand environment [6]. - The company has been attempting to pivot towards high-end products and expand its product lines into new categories, but these efforts have had limited impact on overall performance [6]. - The competitive landscape in the flour processing industry is intensifying, with larger players increasing capacity, leading to lower-than-expected project returns for Jinlongyu [4][5]. Group 4: Financial Health and Risks - Jinlongyu's financial health is concerning, with a debt ratio of 56% and significant short-term and long-term interest-bearing liabilities, raising liquidity risk [7]. - The company’s cash-to-short-term debt ratio is only 0.53, indicating potential challenges in meeting short-term obligations [7]. - The net profit margin remains low, with projections of around 0.5% for 2023 and 2024, despite a slight recovery in the first half of the year [6][7].