Core Viewpoint - Yingkang Life plans to use 1.458 billion yuan from its capital reserve to offset accumulated losses, aiming to clear its balance sheet losses and reset its undistributed profits to zero, which reflects a strategic financial maneuver rather than a fundamental operational recovery [2][3] Financial Strategy - The company reported a net profit of 29.99 million yuan and revenue of 409 million yuan in Q1 2025, indicating initial success in its restructuring efforts, but this profit is insufficient to cover previous substantial losses [3] - The use of capital reserves to offset losses is a compliant financial arrangement that may restore the company's refinancing capabilities and future profit distribution potential [2] Operational Concerns - Despite the accounting maneuver, the actual operational performance remains critical; the company must demonstrate sustainable profitability rather than relying on one-time financial improvements [3] - The significant losses in recent years stem from asset impairments and investment losses related to subsidiary equity disposals, highlighting weaknesses in investment management and business strategy [2] Market Sentiment - The market reaction to loss offsetting strategies is mixed; while it may enhance the potential for future dividends and provide some stock price support, investors remain focused on the company's fundamental business model and risk management capabilities [3] - The case of Yingkang Life serves as a cautionary tale for other listed companies regarding the risks of aggressive expansion and diversification without sound management practices [3] Future Outlook - The ability of Yingkang Life to truly pivot and establish a growth trajectory will be a key focus for market observers, as financial adjustments alone cannot ensure long-term value [3]

Group 1 - The company held its 19th (temporary) meeting of the sixth board of directors on July 16, 2025, with all 9 directors present, either in person or via communication methods [1][2] - The board approved the proposal to use surplus reserves to cover losses, utilizing a total of 1,457,808,920.00 yuan from surplus reserves and capital reserves [1][2] - The proposal received unanimous support with 9 votes in favor and will be submitted to the shareholders' meeting for further approval [2] Group 2 - The company has scheduled its second temporary shareholders' meeting for 2025 on August 1, 2025, to be held in Qingdao, combining in-person attendance with online voting [2] - The proposal for the shareholders' meeting was also unanimously approved with 9 votes in favor [2]

Group 1 - The company held its 17th meeting of the 7th Supervisory Board on July 8, 2025, with all three supervisors present, and the meeting complied with legal and regulatory requirements [1][2]. - The Supervisory Board approved the proposal to amend the company's articles of association, which will be disclosed in detail through various financial news outlets [1][2]. - The proposal to use retained earnings to cover losses was also approved, deemed beneficial for enhancing shareholder returns without harming the interests of shareholders, especially minority shareholders [2]. Group 2 - Both proposals will require further approval from the company's shareholders' meeting [2]. - The meeting's resolutions were signed by the attending supervisors and stamped with the Supervisory Board's seal [2].

Core Points - The company held its 18th meeting of the 7th Board of Directors on July 11, 2025, where it approved the proposal to use reserve funds to cover losses [1][2] - The company reported a cumulative undistributed profit of -398,163,266.07 yuan as of December 31, 2024, with a surplus reserve of 79,300,140.49 yuan and a capital reserve of 3,021,615,500.99 yuan [2] - The proposal to use the surplus reserve and part of the capital reserve to cover losses will be submitted to the second extraordinary general meeting of shareholders scheduled for July 28, 2025 [2][3] Summary by Sections Board Meeting - The board meeting was legally convened with all 7 directors present, and the proposal to use reserve funds to cover losses was unanimously approved [1] Financial Status - The company’s financial report indicates significant losses with a negative undistributed profit and outlines the reserves available for loss coverage [2] Shareholder Meeting - The company plans to hold a second extraordinary general meeting of shareholders to discuss the approved proposal, with all board members voting in favor [2][3]

Core Viewpoint - Shanghai Yueshen Health Group plans to use surplus reserves of 72.85 million yuan and capital reserves of 141 million yuan, totaling 214 million yuan, to offset cumulative losses, resulting in a significant reduction of its reserves and a nearly 400% drop in net profit for 2024 [1][2][4]. Financial Summary - For 2024, the company reported revenue of 1.204 billion yuan, a year-on-year decrease of 5.79%, and a net profit attributable to shareholders of -147 million yuan, a staggering decline of 393.87% [4]. - The company has experienced negative net profits for three consecutive years, with cumulative losses exceeding 500 million yuan, indicating concerns over its core business's ability to generate profits [4]. - The company's operating cash flow also decreased by 33.48% year-on-year, amounting to 82.23 million yuan [4]. Business Transformation - Yueshen Health, originally focused on ceramic tiles, has been transitioning into the health sector since 2015, with its business now encompassing building materials, health services, and investment property leasing [5]. - The company’s building materials segment primarily focuses on high-end ceramic tile brand "Simik," while its health services include various care systems and training programs [5]. Loss Factors - The primary reasons for the company's losses include a decline in revenue from the ceramic tile business due to reduced market demand, increased competition, and rising costs [3]. - The company has also faced challenges related to the long investment cycle of its health projects and asset impairment losses, which have further exacerbated its financial difficulties [4].

Core Viewpoint - Shanghai Yueshen Health Group Co., Ltd. plans to use surplus reserves to cover losses, as the company reported a significant decline in net profit due to increased market competition and reduced sales prices of its products [1][2]. Group 1: Financial Adjustments - The company intends to utilize a total of 72,853,943.26 yuan from surplus reserves and 141,057,228.79 yuan from capital reserves to offset losses, resulting in a reduction of capital reserves to 176,595,527.02 yuan [1]. - As of December 31, 2024, the company's undistributed profits were reported at -0 yuan, indicating a complete depletion of retained earnings [1]. Group 2: Causes of Loss - The primary reasons for the company's losses include a slight decline in sales and intensified market competition, which led to a decrease in sales prices and gross margins of tile products [2]. - The company has also recognized potential impairment losses on assets, further exacerbating the cumulative loss [2]. Group 3: Notification to Creditors - The company has formally notified creditors of their rights to claim debts or request guarantees within 30 days of receiving the notice, or 45 days from the announcement date if no notice is received [2][3]. - Creditors must submit written requests along with relevant documentation to the company to assert their claims [2][3].

Core Viewpoint - The Ministry of Finance issued a notification to clarify financial processing issues related to the implementation of the Company Law and the Foreign Investment Law, focusing on the use of capital reserves to cover losses, the evaluation of non-monetary assets for contributions, and the management of specific funds in foreign-invested enterprises [1][10]. Group 1: Use of Capital Reserves to Cover Losses - Companies can use capital reserves to cover losses based on audited financial statements from the previous year, with the limit being the negative retained earnings brought to zero [2][11]. - The notification specifies that companies must create a plan for using capital reserves to cover losses, detailing the loss situation, reasons for covering losses, and the source and amount of reserves to be used [3][11]. - Companies must notify creditors or publicly announce the decision to use capital reserves within 30 days of the shareholders' meeting resolution [3][11]. Group 2: Non-Monetary Asset Contributions - Companies must evaluate non-monetary assets contributed by shareholders according to relevant regulations and follow internal decision-making procedures for establishment, capital increase, merger, and division [4][12]. - Companies should consider various factors that may affect the realization of asset rights when accepting non-monetary contributions and may need to obtain legal opinions if necessary [4][12]. Group 3: Management of Specific Funds in Foreign-Invested Enterprises - Foreign-invested enterprises must convert surplus reserve funds into statutory and discretionary reserves, with specific management requirements for employee reward and welfare funds [5][13]. - From January 1, 2025, foreign-invested enterprises will no longer accrue reserve funds, development funds, or employee reward and welfare funds, and any accruals made after this date should be reversed [5][13].