Core Viewpoint - The 10% equity stake of Hetai Life Insurance Co., Ltd. is set to be auctioned due to financial difficulties faced by its major shareholder, Jin Xing Mining Co., Ltd., highlighting ongoing challenges within the company, including investment losses and a lack of core management [1][2]. Group 1: Equity Auction Details - Jin Xing Mining's 1.5 billion shares (10% equity) in Hetai Life will be auctioned on October 23, with an assessed value of 97 million yuan and a starting price of 92 million yuan [2]. - This marks the second auction of Jin Xing Mining's shares in Hetai Life, with a previous auction attempt in December 2022 being withdrawn shortly after [2]. - Currently, 40% of Hetai Life's equity is under pledge or frozen, involving four shareholders and a total of 600 million shares [2]. Group 2: Impact of Pledged Shares - High levels of pledged shares may lead to changes in the equity structure, affecting corporate governance continuity [3]. - If pledged shares are judicially disposed of, new investors could alter the company's strategic direction, potentially causing governance conflicts [3]. - Major shareholders losing voting rights due to pledged shares can reduce decision-making efficiency at shareholder meetings [3]. Group 3: Financial Performance - Established in 2017, Hetai Life has struggled to achieve stable profitability, with most years resulting in losses [4]. - In 2024, the company reported a net profit of 12.44 million yuan, but continued to incur losses in the first half of the year, with a net loss of 17.6 million yuan [4]. - Significant investment losses were reported, including a 16.14 million yuan impairment for "20 Shenye 03" and a cumulative impairment of 75.92 million yuan for "H20 Shanshan 1" [4]. Group 4: Management Issues - The position of General Manager at Hetai Life has been vacant for nearly five years, which may hinder the company's strategic direction and operational efficiency [6][7]. - Recent departures of two vice presidents further exacerbate the management instability, leaving only four executives in the leadership team [7]. - Regulatory guidelines stipulate that insurance companies must appoint qualified personnel within six months for key management positions, indicating potential compliance issues for Hetai Life [7].