Controlling Shareholder's 99% Stake to Be Auctioned Off by Court, Xiwang Food Faces Maximum Loss of 1.32 Billion Yuan in 2025, Yet Stock Hits Daily Limit Up

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Blue Whale News, March 16th (Reporter Dai Ziting) When the major shareholder’s holdings are nearly “liquidated” and put up for judicial auction, Xiwang Food still hits the daily limit in the secondary market.

On March 14th, Xiwang Food (000639.SZ) announced that the 200.07 million shares held by its controlling shareholder, Xiwang Group, will be publicly auctioned on the JD Judicial Auction Platform from 10:00 AM on March 30th to 10:00 AM on March 31st, accounting for 99.01% of Xiwang Group’s holdings in the company and 18.53% of the total share capital.

Just as the company’s shareholder is “liquidating” their holdings, on March 16th, the first trading day after the announcement, Xiwang Food’s stock price hit the daily limit and closed higher. By the close, the stock was at 3.14 yuan per share, up 10.32%. This stark contrast immediately sparked heated discussions among investors about this veteran company known as the “Number One Corn Oil Stock.”

Jiang Han, senior researcher at Pangu Think Tank, told Blue Whale News that the recent limit-up is more about the capital market’s pre-pricing of the “control rights change” event rather than a fundamental improvement in the company’s fundamentals. He believes that as the controlling shareholder’s shares are auctioned off judicially and negative news such as continuous losses are gradually released, some investors interpret this as “all the bad news has been priced in.” Meanwhile, the market is also betting on the entry of new investors, expecting asset restructuring and business reorganization, which has become a key driver of the stock’s movement.

Blue Whale News noticed that many investors on Snowball and stock forums are discussing the core keywords related to the change in control of the company. As for who might take over Xiwang Food, some investors have speculated, “Is state-owned capital going to buy in?”

Regarding the reasons for the stock’s limit-up and market speculation about potential new controlling parties, on March 16th, Blue Whale News contacted Xiwang Food. A relevant staff member stated that there is a lot of market information currently, and the relevant situation should be based on the company’s announcements; stock price fluctuations in the secondary market are influenced by multiple factors, and the reason for the limit-up is “difficult to define.” They also said that if there are any developments regarding the judicial auction of the controlling shareholder’s shares, the company will fulfill its disclosure obligations in a timely manner according to regulatory rules.

A “liquidation-style” judicial auction may lead to a change in control

According to the announcement from Xiwang Food, the 200 million shares to be auctioned are derived from a pledge dispute involving the shares held by controlling shareholder Xiwang Group and Binzhou Key Enterprise Development Fund Partnership (Limited Partnership). The financing began in August 2019 and was originally due in August 2022.

Looking back, in July 2019, with strong support from local government, Shandong Financial Asset Management Co., Ltd., Binzhou Financial Investment Group, Zouping State Investment Group, and Xiwang Group signed a strategic cooperation framework agreement. The three parties jointly established a key enterprise development fund with a scale of up to 3 billion yuan, mainly to support Xiwang Group’s strategic implementation and liquidity relief.

The company, once a star enterprise in Zouping, ended up needing government assistance due to the “Qixing Group guarantee incident.” Public disclosures show that as a private enterprise in Zouping, Xiwang Group had mutual guarantee relationships with Qixing Group. In March 2017, Qixing Group experienced a debt crisis, and Xiwang Group, as its largest guarantor, was involved in guarantees totaling between 2.464 billion and 2.907 billion yuan.

Although, under government coordination, Xiwang Group ultimately assumed only 10% of the guarantee liability, the incident severely damaged financial institutions’ confidence in Xiwang Group. Public records show that due to the “Qixing Group risk event,” Xiwang Group’s credit rating was downgraded, and rating agencies indicated that the company’s direct financing was significantly reduced for a time. By the end of Q3 2019, Xiwang Group’s total liabilities were about 30.9 billion yuan, with current liabilities of 16.37 billion yuan, and only 1.373 billion yuan in cash.

Under debt pressure, in 2020, Xiwang Group applied for judicial settlement with Zouping People’s Court, which approved the plan. The settlement involved installment payments, debt-to-equity swaps, and share repurchases, providing a longer debt resolution period.

However, the debt restructuring did not fully pull Xiwang Group out of its difficulties. In May 2024, the company was again listed as a defendant in enforcement proceedings, with an enforcement target of about 3.043 billion yuan; its chairman, Wang Yong, has also been listed as a person subject to enforcement by courts in Jinan, Qingdao, and other cities.

Tianyancha data shows that as of March 16, 2026, Xiwang Group still has four enforcement records, with a total enforced amount of about 2.598 billion yuan. Meanwhile, the group has 50 equity freeze records, 24 of which occurred in 2025.

Additionally, Blue Whale News found that over the past two years, the shares held by Xiwang Group and its affiliated investor Yonghua Investment have been repeatedly auctioned online due to judicial enforcement. According to multiple “Simple Equity Change Reports” issued by the company, Yonghua Investment was auctioned off approximately 25.67 million shares in July 2023, 37.24 million in December 2023, 51.05 million in November 2024, and 36.16 million in March 2025. Xiwang Group itself was auctioned 6.44 million shares in April 2024, and another 110 million shares were transferred in May 2025, accounting for 10.19% of the company’s total share capital.

As of May 2025, the total shares auctioned by Xiwang Group and Yonghua Investment amounted to about 347 million shares, representing 61.59% of their holdings and 32.11% of Xiwang Food’s total share capital. With the current auction of 200 million shares from Xiwang Group, the total auctioned scale could further expand. As of the announcement date, the total shares auctioned by Xiwang Group and its affiliated parties have reached 546.63 million shares, accounting for 50.64% of the company’s total share capital.

According to Xiwang Food’s Q3 2025 report, as of September 2025, the top ten shareholders held a combined 38.35% of shares, with a relatively dispersed ownership structure. The controlling shareholder, Xiwang Group, held 18.72%, but 99.01% of its shares were pledged. Notably, the second-largest shareholder, Jueneng Capital, is backed by Shandong state-owned assets, holding 4.00%; the fourth and fifth largest shareholders, Li Songfeng and Fang Lei, held 2.99% and 2.32%, respectively; the eighth-largest shareholder, Zhong Ge, held 1.39%. All are natural persons active in the A-share judicial auction market, with most shares acquired through judicial auctions.

If the entire 200 million shares held by Xiwang Group are auctioned off, the top ten shareholders will undergo a major reshuffle. Based on the latest shareholding change announcements, Xiwang Group, Yonghua Investment, and the actual controller Wang Di currently hold 52.51% combined. If the auction proceeds smoothly, their combined holdings could drop to 1.87%.

Regarding the potential impact of this auction, Xiwang Food admits that if the auction is successful, there is a risk of control rights changing hands. However, since the matter is still in the public disclosure stage, the final outcome remains uncertain until subsequent bidding and transfer processes are confirmed.

As for potential new controlling bidders, Jiang Han from Pangu Think Tank told Blue Whale News that industry logic suggests the most likely buyers are industry capital or local state-owned platforms, rather than traditional leading grain and oil companies. He pointed out that, compared to acquiring a continuously loss-making listed company, large grain and oil enterprises like Jinlongyu or COFCO tend to prefer building their own capacity. Industry capital or local state-owned platforms may be more interested in Xiwang Food’s existing corn oil production capacity, supply chain foundation, and regional economic value.

Four years of losses totaling over 1.9 billion yuan, “second growth curve” becomes a drag

From an operational perspective, Xiwang Food currently faces significant pressure.

According to the company’s earnings forecast released on January 30, 2025, net profit attributable to shareholders in 2025 is expected to lose between 880 million and 1.32 billion yuan, with net profit excluding non-recurring gains and losses also expected to be a loss of 880 million to 1.3 billion yuan. This means the company will record “four consecutive losses” after losing money in 2022-2024. Using the lower estimate of 880 million yuan, Xiwang Food’s cumulative losses over the past four years exceed 1.96 billion yuan.

This prolonged performance pressure is mainly due to its past cross-sector acquisitions. In 2016, Xiwang Food acquired the globally renowned sports nutrition and weight management company Iovate (formerly Kerr) for about $730 million, roughly 4.875 billion yuan, attempting to enter the sports nutrition and weight management markets and gradually form a “dual main business” model of “plant oil + sports nutrition.”

Initially, this business was highly successful. According to the company’s financial reports, in 2018, revenue from the nutrition supplement segment peaked at 2.964 billion yuan, surpassing the edible oil segment, which earned 2.422 billion yuan that year.

However, the growth then stagnated. From 2021 to 2023, revenue growth in the nutrition supplement segment slowed to 5.4%, 2.64%, and 1.75%, with gross profit margins dropping from 37.37% to 26.9%. In 2024, this segment became a “burden”: the subsidiary responsible for sports nutrition, Xiwang Food (Qingdao) Co., Ltd., reported a net loss of 717 million yuan for the year, directly leading the listed company to recognize impairment losses on goodwill and intangible assets totaling about 863 million yuan.

In 2025, the situation did not improve. The company explained in its earnings forecast that rising raw material prices for whey protein and increased competition led to underperformance in the sports nutrition segment, with an estimated impairment loss of 950 million to 1.5 billion yuan.

While the “second growth curve” has stalled, Xiwang Food’s traditional mainstay, the plant oil business, also faces growth challenges.

As the largest corn germ oil producer in China, Xiwang Food stated in its 2025 semi-annual report that its market share in corn oil remains above 30%. However, market share stability has not translated into revenue growth. From 2022 to 2024, revenue from the plant oil segment declined from 2.853 billion yuan to 2.253 billion yuan, a cumulative decrease of over 20%. The latest product data shows that in the first half of 2025, revenue from the plant oil segment was 942 million yuan, down 11.84% year-on-year.

Faced with bottlenecks in both main businesses, Xiwang Food announced in its 2025 earnings forecast that it will implement extensive reforms in 2026: diversifying product offerings, gradually reducing dependence on whey protein; increasing investment in digital channels like Amazon and Walmart; and strictly controlling non-production expenses.

For Xiwang Food, the real concern now may not just be whether the stock price can stay at the limit, but whether the judicial auction can attract new controlling forces and whether new variables can truly break the long-standing operational difficulties.