On June 25th, Lanjing News reported (Reporter Xu Xiaochun) that Xingyuan Environment Technology was in danger of being delisted, and former owner New Hope made a "one stone, three birds" move.

Last year, New Hope Group's wholly-owned subsidiary New Hope Investment Group (hereinafter referred to as "New Investment Group") transferred the control of Xingyuan Environment Technology to Ningbo State-owned Assets. In the four years since taking over Xingyuan Environment, New Investment Group has formed a debt of 1.451 billion yuan to Xingyuan Environment. Xingyuan Environment's debt ratio of over 90% means that it is at risk of collapse at any time.

Now, New Investment Group has exchanged its debt of no more than 500 million yuan for the equity of Xingyuan Environment's only profitable subsidiary, increasing its stake in the new energy equipment manufacturing enterprise as well as easing some of Xingyuan Environment's debt pressure. At the same time, when Xingyuan Environment's stock price was close to the 1 yuan warning line, an announcement of capital increase resulted in a 20 cm rise.

Former owner New Hope has increased 500 million yuan of debt capital.

On June 24th, Xingyuan Environment Technology's stock price reached a minimum of 1.03 yuan/share during trading, and the countdown to face value delisting begins. Former owner New Hope stepped in to save the day.

On the same day, Xingyuan Environment announced that major shareholder New Hope Investment Group Co., Ltd. (hereinafter referred to as "New Investment Group") had made a capital increase to Xingyuan Environment's subsidiary Hangzhou Xingyuan Environmental Protection Equipment Co., Ltd. (hereinafter referred to as "Xingyuan Environmental Protection") with the debt of no more than 500 million yuan it holds in the listed company.

On the same day, Xingyuan Environment's chairman Li Jianxiong, director and general manager Sun Mingfei, director and deputy general manager Fu Junmin, and director and chief financial officer Fang Qiang said they would increase their shareholdings in Xingyuan Environment in the next three months, at a price of no less than 1.3 million yuan and no more than 2.6 million yuan.

The Blue Whale News reporter notes that many of the Xingyuan Environment directors proposing to increase their shareholdings have links to New Hope.

Before joining Xingyuan Environment, Sun Mingfei was the president of New Hope Industrial Park Operation and Management Co., Ltd, Fang Qiang was the vice president of East China Region of New Hope Group Co., Ltd, and Fu Junmin was also the general manager of New Hope Group's accounting center and financial management center. At present, Fu Junmin is also the executive director and general manager of Xingyuan Environmental Protection, which was capitalized in this round. Li Jianxiong, Xingyuan Environment's chairman, also serves as an executive vice president and chief operating officer of New Hope Group, as well as a director of the listed company New Hope Liuhe.

With the pig farming giant's intervention, the shell of Xingyuan Environment seems to have hope. On June 25, Xingyuan Environment opened high, and the company's stock price was locked up in less than ten minutes. At the end of trading, Xingyuan Environment's stock price was 1.28 yuan/share, with a market capitalization of about 1.9 billion yuan.

In history, New Hope has come to the rescue of Xingyuan Environment several times. In 2019, New Investment Group purchased 23.6% of the shares of Xingyuan Environment from former controlling shareholder Xingyuan Holdings. After the transaction was completed, New Investment Group became the controlling shareholder of Xingyuan Environment. Before the transfer of shares under the agreement, Xingyuan Environment borrowed RMB 180 million from New Investment Group at an annual interest rate of 4.35%. Subsequently, in 2019, Xingyuan Environment carried out a private placement to New Investment Group, and all the funds raised were used to supplement its own liquidity and repay the loan.

However, four years later, New Investment Group gave up control of Xingyuan Environment.

In February 2023, New Investment Group and Ningbo Caifeng Technology, a holding investment platform of the financial system within Zhejiang Province, signed a "Voting Right Entrustment Agreement" to entrust all the corresponding voting rights of the shares held to Caifeng Technology. After the transaction was completed, the actual controller of Xingyuan Environment changed to the Finance Bureau of Fenghua District, Ningbo City. At the same time, Xingyuan Environment is also planning a private placement to Caifeng Technology, raising funds for liquidity supplementation and debt repayment.

In the month that the transfer of control was completed, Xingyuan Environment received a loan support of RMB 500 million from state-owned asset holding company Caifeng Technology. In the same year of October, a subsidiary fully owned by Fenghua District State-owned Assets Management Center in Ningbo City increased capital to Xingyuan Environmental Protection, a subsidiary of the listed company, with cash, amounting to RMB 500 million. At present, Xingyuan Environment and state-owned assets hold 56.9% and 43.1% of the equity of Xingyuan Environmental Protection, respectively.

Obviously, Ningbo State-owned Assets also cannot pull Xingyuan Environment out of the quagmire. For business needs, in August 2023, Xingyuan Environment applied to Xintou Group for a loan quota of 60 million yuan, with a loan interest rate annually reference to the loan interest rate of the same period obtained from financial institutions.

As of November 2023, Xingyuan Environment has accumulated 1.451 billion yuan of loans from Xintou Group, and Xingyuan Environment, which cannot repay the loans, announced a six-month extension for all the loans mentioned above. However, after six months, on May 31 of this year, Xingyuan Environment extended the above loans for another six months.

Until the "life and death", Xintou Group announced a debt-to-equity swap of 500 million yuan to increase capital for Xingyuan Environment's subsidiary Xingyuan Environmental Protection, which to some extent alleviated Xingyuan Environment's debt burden and temporarily lifted Xingyuan Environment's delisting crisis.

Debt-to-asset ratio is 90%, and the market value has dropped by more than 50% in six months.

Xingyuan Environment is one of the earliest enterprises engaged in the production of filter presses in China, and the company's business was relatively single when it went public. Anheuser-Busch InBev was once Xingyuan Environment's largest customer, and the company provided it with beer wort filtration systems. At the same time, Xingyuan Environment sold fully automatic silicon carbide membrane filter presses and systems to GCL Tech and titanium dioxide-specific cantilever filter press and systems to the then Bally Union.

By 2023, Xingyuan Environment's business covers three major sectors: equipment manufacturing, energy storage and dual carbon, and comprehensive environmental governance. Last year, the proportion of revenue from Xingyuan Environment's environmental protection equipment and smart environmental protection business increased by nearly 15 percentage points, reaching about 49%, which was the main source of Xingyuan Environment's revenue and the only business with an increase in gross margin last year.

Xingyuan Environment's equipment manufacturing sector mainly includes its subsidiary Xingyuan Environmental Protection and Xin Zhi Hui De. Among them, Xin Zhi Hui De is a joint venture company established in 2021 with a capital of 180 million yuan by Xingyuan Environmental Protection's subsidiary Xin Zhi Technology and Shandong New Hope Liuhe Group Co., Ltd., a subsidiary of Xintou Group. Xingyuan Environmental Protection holds 51% of the shares, and Xintou Group holds 49% of the shares. Xin Zhi Hui De mainly focuses on the research and development and sales of agricultural and animal husbandry equipment.

The Xingyuan Environmental Protection that Ningbo State-owned Assets and Xintou Group successively increased capital in is the main body of the company's traditional filter press business. In 2023, Xingyuan Environmental Protection's operating income was about 397 million yuan, and it achieved a net profit of about 5.85 million yuan. Although the profit scale has shrunk to a certain extent, Xingyuan Environmental Protection is still an important subsidiary of Xingyuan Environment and the only profitable one.

At present, in the field of new energy, the filter press is gradually replacing the centrifuge, and it is used in the filtration, washing, and wastewater treatment links of lithium minerals, lithium extraction from salt lakes, positive and negative electrodes, lithium battery positive electrode binder PVDF, and battery recycling processes. In addition, Xingyuan Environmental Protection is also involved in distributed photovoltaic power generation on the roof and other businesses.

Xingyuan Environment has been unable to achieve profitability for a long time. Since 2018, Xingyuan Environment has changed hands twice, and it has lost money for five of the six years. The loss in 2023 has expanded to 990 million yuan.

Starting from 2015, Xingyuan Environment's operating activities have been in a state of net outflow of cash for most of the time. Xingyuan Environment, which cannot obtain funding support through daily sales activities, has faced a situation of borrowing heavily from Xintou Group, as mentioned earlier. When Xintou Group took over in 2019, Xingyuan Environment's debt-to-asset ratio was already at a high level of 74%, and the company's debt-to-asset ratio continued to rise to 90.21% in 2023.

As of the end of the first quarter of this year, Xingyuan Environment's book currency funds were about 566 million yuan, but the company also had short-term loans of 723 million yuan, non-current liabilities that would mature within one year of 653 million yuan, and long-term loans of 1.951 billion yuan. In addition, the balances of other accounts payable and long-term accounts payable for projects such as loans from affiliates of Xintou Group were also 2.174 billion yuan and 512 million yuan, respectively.

Under a high debt-to-asset ratio, Xingyuan Environment spent 325 million yuan on financial interest expenses last year with a revenue of 732 million yuan.

Under the burden of debt, financial fraud has also made investors vote against Xingyuan Environment with their feet.

On the first trading day of 2024, Xingyuan Environment received a penalty notice from the CSRC. Because in 2016 and 2017, Xingyuan Environment's wholly-owned subsidiary Zhongyi Ecology had inflated the project revenue and costs in the PPP projects of Meilicheng Town (Section 1, Section 2) and the ocean ecological corridor renovation project in Bendao District, Dongtou, Wenzhou, Zhejiang. The Zhejiang Regulatory Bureau ordered Xingyuan Environment to make corrections, gave a warning, and imposed a fine of 2 million yuan.

Since then, the stock price of xingyuan environment technology has fallen from 2.7 yuan to the warning line of 1 yuan all the way. In less than half a year, xingyuan environment technology's decline has exceeded 52%, and has reached the current critical moment.