Inner Mongolia Xingye Silver & Tin Mining Co., Ltd. (SZ:000426, share price: 43.66 yuan, market cap: 77.524 billion yuan) submitted its initial listing application to the Hong Kong Stock Exchange on May 25, with China International Capital Corporation Limited acting as the sole sponsor. As a long-established mining company listed on the A-share market, the firm aims to broaden its overseas financing channels to support its extensive global expansion strategy. The company's primary operations cover polymetallic resources including silver, tin, zinc, lead, copper, antimony, gold, and iron. Based on silver and tin reserves, it ranks as the largest silver producer in Asia and the second-largest tin mining enterprise in China.
Benefiting from rising prices of non-ferrous and precious metals and increased production, the company's full-year revenue for 2025 grew by 30.09% to 5.555 billion yuan, while annual profit increased by 13.84% to 1.708 billion yuan. However, beneath the dual growth in revenue and profit, the company's asset quality, financial leverage, and internal control management in daily operations are under scrutiny.
For instance, due to recent acquisitions, the company's cash flow from investing activities showed significant net outflows. Short-term debt repayment indicators have become volatile, and liquidity pressures have forced the firm to frequently resort to financing leases and substantial guarantees to secure funds. Concurrently, the shares held by the controlling shareholder are fully pledged. Furthermore, a performance compensation payment arising from a historical acquisition was ultimately converted into trust units, and the listed company fully provisioned for it as a bad debt.
Inner Mongolia Xingye Silver & Tin Mining has been active in the M&A market in recent years. In 2025, it completed the acquisition of an 85% equity stake in Yubang Mining. In the same year, it acquired 100% of Atlantic Tin through a tender offer for a cash consideration of 98 million Australian dollars, securing a tin project in Morocco and enhancing its international layout for tin resources. However, this high-frequency, large-scale capital activity directly impacted the company's cash flow structure. In 2025, although net cash flow from operating activities reached 2.488 billion yuan, net cash flow from investing activities recorded an outflow of 2.937 billion yuan, significantly larger than the 1.004 billion yuan outflow in the same period last year.
The substantial expenditures on the investment side rapidly increased the company's debt leverage, leading to significant changes in the debt structure on the balance sheet. According to the prospectus, as of the end of 2025, the balance of long-term bank loans and other borrowings for Inner Mongolia Xingye Silver & Tin Mining rose to 3.056 billion yuan, an increase of 92.98% compared to 1.583 billion yuan at the end of the previous year.
The prospectus also shows that as of the end of 2025, Inner Mongolia Xingye Silver & Tin Mining's current ratio was only 0.5, and its quick ratio was only 0.4.
A direct manifestation of the tightening liquidity is the company's increasing reliance on more complex financial instruments in its daily financing operations to monetize existing assets. According to announcements, the company recently entered into a guarantee contract with Everbright Financial Leasing Co., Ltd. Its wholly-owned subsidiary, Yinman Mining, used its core assets, such as non-ferrous metal ore mining and processing equipment, to obtain financing from Everbright Financial Leasing through a sale-and-leaseback arrangement. The financing amount does not exceed 300 million yuan, with a lease term of three years. The company provided a joint and several liability guarantee for this financing lease business of Yinman Mining.
In addition to providing guarantees for its own subsidiaries' financing, Inner Mongolia Xingye Silver & Tin Mining frequently uses the credit of the listed company to provide substantial financing support for its associated enterprises. In January 2026, the company approved a proposal for estimated guarantee limits for 2026, agreeing to provide new guarantee limits totaling no more than 7.362 billion yuan for the company, its subsidiaries, and associated companies during 2026. Among these, the guarantee limit for subsidiaries and associated companies with a debt-to-asset ratio exceeding 70% reached 1.22 billion yuan. Recently, Chen Barag Banner Tiantong Mining Co., Ltd., in which the company holds a stake, applied for financing not exceeding 220 million yuan from Daye Trust for operational development needs. Inner Mongolia Xingye Silver & Tin Mining provided a full joint and several liability guarantee, with a guarantee period of three years from the expiry of the main contract. As a risk mitigation measure, Tiantong Mining provided a counter-guarantee by pledging its mining right as first-priority collateral, and its major shareholder also pledged 51% of its equity.
In response to external concerns about short-term liquidity and high-frequency guarantee risks, Inner Mongolia Xingye Silver & Tin Mining stated that the increase in long-term borrowings is part of an "active optimization of financial arrangements" and not due to liquidity pressure. It also noted that the 220 million yuan guarantee for the associated company is backed by mining rights and equity counter-guarantees, making the actual risk exposure lower than the nominal amount. The company emphasized that as of the end of 2025, net operating cash flow reached 2.49 billion yuan, external financing channels are sufficient, and the overall financial condition is robust.
According to the prospectus, as of the end of 2025, the controlling shareholder, Xingye Group, held 363 million A-shares of Inner Mongolia Xingye Silver & Tin Mining, representing 20.46% of the company's total issued share capital. Notably, all 363 million shares held by Xingye Group are pledged, reaching a 100% pledge ratio.
More complex than the full share pledge is a significant performance compensation dispute between the controlling shareholder and the listed company arising from a historical acquisition. The matter concluded with the debt being offset by trust units, which were fully provided for as bad debt by the listed company.
In 2016, Inner Mongolia Xingye Silver & Tin Mining acquired 100% equity of Xi Ujimqin Banner Yinman Mining Co., Ltd. from Xingye Group and its concert parties through a share issuance and cash payment, with a total transaction value of 2.414 billion yuan. A strict performance compensation agreement was signed at the time of the transaction. However, during the subsequent three-year commitment period, Yinman Mining failed to achieve the cumulative performance targets. According to the agreement, Xingye Group and its concert parties were required to pay a total of 771 million yuan in performance compensation to the listed company. However, as Xingye Group later faced severe debt crises and entered comprehensive bankruptcy restructuring proceedings, this substantial compensation payment remained overdue for an extended period.
After lengthy judicial procedures and debt restructuring, the final settlement plan for this creditor's right involved offsetting the debt by receiving trust beneficiary units. In July 2024, in accordance with the restructuring plan, Inner Mongolia Xingye Silver & Tin Mining signed a transfer agreement with Inner Mongolia Hengshuo Mining Co., Ltd., formally receiving approximately 937 million trust units of Yunnan Trust Xiangyun No. 20 Restructuring Service Trust. Legally, this was considered the fulfillment of Xingye Group's performance compensation obligation to the listed company.
Although the debt was legally severed, the financial interests of the listed company were not substantively restored. Inner Mongolia Xingye Silver & Tin Mining disclosed in its financial reports that, according to the consolidated restructuring plan draft, after the receivables from Xingye Group were converted into trust beneficiary units, the specific settlement amount and timing remained uncertain. Based on the principle of prudence, the company fully provided for the receivables from Xingye Group as bad debt. This means that the impairment from the high-premium asset acquisition years ago was ultimately absorbed by the listed company through bad debt provisions in the financial statements. Regarding National Trust, a shareholder that inherited the performance compensation obligation through judicial transfer, the company handled it by repurchasing 61.5565 million shares held by it at a total price of 1 yuan and subsequently canceling them.
In response to inquiries about bad debt provisions and the high pledge ratio of the major shareholder, Inner Mongolia Xingye Silver & Tin Mining stated that since Yinman Mining resumed production and became profitable, it has distributed cumulative cash dividends totaling 2.97 billion yuan to the company, which actually exceeds the 2.414 billion yuan acquisition price in 2016. The company also explicitly promised that the proceeds from the Hong Kong listing will be strictly used for the development of its main business, including domestic and overseas mine acquisitions, technological research and development, and working capital supplementation, and "do not involve the controlling shareholder and its affiliates."
The prospectus shows that Inner Mongolia Xingye Silver & Tin Mining primarily obtains ore resources through underground mining and has allocated funds for safety investments. However, within less than a year, two of its most important mining enterprises successively experienced fatal safety accidents.
The first accident occurred at Tibet Bosheng Mining Development Co., Ltd. Bosheng Mining is a key project for the company's expansion into gold resources, with an annual ore processing capacity of 150,000 tons, primarily producing gold concentrate. In the early hours of July 23, 2024, a safety accident occurred during mining operations by Bosheng Mining's mining contractor, Qiaorun Construction Engineering Group Co., Ltd. The accident happened when an operator was crushed between a scraper and the tunnel wall during ore removal operations at the No. 6 adit, resulting in the unfortunate death of one on-site construction worker after failed hospital抢救. Following the accident, Bosheng Mining's mining and processing areas were completely shut down for investigation by relevant authorities.
Affected by the shutdown and other factors, Bosheng Mining reported zero operating revenue and a net loss of 13.83 million yuan in the first quarter of 2024. After a lengthy nine-month shutdown for rectification, the processing plant of Bosheng Mining officially resumed operations on April 24, 2025, only after obtaining approval from local regulators. However, despite the processing plant restarting, the mining area remains shut down to date due to strict rectification requirements imposed by regulators regarding the tunnel cross-section. The mining area must undergo simultaneous technological upgrades, optimization of mining methods, and processes before resuming operations. The prolonged inability to restore normal production at the mining end has made it difficult for this highly anticipated gold mining project to release expected economic benefits in the short term.
Just a few months later, another accident occurred at the company's main mine. Yinman Mining is the absolute pillar of the company's revenue and profit. It primarily contains lead-zinc-silver and copper-tin-silver-zinc ores, with high silver content, high ore grade, and a long remaining service life. It is one of the largest silver-producing mines in China and a key producer of tin concentrate in the country. According to data from the Tin Branch of the China Nonferrous Metals Industry Association, Yinman Mining produced 8,902 tons of tin metal in 2024, ranking as the second-largest tin concentrate producer domestically.
On March 9, 2025, a safety accident occurred during preparatory mining operations by the engineering project department of Henan Jinyuan Construction Co., Ltd., the mining contractor for Yinman Mining, resulting in the unfortunate death of one on-site construction worker after failed hospital抢救. This accident directly triggered regulatory intervention, forcing a complete shutdown of Yinman Mining's mining area. It was not until over a month later, on April 15, 2025, that the Inner Mongolia Autonomous Region Mine Safety Supervision Bureau issued a notice approving the resumption of production for the 1.65 million-ton underground mining project at the Baiyin Chagan East Mountain mining area of Yinman Mining. The mining area officially resumed operations on April 16.
It should also be noted that as early as February 2019, a safety accident occurred at the Yinman Mining area, resulting in 22 deaths and 28 injuries. That accident was caused by a subcontractor using a scrapped vehicle with failed brakes during operations.
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