On September 24, Xinjiang Lixin Energy Co.,Ltd. announced that Shandong Electric Power Construction Third Engineering Co., Ltd. (hereinafter referred to as "Shandong Electric Construction"), a shareholder holding more than 5% of the company's shares, completed its share reduction plan.
On August 12, Shandong Electric Construction planned to reduce its holdings by 9.333 million shares through centralized bidding transactions, representing 1% of the company's total share capital. The swift completion of the reduction by one of the major shareholders during the listed company's push for private placement financing deserves attention.
Xinjiang Lixin Energy Co.,Ltd.'s main business is wind and solar power generation. The company's performance deteriorated the year after listing and has continued to decline since then, with bad debt provisions on accounts receivable being one of the main factors. As of the end of June this year, the company's accounts receivable book balance reached 2.7 billion yuan, of which over 1.1 billion yuan in receivables were aged more than 3 years, with high impairment risks still looming.
Additionally, Xinjiang Lixin Energy Co.,Ltd. faces serious cash flow and debt issues, with its debt ratio rising to over 80%, and annual financial expenses consistently around 200 million yuan, further eroding profits.
In November 2023, Xinjiang Lixin Energy Co.,Ltd. planned a private placement to alleviate debt pressure. However, the private placement proposal has undergone six revisions and still hasn't been implemented. At this time, the swift completion of share reduction by major shareholders has dealt another blow to market confidence.
**Performance Deterioration in Second Year After Listing, High Bad Debt Losses with 1.1 Billion of 2.7 Billion Receivables Aged Over 3 Years**
Xinjiang Lixin Energy Co.,Ltd. was established in 2014, with its main business being investment, development, construction, and operation of wind power and solar power generation projects. In July 2022, the company completed its IPO on the Shenzhen Stock Exchange, achieving net profit attributable to shareholders of 196 million yuan that year, up 37.57% year-on-year, continuing the upward trend of 16.89% and 21.24% from the previous two years.
However, starting from the second year after listing, Xinjiang Lixin Energy Co.,Ltd.'s performance quickly deteriorated. In 2023 and 2024, the company's net profit attributable to shareholders declined by 31.01% and 62.89% year-on-year respectively. In the first half of this year, it fell another 90.17% year-on-year, approaching the edge of losses.
Bad debt provisions on accounts receivable are one of the main reasons for the company's continuous performance decline. Starting from 2023, Xinjiang Lixin Energy Co.,Ltd.'s bad debt losses increased significantly, and accounts receivable turnover days also showed a marked increase in 2024, with cash collection conditions continuing to deteriorate.
Bad debt provisions on accounts receivable are one of the main factors behind poor performance.
Financial reports show that as of the end of 2024, accounts receivable from State Grid Xinjiang Electric Power Co., Ltd. amounted to 2.615 billion yuan, accounting for 96.01%, making it Xinjiang Lixin Energy Co.,Ltd.'s largest debtor.
Although State Grid Xinjiang Electric Power belongs to a large state-owned enterprise with high creditworthiness, Xinjiang Lixin Energy Co.,Ltd.'s annual bad debt losses on accounts receivable still reached 167 million yuan in 2024, maintaining high levels after impairment of 211 million yuan in 2023.
Notably, as of the end of June this year, Xinjiang Lixin Energy Co.,Ltd.'s accounts receivable book balance was 2.724 billion yuan, of which 1.107 billion yuan in receivables were aged more than 3 years, with high impairment risks still looming.
**Debt Ratio Rising Above 80%, Private Placement Proposal with Six Revisions Over Two Years Still Unfinalized**
Besides increasing performance pressure, Xinjiang Lixin Energy Co.,Ltd.'s cash flow and debt issues are also very prominent.
From 2022 to 2024, Xinjiang Lixin Energy Co.,Ltd.'s operating cash flows were 812 million yuan, 504 million yuan, and 356 million yuan respectively, while capital expenditures were 1.74 billion yuan, 1.154 billion yuan, and 3.79 billion yuan respectively, all far exceeding operating cash flows in the same periods, with funds consistently insufficient; during the same periods, the company's cash collection ratios were 98.8%, 67.3%, and 63.9% respectively, with the declining trend showing no signs of bottoming out.
In 2022, Xinjiang Lixin Energy Co.,Ltd.'s IPO raised 789 million yuan, reducing the debt ratio from 73% to about 68%, but it has risen again since then. As of the end of June 2025, the debt ratio reached 80.83%, at historical highs.
With high debt levels, the company's annual financial expenses have long remained around 200 million yuan, with 101 million yuan in the first half of this year, up 7.44% year-on-year, further eroding profits.
To alleviate debt pressure, in November 2023, Xinjiang Lixin Energy Co.,Ltd. planned a private placement to raise 1.98 billion yuan for the Qitai County 300MW wind-solar hybrid power generation project, including 200MW wind power, 100MW solar power, and 75MW/300MWh energy storage projects, while supplementing working capital.
Subsequently, the aforementioned private placement proposal has undergone six revisions including changes in fundraising purposes, controlling shareholder renaming, subscription ratio adjustments for issuance targets, project total investment adjustments, and total fundraising amount reductions, spanning nearly two years and still remaining unfinalized.
While Xinjiang Lixin Energy Co.,Ltd. is fully pushing forward with private placement financing, the swift completion of share reduction plans by major shareholders will undoubtedly further impact market confidence in the company's future prospects.
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