Shandong Hiking International Co.,Ltd. (600735.SH, stock price 8.63 yuan, market value 3.7 billion yuan) released its 2025 interim report on the evening of August 26. The company achieved revenue of approximately 669 million yuan in the first half, down 24.92% year-on-year. Net profit attributable to shareholders of the listed company was approximately 12.8672 million yuan, down 39.45% year-on-year, while non-GAAP net profit was approximately 5.3099 million yuan, down 73.61% year-on-year. The company will not distribute profits or convert capital reserves to share capital during the reporting period.
On the same evening, Shandong Hiking International also announced that it received an "Administrative Regulatory Measures Decision" from the Qingdao Securities Regulatory Bureau, stating that the controlling shareholder Xinhuajin Group and its affiliates have non-operating fund occupation of the company totaling 406 million yuan. If the company fails to recover the occupied funds within one month, the Shanghai Stock Exchange will implement other risk warnings on the company's stock. If it fails to recover the occupied funds within six months, the Shanghai Stock Exchange will suspend trading of the company's stock. If rectification is not completed within two months after suspension, delisting risk warning will be implemented, and if rectification is still not completed within another two months, the termination of the company's stock listing and trading will be decided.
By business segment, Shandong Hiking International's hair products export business achieved revenue of 414 million yuan in the first half, down 11.29% year-on-year. The company stated that "during the reporting period, affected by factors such as increased U.S. tariffs, serious inflation in Europe, America and Japan, rapid rise in raw material prices, and sluggish market demand, competition in the hair products industry intensified, facing unprecedented challenges."
Regarding cross-border import e-commerce business, the company achieved revenue of approximately 143 million yuan in the first half, down 28.56% year-on-year. The company attributed this mainly to "exchange rate fluctuations, shipping costs, and geopolitical uncertainties."
For textile and apparel export business, Shandong Hiking International achieved revenue of 99.4822 million yuan in the first half, up 1.69% year-on-year.
During the reporting period, among Shandong Hiking International's four main subsidiaries, two were loss-making and two were profitable. Specifically, Shandong Xinhuajin Textile Co., Ltd. lost 3.6055 million yuan, Huayue Limited Liability Company lost 3.5124 million yuan, Xinhuajin Group Shandong Jinsheng Hair Products Co., Ltd. earned 21.0631 million yuan, and Shanghai Lizhi Industrial Co., Ltd. earned 8.5987 million yuan.
The company also disclosed some potential risks in its interim report. Among them, its controlling subsidiary Qingdao Haizheng faces the risk of being unable to start production on schedule. Specifically, according to relevant agreements from the company's 2023 acquisition of Qingdao Haizheng, Xinhuajin Group promised and ensured that Qingdao Haizheng would obtain all necessary qualification certificates, approval documents and production readiness by December 31, 2025. As of now, the progress of Qingdao Haizheng's qualification certificate processing has not met expectations, with risks of being unable to start production within the scheduled timeframe.
Additionally, because Shanghai Lizhi Industrial Co., Ltd. failed to meet performance commitments during the performance compensation period, Wang Liyang and Ke Yi need to pay performance compensation of 15.9797 million yuan to the company. As of the interim report disclosure date, Shandong Hiking International has not received the performance compensation and interest that Wang Liyang and Ke Yi should pay, and the company will recover this amount through litigation.
It was also noted that in the "Important Notice" section of the interim report, Vice President Cao Xu of Shandong Hiking International (who is also responsible for accounting work and head of the accounting department) did not sign a written confirmation opinion guaranteeing the authenticity, accuracy, and completeness of the interim report content.
In addition to disclosing delisting risks in a separate announcement, Shandong Hiking International provided more detailed disclosure of the fund occupation issue in its interim report. The company explicitly disclosed the existence of non-operating fund occupation by its controlling shareholder. As of the end of the reporting period, the controlling shareholder Xinhuajin Group and its affiliates occupied funds totaling 406 million yuan, accounting for 33.34% of the company's latest audited net assets attributable to the parent company.
The interim report clearly mentioned that the occupied funds were briefly returned in April 2025, but were transferred out again the following month due to financial pressure from strategic investors. Although company management provided early warnings and issued "Risk Notice Letters," they were unable to prevent the funds from being occupied again. In May 2025, the listed company had 406 million yuan transferred out again to strategic investors of Xinhuajin Group, with Xinhuajin Group once again occupying the listed company's funds.
Shandong Hiking International also stated directly in its "Major Risk Warning" that if it fails to recover the occupied funds within the specified period, the company's stock may face delisting risk warning and even termination of listing and trading.
On August 26, Shandong Hiking International closed up 3.11% with trading volume of 209 million yuan.
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