Shanxi Taigang Stainless Steel Co.,Ltd. (SZ000825, share price 3.52 yuan, market cap 20.051 billion yuan) announced on September 2 that it accepted a court ruling to take ownership of a 20% equity stake in Xinzhou Thermal Power Co., Ltd. (Xinzhou Thermal) held by the debtor Shanxi Xinbang Trading Co., Ltd. (Xinbang Company) as debt repayment. The share transfer registration has been completed, officially listing the company as a shareholder of Xinzhou Thermal.
The 165 million yuan equity-for-debt transaction stems from a contract dispute over 225.8 million yuan in unpaid goods owed by Xinbang Company to Shanxi Taigang Stainless Steel Co.,Ltd. After two court judgments, two failed judicial auctions, and a 60-day judicial sale period that attracted no buyers, the court ultimately ruled to transfer the 20% stake in Xinzhou Thermal to Shanxi Taigang Stainless Steel Co.,Ltd. at the failed auction price of 165 million yuan to offset an equivalent amount of the debt.
According to the announcement, on February 11, 2026, the company's tenth board of directors approved a resolution to execute the equity-for-debt litigation plan for Xinzhou Thermal. If the court failed to successfully sell the 20% stake held by Xinbang Company by March 16, 2026, the company planned to accept the equity at the court-determined price of 165 million yuan to settle the corresponding outstanding goods payment.
On April 16, 2026, the company disclosed a progress update upon receiving an execution ruling from the Taiyuan Jiancaoping District People's Court. Given that both the judicial auction and judicial sale had failed, the company agreed to accept the equity at the failed auction price, which complies with legal provisions and received court approval. In accordance with Articles 20 and 26 of the Supreme People's Court's regulations on judicial auction and sale of property in civil enforcement, the court ruled that the 20% stake in Xinzhou Thermal held by Xinbang Company would be valued at 165 million yuan and delivered to Shanxi Taigang Stainless Steel Co.,Ltd. as repayment for an equivalent portion of the debt owed.
Recently, the company learned through inquiries with the Xinzhou Administrative Approval Service Bureau that the equity transfer registration has been completed. Shanxi Taigang Stainless Steel Co.,Ltd. is now registered as a shareholder holding 20% of Xinzhou Thermal. As Xinzhou Thermal is an associate company, this transaction will not affect the company's consolidated financial statements. The equity-for-debt arrangement was carried out through judicial procedures, involves no agreement signing, does not constitute a related-party transaction, and does not qualify as a major asset restructuring.
Shanxi Taigang Stainless Steel Co.,Ltd.'s controlling shareholder is Taiyuan Iron and Steel (Group) Co., Ltd., holding 63.31% of shares. The company operates a complete steel production process with related facilities, focusing on the production and sale of stainless steel and other steel products, billets, ingots, ferrous metals, ferroalloys, and metal products. Key offerings include stainless steel, cold-rolled silicon steel, carbon steel hot-rolled coils, railway wheel axle steel, and alloy die steel.
The company holds the top domestic market share for products such as electromagnetic pure iron, ultra-pure ferritic steel, duplex steel, tank-container steel, non-magnetic steel, railway passenger and freight wagon steel, and railway wheel axle steel. New products including soft-state stainless steel precision foil (hand-tearable steel), pen tip steel, and high-manganese high-nitrogen stainless steel play an important role in the localization of critical materials in China.
According to the company's 2026 semi-annual report, revenue for the first half of 2026 reached 47.439 billion yuan, up 3.20% year-on-year. Net profit attributable to shareholders stood at 135 million yuan, down 65.53% year-on-year. Excluding non-recurring items, net profit was 100 million yuan, a decrease of 68.31%. Basic earnings per share were 0.024 yuan. As of the reporting period end, total assets were 63.392 billion yuan, with net assets attributable to shareholders at 32.749 billion yuan, and 145,500 ordinary shareholders recorded.
The semi-annual report indicated structural divergence in steel supply and demand in the first half of 2026. National crude steel output declined 3.0% year-on-year, apparent consumption fell 3.6%, and stainless steel net exports dropped 22.1%, intensifying domestic supply-demand imbalances. The dual squeeze on purchase and sales prices was evident, with steel prices edging lower while raw material costs rose, putting pressure on corporate profitability.
Regarding shareholder returns, the company implemented its 2025 annual dividend plan, distributing 0.09 yuan (including tax) per 10 shares, totaling 51.2662 million yuan in cash dividends, representing 99.49% of net profit attributable to shareholders. The company plans no interim dividend for the first half of 2026, with no bonus shares or capital reserve conversion.
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