Recently, dyestuff giant Jiangsu Yabang Dyestuff Co.,Ltd. (603188.SH) announced that the company plans to transfer its 100% equity stake in Lianyungang Yaran Housing Rental Co., Ltd. (hereinafter referred to as "Yaran Rental") through public listing on the Jiangsu Property Rights Exchange, with an initial listing price of 71.8769 million yuan.
A relevant person in charge at Jiangsu Yabang Dyestuff indicated that this transaction is primarily based on considerations of revitalizing idle assets, responding to industry difficulties, and alleviating capital pressure. It has been noted that the company has suffered losses for six consecutive years, with cumulative net losses reaching 2.764 billion yuan from 2019 to 2024.
**Continuous Losses**
Jiangsu Yabang Dyestuff was once a star enterprise in the dyestuff industry, successfully listing on the Shanghai Stock Exchange main board in September 2014. The company focuses on fine chemicals, primarily producing anthraquinone-structured disperse dyes and vat dyes, later expanding its business to solvent dyes and agricultural pharmaceutical fields.
However, 2018 became a turning point in its development. At that time, the Lianyungang Chemical Park, where Jiangsu Yabang Dyestuff's main production capacity was concentrated, was shut down for rectification due to safety and environmental issues, resulting in severely insufficient operating rates, significant decline in sales revenue, and substantial increase in shutdown rectification costs.
Financial data shows that from 2019-2024, Jiangsu Yabang Dyestuff achieved operating revenues of 1.421 billion yuan, 653 million yuan, 841 million yuan, 966 million yuan, 651 million yuan, and 701 million yuan respectively. Non-recurring item adjusted net profits attributable to shareholders were -212 million yuan, -617 million yuan, -365 million yuan, -696 million yuan, -651 million yuan, and -223 million yuan respectively, with cumulative net losses over six years totaling 2.764 billion yuan.
The aforementioned person in charge at Jiangsu Yabang Dyestuff stated that environmental and safety factors leading to subsidiary shutdowns did indeed impact company performance. Additionally, they indicated that market competition brought by capacity expansion in the textile printing and dyeing industry, combined with weak downstream demand, collectively contributed to performance pressure.
Industry researcher Hong Qianjin noted that in recent years, Jiangsu Yabang Dyestuff's pesticide industry has been affected by production shutdowns due to safety and environmental rectification, coupled with intensified competition in the domestic pesticide industry, leading to declining related product prices and insufficient profit margins.
Hong Qianjin believes that currently, the textile printing and dyeing industry still faces numerous challenges, with complex international environments, escalating geopolitical conflicts, and prevalent trade protectionism. Simultaneously, insufficient effective domestic demand needs further stimulation. Under the industry structure of fully competitive dye markets with high regional concentration, various dye manufacturers are operating under pressure.
Jiangsu Yabang Dyestuff stated in its announcement that insufficient effective domestic demand, prominent supply-demand contradictions, high costs, and other adverse factors have brought enormous pressure to traditional manufacturing operations and development, with industry recovery still facing numerous difficulties and challenges.
In 2024, Jiangsu Yabang Dyestuff's performance showed some improvement. Financial reports indicate that the company achieved operating revenue of 701 million yuan, up 7.80% year-on-year; net loss attributable to shareholders was 265 million yuan, representing a loss reduction of 313 million yuan compared to 2023.
Meanwhile, Jiangsu Yabang Dyestuff's equity structure underwent major changes in 2024. On October 24, 2024, the Changzhou Intermediate People's Court ruled that 118.9 million shares held by Yabang Group and its concerted party Xu Xudong would be transferred to Guojing Group to offset debts. After this change, the shareholding ratio of Yabang Group and its concerted parties plummeted from 22.35% to 1.49%, while Guojing Group's shareholding ratio surged from 8.79% to 29.64%, becoming the controlling shareholder. The company's actual controller changed to the Changzhou Wujin District State-owned Assets Management Office.
Industry analysts believe that the entry of state-backed Guojing Group as the controlling party may leverage its resources and strength to bring new development ideas and directions to Jiangsu Yabang Dyestuff, providing assistance in business expansion, financial support, and strategic planning.
**Selling Subsidiaries Again**
Against the backdrop of continuous losses and equity changes, asset disposal has become an important measure for Jiangsu Yabang Dyestuff to relieve pressure and optimize asset structure.
The aforementioned announcement shows that Yaran Rental was established in March 2024, with main business including housing rental, information consulting services, and domestic services. As of June 30, 2025, the company's total assets had a book value of 48.2069 million yuan, with total liabilities of 1.3344 million yuan.
Regarding this, Hong Qianjin stated that the core motivation for asset disposal is to alleviate liquidity crisis and optimize asset structure. He pointed out that Jiangsu Yabang Dyestuff's sale of 100% equity in Yaran Rental is essentially a passive choice to address cash flow pressure caused by continuous losses. From financial data, the company has suffered losses year after year, and in a state of long-term "bleeding," urgently needs to supplement liquidity through asset realization.
In Hong Qianjin's view, as a light-asset company established only a year and a half ago, selling Yaran Rental for 71.87 million yuan can directly bring about 23.67 million yuan in premium, which is significant for alleviating short-term capital pressure.
"Additionally, strategic contraction to focus on core business is also underlying logic. Yaran Rental engages in non-core businesses such as housing rental, which has low synergy with Jiangsu Yabang Dyestuff's traditional chemical main business. After divesting such assets, the company can concentrate resources on environmental rectification and chemical main business, aligning with the strategic adjustment direction after state capital entry," Hong Qianjin stated.
The aforementioned person in charge at Jiangsu Yabang Dyestuff indicated that this transaction involves idle company assets, and the sale will help the company revitalize funds. At the same time, poor industry conditions and widespread capital pressure are also main factors driving this transaction.
Jiangsu Yabang Dyestuff stated that this equity transfer aims to further revitalize the company's existing assets, optimize asset structure, reduce company management and operating costs, and improve capital utilization efficiency.
It's worth noting that this is not the first time Jiangsu Yabang Dyestuff has sold subsidiaries. From December 2023 to January 2, 2024, Jiangsu Yabang Dyestuff successfully transferred 100% equity stakes in three subsidiaries - Anhui Yabang Chemical Co., Ltd., Changzhou Linjiang Chemical Co., Ltd., and Jiangsu Yabang Industrial Investment Co., Ltd. - for 185 million yuan through the Changzhou Property Rights Exchange Center.
"Among the three transferred subsidiaries, Linjiang Chemical and Anhui Yabang were relocated and stored enterprises that had been idle for many years; Yabang Industrial was an equity investment enterprise that only invested in one company - Yabang (Bangladesh) Chemical and Pharmaceutical Industrial Park Development Co., Ltd., and this project had not yet substantially started," Jiangsu Yabang Dyestuff stated at the time. The transfer of the above subsidiary equity stakes would help save management costs, reduce management risks of suspended enterprises, and effectively transfer risk burdens such as soil remediation risks at old factory sites, overseas investment risks, employment risks, and difficulties in collecting storage payments.
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