Nanfang Black Sesame Group Co.,Ltd. (000716.SH) has faced numerous challenges in recent years. Recently, the company disclosed progress on its controlling shareholder's agreement to transfer equity, signaling an imminent change in control. With the year-end approaching, whether the new controlling party will complete the takeover by 2026 remains uncertain. The company stated that the approval process and other formalities are being handled by the acquiring party, making it difficult to specify a timeline.
In August this year, Nanfang Black Sesame Group's controlling shareholder, Guangxi Black Five Categories Food Group Co., Ltd. ("Black Five Categories Group"), signed a share transfer agreement with Guangxi Tourism Development Great Health Industry Group Co., Ltd. ("GTD Great Health"). The agreement stipulates that Black Five Categories Group will transfer approximately 151 million shares (20% of the company's total equity) to GTD Great Health at 6.25 yuan per share, totaling 942 million yuan.
The "acquiring party" referred to by Nanfang Black Sesame Group is GTD Great Health. What impact will this change in control have? According to analysis by Bai Wenxi, Deputy Chairman of the China Enterprise Capital Alliance and Chief Economist for China, once the transaction is completed, the Guangxi State-owned Assets Supervision and Administration Commission will become the actual controller through GTD Great Health, transforming the company from private ownership to a mixed system of "state-controlled ownership with market-oriented operations." State backing could lower financing costs, secure policy loans and subsidies, and alleviate credit constraints caused by recent losses and legal disputes over guarantees. In terms of industrial synergy, GTD Great Health focuses on health tourism and healthy foods, operating scenic spots, hotels, sanatoriums, and pharmacy chains. This could integrate Nanfang Black Sesame Group's products like sesame paste and sesame balls into retail, catering, and pharmacy channels, achieving a "scenario-as-channel" transition.
Bai further noted that state-owned enterprises typically adopt a more cautious management style, likely reducing aggressive mergers and acquisitions in the short term to focus on "stopping losses, ensuring compliance, and reducing debt" before considering expansion. If integration proceeds smoothly, Guangxi's specialty agricultural products (such as sesame, rice noodles, and sugarcane) could be consolidated into a regional health food cluster.
As of December 11, Nanfang Black Sesame Group's stock closed at 6.07 yuan per share, down 2.72%, with a total market capitalization of 4.57 billion yuan.
**Control Shift: Guangxi State-Owned Capital Invests 942 Million Yuan** On December 10, Nanfang Black Sesame Group announced that on August 8, 2025, Black Five Categories Group, former chairman Wei Qingwen (who has since stepped down), and three other key shareholders signed a "Voting Rights Waiver Commitment." They agreed to irrevocably waive voting rights for approximately 133 million shares (17.66% of total equity) upon completion of the share transfer. Notably, two of the shareholders are brothers, while the third is their uncle.
Post-transaction, GTD Great Health will hold about 151 million shares, while Black Five Categories Group's stake will drop from 228 million shares (30.25%) to 74.05 million shares (9.83%) due to the transfer and court-mandated share disposals. The remaining key shareholders will collectively hold about 55.82 million shares (7.41%) with zero voting rights. Nanfang Black Sesame Group stated that after the transaction, its controlling shareholder will shift from Black Five Categories Group to GTD Great Health, with actual control transferring to Guangxi state-owned assets.
Following the agreement, GTD Great Health paid a 150 million yuan deposit on August 22, 2025, with the remaining 792 million yuan due within 10 working days after share transfer completion. Due diligence by appointed intermediaries concluded in late October, but approvals are still pending.
Shen Meng, Director of Chanson & Co., believes the shift from private to state ownership could strengthen development prospects, with potential additional support measures. He suggests Black Five Categories Group's primary motive for the agreement was to alleviate its own financial pressures through the sale.
Nanfang Black Sesame Group emphasized that post-transaction, it will maintain its existing business focus under performance commitment agreements, ensuring operational continuity despite the control change.
**Declining Revenue and Profits: When Will Losses End?** Nanfang Black Sesame Group's Q3 2025 report showed revenue of 1.469 billion yuan, down 7.52% year-on-year, and net profit of 6.82 million yuan, plunging 83.67%. Operating cash flow fell 29.86% to 97.08 million yuan. Key shareholders faced significant share pledges and freezes, reflecting financial strain.
In 2022, the company reported a full-year net loss of 140 million yuan, with only Q1 showing profitability. A notable 2022 transaction involved a 500 million yuan investment in Tianchen New Energy, a lithium battery component firm, which recorded a 13.52 million yuan loss. Analysts attribute recent struggles to product line stagnation, lack of innovation, and poor management by the controlling shareholder.
Zhu Danpeng, a food industry analyst, criticized the company's diversification into unrelated sectors, which failed to yield results due to operational shortcomings. Traditional and e-commerce sales channels also underperformed, with a significant drop in distributors and stagnant online growth.
**Regulatory Scrutiny and Internal Control Failures** In June, Nanfang Black Sesame Group received a regulatory warning for non-operational fund usage by its controlling shareholder and related parties, as well as undisclosed external guarantees dating back to 2020. Former chairman Wei Qingwen, despite retiring in 2024, was fined 100,000 yuan for his role in these violations.
Bai Wenxi highlighted these incidents as evidence of weak internal controls, with the board and audit committees failing to curb misuse of funds. The delayed disclosures impacted financing and credit access, creating an opportune moment for state-owned capital to acquire the company at a low valuation.
**Path to Revival** Bai proposed strategies for Nanfang Black Sesame Group to revitalize its brand: expanding product lines (e.g., ready-to-drink sesame beverages, snack bars), deepening sesame-based innovations (e.g., oils, protein powders), and streamlining distribution through partnerships with GTD Great Health's tourism and health networks. He stressed the need for financial restructuring, including cutting loss-making non-core businesses and reducing high-interest debt.
Post-state acquisition, governance reforms such as independent director majorities and employee stock options tied to performance targets could align interests and rejuvenate the decades-old brand. Digital marketing collaborations with health influencers and membership programs could also enhance engagement and sales.
The company's journey ahead requires decisive restructuring to transform its fortunes under new ownership.
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