After five years of being listed, the company faces its first loss, major shareholders reduce their holdings, and Yuxin Shares' industrial transformation encounters obstacles.

Source: Securities Star

In its fifth year after listing, Yuxin Co., Ltd. (002986.SZ) has released its first loss-making performance forecast. Once a company that secured a place in the South China liquefied petroleum gas (LPG) deep-processing sector by leveraging a well-developed C4 full-component industrial-chain layout, it is now facing severe operational challenges. From pressure on the traditional oil-additives business brought on by the widespread adoption of new-energy vehicles, to cost surges caused by poor commissioning and ramp-up of newly started projects, and then to the combined impact of safety production incidents and asset impairment, under multiple pressures, the company expects a full-year 2025 loss of RMB 35 million to RMB 50 million.

The shadow over performance has not yet lifted, and selling-off actions by major shareholders have once again drawn market attention. On March 11, the company’s second-largest shareholder, Ni Yubei, disclosed a reduction plan, intending to cash out more than RMB 50 million. From the first loss after listing to the sale-off by major shareholders, the pressure on Yuxin’s transformation period is gradually becoming apparent, one by one.

1. Performance flips, facing the first loss after listing

In recent years, Yuxin Co., Ltd. has tried to break away from reliance on traditional oil-product businesses by extending its industrial chain and increasing product added value, and to pivot toward the chemicals sector. However, this transformation process is full of challenges, and the results have not yet fully emerged.

Judging from its industrial-chain layout, the company currently has C4 full-component processing capabilities. Its traditional products include MTBE, isooctane, and isobutyl acetate. After 2023, it added maleic anhydride products, and it extends downstream to the methyl ethyl ketone (MEK) industry chain using isobutyl acetate as the raw material. The company claims this layout has strong industrial-chain synergy effects, but in reality, due to bottlenecks in infrastructure and excess production capacity in the industry, the synergy effects have not been effectively released.

The pressure facing the transformation layout can be seen clearly in performance. The company’s 2025 performance forecast shows that the net profit attributable to shareholders is expected to be a loss of RMB 35 million to RMB 50 million, representing a year-on-year decline of 111.40% to 116.28%; after deducting non-recurring items, net profit is expected to be a loss of RMB 50 million to RMB 70 million, representing a year-on-year decline of 117.37% to 124.32%. Based on financial data, the company’s performance weakness had already emerged in the first three quarters of 2025. The third-quarter report shows the company achieved operating revenue of RMB 5.343 billion, down 6.12% year on year; net profit attributable to shareholders was a loss of RMB 64.0895 million, a sharp drop of 124.42% year on year. Among this, the loss in the third quarter alone reached RMB 85.8452 million, with a year-on-year decline of as much as 242.57%, indicating a deterioration trend quarter by quarter.

For the reasons behind the expected full-year loss, the company provided four explanations in its performance forecast: pressure on product prices and production capacity fluctuations are the direct causes of the loss. The market prices of the company’s core products—methyl tert-butyl ether (MTBE), maleic anhydride, isopropanol, and methyl ethyl ketone (MEK), among others—have remained sluggish. The price differential between products and raw materials has continued to narrow, directly eroding profit margins. Even more noteworthy is that isooctane units, which had previously been an important profit support for the company, were shut down due to policy and market reasons. The exit of this product line has led to significant compression of gross margin.

Cost pressure from ramp-up and commissioning of new projects further exacerbated the losses. It is understood that the company’s subsidiary, Boco New Materials, began in 2025 with parts of the first-phase of its light hydrocarbons integrated utilization project and the second-phase project, both entering the trial production stage in phases. As large-scale chemical facilities, during their first full-scale overall operation, they face many challenges. In addition, infrastructure such as long-distance pipeline corridors was not put into operation in sync. Interference from unfavorable external factors such as bad weather, among others, resulted in insufficient operational stability of the facilities, leading to a significant rise in material losses and costs for start-up/shutdown and operational switching.

In addition, the dual shocks of safety production incidents and scheduled maintenance further amplified operational pressure. During the reporting period, the company’s subsidiaries, Yuxin Chemical and Yuxin New Materials, carried out planned plant shutdowns and maintenance according to schedule. More seriously, during the reporting period, an electrocution accident occurred involving a maintenance unit of Yuxin Chemical during cable laying work, resulting in one death. The Office of the Municipal Safety Production Commission of Huizhou immediately imposed on-site supervision and investigation over the accident. After verification by regulatory authorities, Yuxin Chemical was found to have issues such as failing to take measures to eliminate a fire hazard on June 18 and that the layout of fire-protection electrical cables did not meet regulatory requirements, and thus bore responsibility for the occurrence of the accident. In January 2026, Yuxin Chemical therefore received an 《Administrative Penalty Decision》 issued by the Emergency Management Bureau of the Management Committee of the Daya Bay Economic and Technological Development Zone in Huizhou, corresponding to the two illegal acts. The penalty was decided based on discretion, combined, and a total fine of RMB 610,000 was imposed.

In addition, asset impairment provisions became another driver of performance losses. In recent years, Yuxin Co., Ltd. has stepped up efforts in the biodegradable materials sector and invested in and built a PBAT biodegradable plastic project. However, due to the combined effects of industry policies and market demand, the biodegradable materials market is currently in a downturn. The production facilities for this project have not been put into actual production, so economic benefits have not been released as scheduled. In accordance with accounting prudence principles, the company has provided impairment allowances for relevant assets, further eroding current-period profit.

2. Major shareholders sell off and cash out

Under the shadow of poor performance, Yuxin Co., Ltd.’s shareholders’ sell-off actions are especially eye-catching.

On March 11, Yuxin Co., Ltd. issued an announcement stating that shareholder Ni Yubei plans to reduce its holdings of the company’s shares in an aggregate amount of no more than 3.748 million shares through centralized competitive bidding, not exceeding 1% of the company’s total share capital after excluding shares held in the repurchase-specific account. Roughly calculated based on the closing price of RMB 14.84 per share on March 24, the share reduction may cash out about RMB 55.62 million.

It is known that as of the end of the third quarter of 2025, Ni Yubei is currently the company’s second-largest shareholder, holding 13.6342 million shares, representing 3.59% of the company’s total share capital. Ni’s spouse, Zhang Linfeng, holds 6.5052 million shares, representing 1.71% of the total share capital. Zhang Linfeng’s persons acting in concert, Zhuhai Abama Private Fund Investment Management Co., Ltd., holds 5.8428 million shares related products, representing 1.54% of the total share capital. The combined shareholding ratio of the three parties reaches 6.84%.

In the secondary market, since the beginning of this year, Yuxin Co., Ltd. has fluctuated and risen from the opening price of RMB 10.79 on January 4 to RMB 18.22 on March 9, reaching a new high since October 2023, with a cumulative increase of 68.86%. Starting March 10, the company’s share price began to correct. As of the close on March 24, the year-to-date gain was still close to 40%.

Regarding the reasons for this reduction, the announcement only stated simply “personal capital needs” and did not disclose the specific use. The source of the shares is shares held prior to the company’s initial public offering. The reduction window period is from April 1, 2026 to June 30.

From the company’s first loss after listing to the sell-off by major shareholders, Yuxin Co., Ltd. is at a critical juncture in its transformation. The traditional business is constrained by shrinking demand; new projects are still in the ramp-up and commissioning stage; and the strategic layout has not yet produced results. Under the combined effect of multiple pressures, the company’s operational challenges have already become evident. For Yuxin Co., Ltd., whether it can straighten out the operation of new projects in the future, restore its profitability level, and address market doubts may become key to getting out of its operating difficulties. (This article was first published by Securities Star. Author: Xia Fenglin)

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