Suspension starting tomorrow! After ten years of listing, Huayu Mining's controlling shareholder is planning a change of ownership for the first time. Why is the 2025 performance expected to significantly increase, yet it still can't prevent the major shareholder from "exiting"?

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        Reporter: Cai Ding｜Editor: Huang Bowen          

After market close on April 2, Huayu Mining Industry (SH601020, share price 27.85 yuan, market cap 16k yuan) announced that on that day, the company received a notice from its controlling shareholder, Xizang Daoheng Investment Co., Ltd. (hereinafter referred to as “Daoheng Investment”). Daoheng Investment is currently planning a share agreement transfer for the company. This matter may lead to a change in the company’s controlling rights.

The announcement states that, given that the above matter is still under discussion and there is uncertainty, to ensure fair information disclosure, protect the interests of investors, and avoid abnormal fluctuations in the company’s stock price, in accordance with relevant regulations, upon the company’s application, the company’s shares will be suspended from the opening of trading on April 3 (Friday), with the expected suspension period not exceeding five trading days.

It should be noted that this is the first time since Huayu Mining Industry was listed in March 2016 that it has issued a suspension announcement due to its controlling shareholder’s planning of a change in controlling rights.

When controlling shareholders of listed companies transfer control rights, the secondary market often associates it with the listed company’s poor business performance. However, Huayu Mining Industry’s situation is exactly the opposite.

According to the 2025 performance forecast disclosed by the company on January 27, Huayu Mining Industry expects its 2025 full-year net profit attributable to the parent company to be as high as 800 million to 900 million yuan, representing an increase of 215.80% to 255.28%; it also expects to achieve non-recurring profit (net profit after deducting non-recurring gains and losses) of 380 million to 480 million yuan, representing a year-on-year increase of 50.44% to 90.02%.

Regarding the reasons for the expected increase in 2025 performance, Huayu Mining Industry said that during the reporting period, demand for nonferrous metal markets both at home and abroad was strong, with prices continuing to rise. Against this backdrop, the company fully benefited from the sustained strong performance of the precious metals and minor metals markets, driving a significant year-on-year increase in operating revenue.

A reporter from The Daily Economic News also noted that the core reason why Huayu Mining Industry has extremely high value for restructuring or acquisitions may be that it holds mineral resources of great strategic significance, especially the strategic minor metal—antimony—often referred to as “industrial MSG.”

In recent years, Huayu Mining Industry has actively deployed overseas assets. For example, it acquired 50% of the equity interest in “Taaluminum Industry,” the largest state-owned enterprise in Tajikistan. In the company’s 2023 interim report, it previously stated that after the “Taaluminum Industry” project reaches production capacity, the annual output of antimony concentrates could reach 16k metric tons of metal, and 2.2 metric tons of gold ingots.

Public information shows that antimony has irreplaceable roles in areas such as photovoltaics, military applications, and flame retardants. It is a scarce metal included in the strategic reserves directories by multiple countries worldwide.

According to Huayu Mining Industry’s 2025 interim report, the “Taaluminum Industry” project completed construction and entered trial production in April 2022, and officially commenced production in July 2022. It has now reached an annual ore processing capacity of 1.5 million tons. The company also said that the “Taaluminum Industry” project has been built and put into production, taking an important step for the company’s overseas development and enhancing the company’s capability for overseas expansion.

The reporter noted that Huayu Mining Industry’s controlling shareholder, Daoheng Investment, has long had a high proportion of equity pledge.

For example, as of the end of 2022, Daoheng Investment had pledged shares of Huayu Mining Industry amounting to 53.44% of the shares it held at one time (8.69% of the company’s total share capital). Typically, high-percentage pledges by major shareholders are often to meet their own financing and liquidity needs.

It is worth noting that on January 28, 2026, Huayu Mining Industry announced that Daoheng Investment had released the pledge of 28 million shares granted to the individual Ye Danrong on January 27, 2026 (22.44% of its holdings, 3.41% of the company’s total share capital).

After the release of the pledge of 28 million shares, Daoheng Investment still had 20.566 million shares under pledge, accounting for 16.48% of its holdings and 2.51% of Huayu Mining Industry’s total share capital.

Based on past announcements, Daoheng Investment has also previously had violations involving pledge defaults and “passive reductions.”

For example, in March 2019, Huayu Mining Industry announced that Daoheng Investment’s 171 million shares of the company (32.60% of the company’s then total share capital) were frozen, with a freeze period as long as three years (from March 2019 to March 2022). Among the frozen shares, 168 million shares had already been registered for pledge.

Since August 2018, the performance assurance ratio for the shares pledged by Daoheng Investment to Haitong Asset Management has been continuously below the warning line, constituting a substantive default. In July 2019 and the subsequent period, Haitong Asset Management and Haitong Securities, in accordance with the agreement, forcibly closed positions, leading to Daoheng Investment having “passive reductions” of several million shares multiple times.

In response to the above passive reduction events, because Daoheng Investment failed to disclose the reduction plan 15 trading days in advance as required, it constituted a violation of information disclosure regulations. As a result, the Shanghai Stock Exchange issued disciplinary decision letters to Daoheng Investment multiple times, including regulatory attention and public reprimands.

Cover image source: Media Material Database of The Daily Economic News

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