Behind Lehui International's 350 Million Yuan Fixed Increase: Previous Fund-Raising Project Usage Change Ratio Reaches as High as 98% - "Second Growth Curve" Becomes a Profit Drag

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Produced by: Sina Finance Listed Company Research Institute

Author: IPO Refinance Team / Turing

Recently, Le Hui International announced a private placement plan, aiming to raise no more than 350 million yuan to supplement working capital and repay bank loans.

Investors should note that in 2021, Le Hui International raised 418 million yuan through a private placement, but has not fully used the funds yet. The company frequently changes the use of raised funds (with a change rate as high as 98%), and several projects after the changes have been delayed twice, with the longest delay reaching three years. Some completed projects have had negative benefits for multiple years. The “piecemeal” termination of projects has led some investors to question whether the company is just “raising money”; meanwhile, repeated delays in projects raise concerns about the efficiency of the invested funds.

Behind the frequent changes and delays of previous fundraising projects is Le Hui International’s strategic obstacle in finding a “second growth curve,” with its “Fresh Beer 30 km” business becoming a profit “drag.” Further analysis suggests that the company’s strategy to enter the “Fresh Beer 30 km” market warrants reflection. Over the past decade, beer production peaked in 2013 and has since been gradually declining, remaining in a slight downward trend without a new significant growth cycle.

The proportion of changes in the use of previous fundraising projects reached 98%

Initially, Le Hui International’s main business was brewing equipment for beer and beverages, later expanding into equipment for spirits, dairy machinery, whiskey, and other sectors. In 2020, the company began to focus on the “Fresh Beer 30 km” business, crossing over from equipment to consumer products, seeking a “second growth curve.”

The private placement plan shows that Le Hui International intends to issue no more than 36,210,403 shares to its controlling shareholders Lai Yunlai and Huang Yuening-controlled Ningbo Leying Enterprise Management Partnership (Limited Partnership), raising no more than 350 million yuan. After deducting related issuance costs, the net proceeds will be used entirely to supplement working capital and repay bank loans.

The company states that the purpose of this private placement includes: 1. supplement operating funds and improve financial strength; 2. optimize the asset-liability structure and enhance capital strength.

However, it is noteworthy that 109 million yuan of the previous fundraising projects remain unused, and the use of funds has been frequently changed, with a change rate of 98%, almost overturning the original plan.

In February 2021, Le Hui International raised 418 million yuan through a private placement, investing in projects such as the “Daily Craft Beer (Beer Workshop)” and “Fresh Beer Vending Machine Operations.” At that time, the capital market was optimistic about Le Hui International’s transformation—shifting from brewing equipment to consumer goods, aligning with consumption upgrades and the rise of craft beer, fitting the market environment.

The “Daily Craft Beer (Beer Workshop)” project was planned to invest 246.19 million yuan but was terminated after only 9.62 million yuan was invested; the “Fresh Beer Vending Machine” project planned to invest 158 million yuan but was terminated after only 3.5 million yuan.

It is noteworthy that the termination of these two projects was achieved through changing the project entities and reducing the fundraising amount, taking nearly two and a half years. This “piecemeal” approach has led some investors to question the legitimacy of the 2021 private placement.

Shortly after the fundraising in March 2021, Le Hui International changed the project entities from Ningbo Craft Beer Valley Technology Co., Ltd. to Ningbo Le Hui International Engineering Equipment Co., Ltd.

In March 2022, the company reduced the “Daily Craft Beer (Beer Workshop)” fundraising amount from 260 million yuan to 180 million yuan, a decrease of 80 million yuan.

In October 2022, the company terminated the “Daily Craft Beer (Beer Workshop)” project; in August 2023, it terminated the “Fresh Beer Vending Machine” project.

Indeed, the termination of these two projects did not directly add to working capital but was used to support the “Fresh Beer 30 km” business, including projects in Changsha, Wuhan, Kunming, and Changchun, with planned investments of 80 million, 163.1356 million, 104.4553 million, and 50.0447 million yuan respectively.

Source: Announcement

Roughly calculating, the total funds raised from the purpose changes in the previous private placement amount to 397.6356 million yuan, with the cumulative proportion of purpose changes reaching 98.38% of the total raised funds.

Multiple delays and negative benefits of completed projects after the purpose change

Investors should note that some of the projects after the purpose change in Le Hui International’s previous private placement still experienced multiple delays, raising doubts about the efficiency of the invested funds.

For example, the “Kunming Fresh Beer 30 km Urban Brewery” project’s expected operational date was extended from August 2024 to April 2025, then further to April 2027. Similarly, the “Changchun Fresh Beer 30 km Urban Brewery” project’s expected operational date was extended from April 2024 to April 2025, then again to April 2027. The “Wuhan Fresh Beer 30 km Urban Factory” (Phase II) was extended from March 2025 to April 2027. The longest delays were for the Changchun project, totaling up to three years.

The reasons given by Le Hui International for these delays include: impacts from objective factors such as market environment shocks, domestic economic restructuring, and macroeconomic downward pressure, leading to slower construction progress and inability to reach the planned operational date; and the underperformance of “Fresh Beer 30 km” craft beer sales, prompting the company to prioritize utilization of existing capacity and slow down new city brewery projects.

According to the company’s explanation, the first delay was mainly due to objective factors, and the second delay was due to lower-than-expected craft beer sales. Currently, several “Fresh Beer 30 km” projects have not yet achieved positive benefits.

Source: Announcement

As of February 25, 2026, the completed “Fresh Beer 30 km Changsha City Factory” has accumulated benefits of 1.1459 million yuan, -9.2221 million yuan, and -3.9655 million yuan in 2023-2025, with a total loss of 24.5935 million yuan over three years. The “Wuhan City Factory” (Phase I) had benefits of -9.1926 million yuan and -10.3968 million yuan in 2024 and 2025, respectively, with a total loss of 19.5894 million yuan.

“Second growth curve” becomes a profit “drag”

The frequent changes and delays in previous projects reflect Le Hui International’s strategic difficulties in finding a “second growth curve,” with the “Fresh Beer 30 km” business gradually becoming a profit burden.

Public data shows that from 2022 to 2024 and the first three quarters of 2025, Le Hui International’s “Fresh Beer 30 km” business losses were 45.5356 million yuan, 60.6506 million yuan, 75.2788 million yuan, and 11.6979 million yuan, respectively.

During the same periods, the company’s net profit attributable to shareholders was 22 million yuan, 20 million yuan, 21 million yuan, and 34 million yuan, with year-on-year changes of -52.66%, -10.07%, +7.16%, and -17.1%.

The sharp decline in net profit in 2022 and 2023 is closely related to the huge losses from the “Fresh Beer 30 km” business. Although losses narrowed in the first three quarters of 2025, whether the business can turn profitable and sustain profitability remains uncertain.

Over the five years since the funds from the previous private placement were received, Le Hui International has not only terminated previous projects but also seen new delays in purpose changes, with some completed projects showing negative benefits. Should the company reconsider the rationality of this private placement? More fundamentally, is “Fresh Beer 30 km” a failed strategy?

Source: First Venture Capital Research Report

In the beer industry, production volume above designated size peaked in 2013 and has been declining since. According to First Venture Capital, in 2024, the national large-scale beer production is estimated at about 35.21 million kiloliters, a slight decrease of 0.6% year-on-year. The overall trend remains in a slight decline since 2015, with no sign of a new volume surge. While high-endization has significantly increased per-ton prices and retail prices, macroeconomic weakness and slower-than-expected recovery in catering scenes mean that this structural shift is more about offsetting weak volume rather than driving a new high-growth cycle in the industry.