Haite Group's related mergers and acquisitions face a "four-year tug-of-war": the plan keeps changing, and the valuation of the transaction target has shrunk by 60%.

Securities Times reporter Fan Luyuan

As of this March, each month the Haigui Group has issued a “familiar ‘recipe’” progress announcement on the reorganization it has been stuck on for one and a half years: the major asset restructuring is still underway, but there are certain obstacles in moving the deal forward, and whether it can ultimately be implemented and completed remains subject to major uncertainty.

Since the first official announcement in May 2022 of an acquisition of assets from related parties, over nearly four years, Haigui Group’s restructuring plan has undergone three major revisions; the appraisal value of the target assets has been cut in half, key terms have been steadily weakened step by step, the payment method has undergone major changes and lost its stability, yet the restructuring timeline for landing the deal has never shown up.

With regulators continuing to increase enforcement against “hype-driven restructurings,” can this restructuring drama—gradually stuck in a stalemate—break through smoothly?

The “tug-of-war” for the restructuring begins

Haigui Group’s main businesses are automobile passenger transport, the operation of passenger stations, and comprehensive automobile services. It was listed on the Shanghai Stock Exchange in July 2016. In recent years, the rapid rollout of high-speed rail networks nationwide and a sharp increase in private car ownership have led to a decline in demand for intercity and mid- to long-distance passenger line transport, and the company’s core business has been hit hard; since listing, its highest level of operating revenue was locked in at 2018.

From 2020 to 2024, Haigui Group’s non-recurring profit continued to be negative for five consecutive years. The latest performance forecast shows that in 2025 the company’s net profit is expected to be a loss of RMB 40 million to RMB 80 million, and its non-recurring profit is expected to be a loss of RMB 48 million to RMB 96 million. At the same time, its asset-liability ratio has been rising year after year, reaching 69.17% in the third quarter of 2025.

Faced with the continued deterioration of its core business, Haigui Group turned its attention to duty-free business. In 2020, the Hainan Free Trade Port construction plan was issued, and the duty-free concept quickly became one of the hottest themes in the capital markets. That same year, Haigui Group’s de facto controller, the Hainan Provincial State-owned Assets Supervision and Administration Commission, changed the contribution of the Haigui Holdings equity it held to Hainan Lvyoutou. Hainan Lvyoutou, which holds a duty-free license, thereby became the company’s indirect controlling shareholder. The current indirect shareholding ratio is 42.5%.

The dual expectations of “duty-free + restructuring” quickly ignited the company’s stock price. In August 2020, Haigui Group’s stock price surged to a historical high of RMB 68.22 per share. Within two months, the stock rose by more than 500%.

In May 2022, Haigui Group officially suspended trading to plan a major asset restructuring. It intended to purchase 100% of the Hailing Duty Free business equity held by the indirect controlling shareholder Hainan Lvyoutou, by issuing shares and paying cash, with a deal value of RMB 5.002 billion, and simultaneously raise supporting funds of no more than RMB 1.8 billion.

Deal-related positives again pushed up the stock price. With the boost from the duty-free concept, after resuming trading, Haigui Group hit 11 consecutive daily limit-up boards. In just one month, the share price skyrocketed from RMB 12.02 per share to a peak of RMB 45.78 per share, an increase of 280%.

But after the stock-price celebration, Haigui Group’s restructuring plan fell into a long period of tug-of-war.

The plan was modified multiple times, and the valuation shrank

From the first announcement to acquire Hailing Duty Free until today, Haigui Group’s restructuring process has lasted nearly four years. During that time, the restructuring plan has been modified multiple times, halted several times, and after multiple rounds of regulatory inquiries, the outlook still remains full of uncertainty.

In April 2023, Haigui Group made its first adjustment to the transaction plan. The deal value was lowered from RMB 5.002 billion to RMB 4.08 billion, the supporting fundraising amount was reduced from no more than RMB 1.8 billion to RMB 1.4 billion; then the restructuring was terminated because the financial data had expired.

In March 2024, Haigui Group restarted its restructuring plan and issued an announcement on major adjustments to the restructuring plan: the deal value was further cut to RMB 2.037 billion, nearly 60% lower than the initial valuation; the scale of supporting financing was compressed to RMB 738 million, and the performance commitment was significantly reduced. Regarding the adjustment to this plan, Haigui Group stated that the main reason was that the target company’s performance fell short of expectations.

However, only half a year later, in September 2024, Haigui Group again made a major adjustment to its restructuring plan. The original plan of “purchasing 100% of Hailing Duty Free equity by issuing shares and paying cash” was changed to “acquiring control rights of Hailing Duty Free after the separation of the Huatian project, by paying cash and/or assets.” The new plan canceled the arrangement for issuing shares and supporting financing, blurred the equity acquisition ratio, and also did not mention key terms such as performance commitments.

After that, Haigui Group continued to issue monthly routine announcements on restructuring progress, but there was never any substantive progress. The company’s latest announcement shows that “due to factors including intense competition in the domestic duty-free market and a slowdown in consumer demand, it is expected that the target company’s performance after excluding the Huatian project in 2025 may experience a significant decline; there are certain obstacles for the company to推进 this restructuring, and whether it can ultimately be implemented and completed involves major uncertainty.”

From “acquiring with issued shares + cash + supporting fundraising” to “acquiring with cash/assets,” the acquisition plan was greatly simplified, which also tested the listed company’s ability to make payments. The Q3 2025 report shows that Haigui Group’s cash on hand is RMB 281 million, and compared with the valuation in the final announcement of Hailing Duty Free, the funding gap exceeds RMB 1.7 billion. On the other hand, the company has interest-bearing liabilities of more than RMB 1 billion, and the high asset-liability ratio further intensifies financing pressure.

“Based on the current situation, if using the simplified procedure for M&A restructuring, it can be completed within the fastest three months; if using the ordinary procedure, the average time is 6–12 months. For an M&A restructuring leading to a listed-company transaction, the average time required is 12–18 months. For particularly complex cases, the M&A cycle may exceed two years.” Wang Jie, a senior partner at Dentons Law Firm, told Securities Times reporters. Haigui Group’s restructuring time has already exceeded this range.

The landing of the restructuring is fraught with difficulties

Liu Zigeng, a researcher at the Su-Gang Management Accounting and Audit Research Institute, said that when the cycle for related M&A is too long, there are usually four main reasons: first, the target’s performance is not up to expectations; second, the game between valuation and performance commitments falls into a stalemate; third, regulatory review is becoming stricter; and fourth, coordinating the interests among transaction parties is difficult.

Earlier, regulators conducted multiple rounds of inquiries into Haigui Group’s restructuring plan, with core focus on key issues such as an excessively high valuation, the sources of funds, and performance commitments. The actual performance of the target’s assets is seriously out of sync with expectations, and the market has even questioned whether the valuation contains a large amount of “bubble.”

In the initial M&A plan in 2022, Hailing Duty Free’s valuation for 100% equity was RMB 5.002 billion, with an appreciation rate of more than 13 times. The plan also promised that the target company’s net profits in 2022, 2023, and 2024 would not be less than RMB 116 million, RMB 358 million, and RMB 538 million, respectively. However, in 2021, Hailing Duty Free’s attributable net profit was -RMB 24.469 million, meaning it was not yet profitable.

The high valuation of Hailing Duty Free was built on the listed company’s optimistic expectations that its performance would grow. About 80% of Hailing Duty Free’s revenue comes from off-island duty-free business. The Hailing Duty Free City, established in December 2020, is its core business carrier. The listed company initially predicted that the annual growth rate of Hailing Duty Free’s duty-free business revenue in 2022 and 2023 would both exceed 50%.

But in reality, starting in 2022, after two years of explosive growth, Hainan’s off-island duty-free sales figures underwent a major adjustment. Combined with increasingly fierce market competition, Hailing Duty Free’s performance fell far short of expectations. In 2022 and 2023, its attributable net profits were only RMB 61 million and RMB 139 million, respectively—accounting for only 52.58% and 38.83% of the performance commitment targets. According to information disclosed by the company, the target company’s performance would further significantly decline in 2024 and 2025.

On the corporate governance side, since the restructuring was launched, Haigui Group’s core management team has changed frequently. In January 2024, the former chairman, Liu Hairong, resigned due to a job transfer. In June 2025, the successor chairman, Feng Xianyang, resigned. Ren Xienen took over as chairman. In November 2025, the general manager, Ma Chao, resigned and no longer held any position at the company; currently, the general manager post is temporarily held by Fu Renen. Frequent turmoil at the top inevitably affects the continuity of restructuring decision-making.

“In the process of acquiring Hailing Duty Free, Haigui Group made major adjustments to the restructuring plan multiple times. This reflects that the core foundation of the transaction has been shaken. It is a passive compromise by the listed company under weak target performance, an industry downturn, and regulatory pressure, rather than an active optimization of the plan. Fundamentally, it is a shift from ‘strategic upgrading’ to ‘limiting losses to survive.’” Liu Zigeng analyzed.

For issues such as obstacles to pushing the restructuring forward, the basis for plan adjustments, and funding gaps, the reporter sought an interview with Haigui Group. As of the time of this publication, there was no response.

The risk of an “M&A deal failing to close” needs to be watched closely

After the implementation of the “six M&A rules,” the A-share restructuring review process has continued to be optimized, and M&A efficiency among listed companies has improved significantly. According to the reporter’s statistics, since 2025, among major asset restructurings initiated by listed companies as the bidders, from first disclosure to deal completion, the average time used was 334 days. The shortest time was less than two months, and the longest was about two years.

By contrast, the phenomenon of Haigui Group’s restructuring process being dragged on without resolution and its core plan being modified multiple times is far from a normal situation, though it is not unique. Companies with excessively long restructuring cycles often share characteristics such as weak performance in their core business and high levels of speculative sentiment, and most ultimately end in failed restructurings.

For example, Zhongyida launched a RMB 10 billion acquisition in May 2021, aiming to obtain 100% equity of Wengfu Group. After the restructuring plan went through multiple rounds of regulatory inquiries, nearly three years later, in February 2024, it was terminated.

Liu Zigeng believes that the negative impact of an overly long restructuring cycle on listed companies mainly shows up in five aspects: first, the listed company misses the window for transformation, resulting in its core business not recovering and no new business taking shape; second, investors’ expectations are repeatedly dashed, leading to long-term stock price pressure and severely weakening its financing ability; third, the fairness of the transaction is questioned. Large modifications and retreats in the transaction’s core terms can easily trigger market speculation about whether asset pricing is fair and whether there is any transfer of benefits; fourth, inefficient communication with regulators exposes the company’s weakness in governance capability; and fifth, the target assets keep losing value, eventually possibly turning into “negative assets” injected into the listed company, which in turn increases the listed company’s financial burden and exposes it to “catching-the-fall” risk.

Wang Jie said that while multiple major adjustments to a restructuring plan are not entirely negative, an excessively high frequency and excessively large magnitude usually means there was insufficient justification at the outset, intense bargaining, or a tilt of interests. In his view, frequent adjustments essentially lengthen the cycle, magnify uncertainty, and weaken market trust, ultimately significantly increasing the rate of restructuring failure and compliance risks, and causing long-term damage to listed-company value and the interests of small and medium shareholders. “Regulators and the market should focus on distinguishing whether these are compliance-related corrections or arbitrary adjustments—whether they are meant to protect the listed company, or to grant benefits to specific parties.”

“To judge whether the plan is a true adjustment or an ‘hype-driven restructuring,’ you need to see whether the direction of plan changes is converging or diverging. In genuine restructuring modifications, the scope of the target typically shrinks, pricing becomes more reasonable, and compliance defects are fixed; ultimately, the plan converges. In an ‘hype-driven restructuring,’ the more the plan is changed, the messier it gets—the target may be bigger one time and smaller another, valuation jumps back and forth, performance commitments appear sometimes and disappear other times, and the transaction structure is frequently overturned. Each announcement says there is a ‘major adjustment,’ but it never resolves the key issues.” Wang Jie said.

A massive amount of information and precise analysis—everything is in the Sina Finance app