Trading Halt! After ten years of being listed, Huayu Mining's controlling shareholder plans to transfer ownership for the first time. Why is the significant performance increase in 2025 unlikely to prevent the major shareholder's "exit"?

On April 2, after the market close, Huayu Mining Industry Co., Ltd. announced that on that day it received a notice from its controlling shareholder, Xizang Daoheng Investment Co., Ltd. (hereinafter referred to as “Daoheng Investment”). Daoheng Investment is currently planning to transfer the company’s shares via an agreement-based transfer. This matter may lead to a change in the company’s actual controller.

The announcement said that, given that the above matter is still under negotiation and there remains uncertainty, to ensure fair information disclosure, protect the interests of investors, and avoid causing abnormal fluctuations in the company’s share price, in accordance with relevant regulations and upon the company’s application, the company’s stock will be suspended from trading starting when the market opens on April 3 (Friday). The expected suspension period will not exceed 5 trading days.

It should be noted that this is the first time since Huayu Mining Industry went public in March 2016 that it has issued a suspension notice due to a planned change in control by a controlling shareholder.

**　　Huayu Mining Industry expects its 2025 attributable net profit to grow by over 200% year over year **

When a listed company’s controlling shareholder transfers control, the secondary market often associates it with poor operating 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 that its full-year 2025 attributable net profit will be as high as RMB 800 million to RMB 900 million, up 215.80% to 255.28% year over year. It also expects to achieve non-recurring profit and loss (after deducting the same) net profit of RMB 380 million to RMB 480 million, an increase of 50.44% to 90.02% year over year.

Regarding the reasons for the expected year-on-year increase in performance in 2025, Huayu Mining Industry stated that during the reporting period, domestic and international non-ferrous metals markets saw strong demand, with prices continuing to rise. Against this backdrop, the company fully benefited from the sustained strength in the precious metals and minor metals markets, driving a significant year-on-year increase in operating revenue.

A reporter from The Economic Daily News also noted that Huayu Mining Industry’s extremely high value for restructuring or acquisitions likely lies in the strategic mineral resources it holds, 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 “Talu Aluminum Industry,” the largest state-owned enterprise in Tajikistan. In its 2023 interim report, the company previously stated that after the “Talu Aluminum Industry” project reaches production capacity, its annual output of antimony concentrates could reach 16,000 metric tons of metal and 2.2 metric tons of gold ingots.

Public information shows that antimony plays an irreplaceable role in fields such as photovoltaic power generation, military industry, and flame retardants. It is a scarce metal listed by many countries worldwide in their strategic reserve catalogs.

According to Huayu Mining Industry’s 2025 interim report, the “Talu Aluminum Industry” project completed construction and began trial production in April 2022, and started formal production in July 2022. It has already reached an annual ore processing capacity of 1.5 million tons. The company also said that the construction and commissioning of the “Talu Aluminum Industry” project is an important step for the company’s overseas development, enhancing its overseas expansion capability.

**　　Daoheng Investment just released a pledge of 28 million shares this January; in the past, there have been cases of pledge default and disclosure violations related to “passive reduction of holdings” **

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

For example, as of the end of 2022, the Huayu Mining Industry shares pledged by Daoheng Investment at one point accounted for 53.44% of the company shares held by the former (8.69% of the company’s total share capital). Usually, high-percentage pledge by major shareholders is often to meet their own financing and liquidity needs.

What is noteworthy is that on January 28, 2026, Huayu Mining Industry announced that on January 27, 2026 Daoheng Investment had released the pledge of 28 million shares it had pledged to a natural person, Ye Danrong (22.44% of its holdings, and 3.41% of the company’s total share capital).

After this release of the pledge for 28 million shares, Daoheng Investment still has 20.566 million shares in a pledged status, accounting for 16.48% of its holdings and 2.51% of Huayu Mining Industry’s total share capital.

According to past announcements, Daoheng Investment also had instances of pledge default and violations related to “passive reduction of holdings.”

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 lasting three years (from March 2019 to March 2022). Among the frozen shares, 168 million shares had already gone through pledge registration.

Since August 2018, the performance security ratio of the shares pledged by Daoheng Investment to Haitong Asset Management has continued to stay below the warning line, constituting a material breach. In July 2019 and in subsequent periods, Haitong Asset Management and Haitong Securities, pursuant to the agreement, forcibly closed positions, causing Daoheng Investment to undergo “passive reduction of holdings” multiple times amounting to hundreds of millions of shares.

With respect to the above “passive reduction of holdings” events, since Daoheng Investment failed to disclose its reduction plan 15 trading days in advance as required, it constituted a violation of information disclosure regulations. The Shanghai Stock Exchange therefore issued several regulatory attention and public condemnation disciplinary decision letters to Daoheng Investment.

（Source: The Economic Daily News）