Sunshine Group's IPO attempt stalls for over two and a half years

Source: Beijing Business Daily

Since its founding in 1998, Shanxi Yangguang Coking Coal Chemical Group Co., Ltd. (hereinafter “Yangguang Group”) has gone through nearly 30 years under the leadership of Xue Dianmin. Today, it has become a coking coal giant enterprise. However, the company’s process of pursuing the capital market has not gone smoothly. Since entering the inquiry stage in June 2023, Yangguang Group’s main-board IPO has been in the queue for more than two and a half years, yet it has still not been able to step into the review meeting “examination room” of the Listing Committee. Behind the “stalled” IPO is the fact that the group’s net profits for 2022–2024 have declined one after another. However, in the first three quarters of 2025, the net profit scale has rebounded somewhat. Regarding control, before this offering, Yangguang Group was jointly controlled by the actual controller Xue Dianmin and his son Xue Guofei, holding more than 80% of the shares in total.

Net profit rebounds in the first three quarters of 2025

Yangguang Group, which entered the inquiry stage as early as June 2023, has not been able to wait for an opportunity to appear before the meeting since then.

It is understood that Yangguang Group’s main businesses are the production and sales of coal-chemical products and fine chemical products. The company received acceptance for its IPO on February 27, 2023, and entered the inquiry stage on June 8 of the same year.

From the fundamentals perspective, in 2022–2024, Yangguang Group’s net profit declined sharply one after another. Financial data shows that from 2021 to 2024, the company’s revenue was approximately RMB 15.992 billion, RMB 20.438 billion, RMB 18.194 billion, and RMB 15.83 billion, respectively; net profit attributable to shareholders was approximately RMB 2.136 billion, RMB 1.175 billion, RMB 674 million, and RMB 379 million, respectively. In the first three quarters of 2025, Yangguang Group’s revenue was approximately RMB 9.076 billion, compared with RMB 11.83 billion in the same period last year; net profit attributable to shareholders was approximately RMB 282 million, which increased from RMB 223 million in the same period last year.

In terms of R&D expenses, in 2022–2024 and the first half of 2025, Yangguang Group’s R&D expenses were RMB 45.2232 million, RMB 57.6028 million, RMB 45.4903 million, and RMB 20.319 million, respectively, accounting for 0.22%, 0.32%, 0.29%, and 0.34% of revenue for the respective periods. In addition, it is worth noting that as of the end of the first half of 2025, among Yangguang Group’s R&D personnel, the proportion of employees with junior college education or below was close to 80%.

The prospectus shows that by the end of June 2025, Yangguang Group’s R&D personnel increased from 96 people at the end of 2024 to 127 people. Among them, the number of master’s degree graduates and above dropped from 1 person to 0; the number of bachelor’s degree holders decreased from 38 to 28; and the number of junior college education or below increased to 99, with its proportion rising from 59.38% to 77.95%.

“Given the characteristics of the educational attainment distribution of R&D personnel in the coking industry, the situation where those with junior college education or below account for nearly 80% has clear industry-wide commonality.” Yuan Shuai, deputy secretary-general of the Zhongguancun Internet of Things Industry Alliance, told a reporter from Beijing Business Daily. However, maintaining an extremely low proportion of high-end talent for the long term may indicate the company’s weakness in original innovation and the reserves of disruptive technologies. As the industry evolves toward greener and smarter development, the core driving force behind R&D has shifted to molecular-level materials design, green process development, and complex systems integration. These fields have hard requirements for theoretical reserves from high-education talent.

Actual controller holds more than 80% of the shares

In terms of shareholding relationships, Yangguang Group’s controlling shareholders and actual controller are Xue Dianmin and his son Xue Guofei. Xue Dianmin holds 81.28% of the shares and serves as chairman; Xue Guofei holds 0.6% of the shares and serves as director and general manager. Xue Dianmin and Xue Guofei jointly control 81.88% of the shares of the company before this offering.

In this bid to list, Yangguang Group plans to raise about RMB 4 billion, which will be invested in a 3.69-million-ton-per-year coking project with 6.78-meter-high coke ovens’ coking chambers; a project for producing liquefied natural gas and synthetic ammonia from coke oven gas; a coal preparation system and coking coal storage and transportation system renovation project; and a 220kV transmission and transformation engineering project. It is worth noting that according to the initial prospectus version disclosed by Yangguang Group in February 2023, the amount originally planned to be raised in this IPO was RMB 6 billion. However, in the prospectus disclosed in December 2024, the company reduced the planned amount to RMB 4 billion currently.

As an established coking coal enterprise, Yangguang Group’s violations and rectification regarding safe production have also become a key focus of market attention. The prospectus shows that from January 1, 2022 to the date the prospectus was signed, the company and its subsidiaries had received four administrative penalties related to safe production, and had experienced four general production safety accidents leading to deaths of personnel.

Regarding the above issues, a reporter from Beijing Business Daily sent an interview request letter to Yangguang Group for an interview. However, as of the time the reporter’s稿 was published, the company had not responded.

Beijing Business Daily reporter Wang Manlei