Bubugao’s acquisition record (Part 2): All shares of the controlling shareholder are fully unfrozen, and Liyuan Shares still face a risk of delisting

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“Bubugao” Merger Record Part 2

Just passed weekend, Liyuan Shares’ (002501.SZ) investors received good news.

On March 28, 2026, the company issued an announcement stating that all shares held by the controlling shareholder Biyou Intelligent Technology (Changchun) Co., Ltd. (hereinafter referred to as “Biyou Intelligent”) have been completely unfrozen. Affected by this news, Liyuan Shares successfully capped its stock price limit on Monday, closing at 2.04 yuan per share.

This means that since February 2025, when Jiangsu Bubugao Real Estate Co., Ltd. (hereinafter referred to as “Jiangsu Bubugao”) took over, the long-sought way out of the debt chaos for Liyuan Shares has finally shown tangible progress. Of course, the company’s delisting risk has not been fully eliminated, and there remains the risk of being “adorned with a *ST hat.”

Affected by the news that the shares held by the controlling shareholder were unfrozen, Liyuan Shares’ stock price hit the daily limit on Monday.

Financial fraud has fallen into difficulties, 7 years of massive losses of 180 billion yuan**

Liyuan Shares’ main business is the production and deep processing of aluminum profiles, whose products can be widely applied in many fields such as automotive parts, building materials, aerospace petrochemicals, rail transit, and more.

The company was successfully listed in November 2010, and its development was steady for a time. From 2010 to 2014, its operating revenue rose from 1.026 billion yuan to 1.932 billion yuan, nearing a doubling; its net profit after non-recurring items also grew from 0.9 billion yuan to 3.87 billion yuan, showing clear growth.

However, according to a “Disciplinary Announcement” issued by the Shenzhen Stock Exchange on January 12, 2023, it was revealed that as early as 2015, Liyuan Shares had already embarked on a four-year-long path of financial fraud.

From 2015 to 2017, Liyuan Refining (that is, “Liyuan Shares”) and its wholly owned subsidiary Shenyang Liyuan Rail Transit Equipment Co., Ltd. artificially fabricated sales transactions and sales receipts, cumulatively inflating revenue by 1.928 billion yuan; from 2015 to 2018, the company also cumulatively inflated the quantity of projects under construction, thereby inflating 6.283 billion yuan of projects under construction.

Taken as a whole, over the four years, Liyuan Shares inflated profits in total by 790 million yuan through inflating operating revenue and inflating fixed-asset depreciation, and also made false records of the corresponding balances of monetary funds.

As a result, more than a dozen directors and supervisors and senior management officials, including the company’s then-current director, board secretary, financial director Zhang Yingying, and the then-current director, deputy general manager, deputy chairman, and chairman Wang Jianxin, were subject to penalties.

As the “gap” created by the financial fraud kept growing, in 2018 Liyuan Shares no longer had the ability to keep covering up its performance, and it finally blew up. In 2018 and 2019, the company’s net profit after non-recurring gains and losses suffered massive losses of 38.75 billion yuan and 113.7 billion yuan respectively; from 2018 to 2024, the total amount of losses reached 179.12 billion yuan. In addition, according to the “Performance Forecast,” in 2025 the company is expected to continue to incur losses of 1.2 billion yuan to 2 billion yuan.

Meanwhile, the two former actual controllers of Liyuan Shares were dragged into a debt quagmire one after another. Starting in July 2018, shares of the listed company held by the founder and former actual controller Wang Min were placed under review and freezing. After debt restructuring, in 2021, the company’s controlling shareholder was changed to Biyou Intelligent, with a shareholding ratio of 22.54%. As of the end of 2024, Biyou Intelligent’s book total assets were 669 million yuan, total liabilities were 859 million yuan, and net assets were -1.9 billion yuan. Moreover, according to relevant judgment documents, Biyou Intelligent is also required to assume joint surety responsibility for 1.003 billion yuan of the loan principal.

During this period, on April 14, 2019, Mr. Wang Min died of illness without effective treatment.

“Bubugao takes over for a year, Biyou Intelligent’s shares finally fully unfrozen”

At the beginning of 2025, Liyuan Shares, trapped in the quagmire, finally welcomed its “white knight”—Jiangsu Bubugao.

Last February 2, the company announced that three individual shareholders of Biyou Intelligent—Wu Rui, Chen Yang, and Liu Jiang—had signed an agreement with Jiangsu Bubugao to transfer all shares of Biyou Intelligent to Jiangsu Bubugao for 0.38 billion yuan. After the transaction, Zhang Yuan of Jiangsu Bubugao became the new actual controller of Liyuan Shares. According to the agreement, Jiangsu Bubugao would also assume the rights and obligations of shareholders corresponding to the assets and liabilities under Biyou Intelligent as of the end of 2024.

In other words, while Jiangsu Bubugao obtained equity at a low price, it also took over the high amount of corresponding debts of Biyou Intelligent. It is worth noting that at the end of 2025, Zhang Yuan, through another company under his control—Suzhou Bubugao Investment Development Co., Ltd.—entered ST Zhongzhu (600568.SH) by using the same approach. As analyzed in the Nandu article titled “Bubugao and Meihua Venture Capital Wu Shichun enter the market one after another, and ST Zhongzhu’s ‘board of directors and executives’ undergo intensive reshuffling,” the equity issues of ST Zhongzhu’s major shareholder are even more complicated, but the company’s performance has been much steadier and shows signs of warming up.

Zhang Yuan is regarded as one of Duan Yongping’s disciples. Duan Yongping’s brother, Duan Liping, also participated with Zhang Yuan in multiple investments. For example, at the end of 2024, Zhang Yuan successfully took control of Daqian Ecology and served as chairman. At the end of 2025, Zhang Yuan resigned, and Duan Liping took over. Therefore, after the announcement of the change in ownership was released, Liyuan Shares hit the daily limit for four consecutive trading days.

But it was not until one year later that progress emerged in matters related to the equity.

（The image above is taken from a related announcement of Liyuan Shares）

Last week, Liyuan Shares released an announcement stating that on March 25, 2026, 33.31% of the company’s shares held by Biyou Intelligent (accounting for 7.51% of the company’s total shares) successfully had their freeze lifted; shortly after, as described in the beginning, all the remaining frozen shares of Biyou Intelligent were also successfully unfrozen.

Financial support to keep operations going, but still facing delisting risk

With the shares unfrozen, the remaining issues for Liyuan Shares will be concentrated in the operating side.

The “Performance Forecast” shows that in 2025, Liyuan Shares is expected to have operating revenue of only 230 million yuan to 290 million yuan. And according to Article 9.3.1, paragraph 1, item (1) of the Shenzhen Stock Exchange’s Stock Listing Rules, if a listed company has “the lowest of the three—total profit, net profit, and net profit after deducting non-recurring gains and losses—being negative for the most recent audited fiscal year, and the operating revenue after deducting non-recurring gains and losses is below 300 million yuan,” the Shenzhen Stock Exchange will implement a delisting risk warning for its stock trading (with “*ST” prefixed to the stock abbreviation, and the daily limit on stock price fluctuations capped at 5%).

Liyuan Shares’ financial pressure is not limited to revenue decline and profit losses.

（The image above is taken from Liyuan Shares’ “Announcement on Part of Debt Maturity”）

As of December 22, 2025, the company’s cumulative overdue unpaid debt principal was 89 million yuan, accounting for about 25.43% of the audited net assets for 2024. In fact, as of the end of the third quarter of 2025, Liyuan Shares’ net assets were 278 million yuan, down another 88 million yuan compared with the end of 2024. On January 31, 2026, China Construction Investment Leasing Co., Ltd. had already sued Liyuan Shares, requiring it to pay the corresponding overdue amounts and interest.

A reporter from Nandu noted that over the past year, Jiangsu Bubugao has provided financial support to Liyuan Shares multiple times, including a 100 million yuan interest-free loan and a 50 million yuan interest-bearing loan.

However, to truly bring the company’s business back on track and achieve a genuine bottoming-out rebound in performance, perhaps even a bigger opportunity is still needed.

Written by: Nandu N Video reporter Miao Lingyun