Xiwang Food discloses a potential change of control and defies the trend to hit its first daily limit-up this year, with investors buzzing about asset restructuring expectations.

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Daily Economic News Reporter | Wen Duo Daily Economic News Editor | Dong Xing Sheng

On March 18, Xiwang Food (SZ000639) opened slightly higher by 1 cent but quickly turned downward. By midday, the stock closed at 3.05 yuan per share, down 2.87%.

Just on the 16th, Monday, the stock experienced its first limit-up in 2026. According to news, Xiwang Food announced on the evening of March 13 that approximately 200 million shares held by its controlling shareholder, Xiwang Group, will be publicly auctioned on the JD Judicial Auction Platform from March 30 to 31, accounting for 99.01% of Xiwang Group’s holdings in the company and 18.53% of the total share capital.

If the auction is successful, Xiwang Group and its concerted parties’ combined holdings will drop to 1.87%, potentially changing the company’s control. On the first trading day after the announcement, Xiwang Food’s stock unexpectedly hit the daily limit-up, sparking discussions among investors about possible future restructuring.

According to the announcement, the approximately 200 million shares are being judicially auctioned due to a pledge dispute between controlling shareholder Xiwang Group and Binzhou Key Enterprise Development Fund Partnership (Limited Partnership). The financing began in August 2019 and was due in August 2022. The auction is conducted by the Jinan Intermediate People’s Court of Shandong Province, with the target being 200.065 million shares held by Xiwang Group, representing 99.01% of its holdings in the company and 18.53% of the total share capital.

Previously, Xiwang Group and its concerted parties held a total of 567 million shares, accounting for 52.51% of the company’s total share capital, but most of these have been judicially auctioned. If this auction completes, combined with previously auctioned shares, Xiwang Group will hold only 2.01 million shares, or 0.19% of the total. Xiwang Yonghua Investment Co., Ltd., a concerted party, holds 14.02 million shares (1.30%), and Wang Di directly owns 4.10 million shares (0.38%). Together, their holdings will decrease to 20.14 million shares, or 1.87%, possibly leading to a change in the company’s controlling shareholder and actual controller.

Xiwang Food emphasized in the announcement that the company is completely independent from its controlling shareholder in terms of personnel, assets, finances, organization, and operations, possessing independent assets, business, and management capabilities. The auction will not significantly impact the company’s production and operations. As of the announcement date, the company is operating normally, and the board and management will do their best to maintain normal operations and ensure orderly progress of all business activities.

Surprisingly, after the negative news of the controlling shareholder’s shares being judicially auctioned was released, Xiwang Food’s stock rose against the trend and hit the daily limit-up on March 16.

By the close, the stock was at 3.14 yuan per share. This contrast sparked widespread discussion among investors, with many focusing on potential changes in control and even speculating about the future new controlling shareholder.

Previously, Jiang Han, senior researcher at Pangu Think Tank, told the media that the stock’s limit-up was more about the market pricing in the “control change” event in advance rather than a fundamental improvement in the company’s performance. He believes that as the shares of the controlling shareholder are auctioned and other negative factors like continuous losses are gradually priced in, some investors interpret these as “bad news fully priced in.” Meanwhile, the market is also betting on the potential asset restructuring and business reorganization that could follow the entry of new investors, which has been a key driver of the stock’s movement.

A staff member from Xiwang Food previously told the media that there is a lot of market information currently, and the relevant situation should be based on official company announcements; stock price fluctuations in the secondary market are influenced by multiple factors, and the reason for the limit-up is “difficult to determine.”

From the trading data on March 16 and 17, the stock remained stable at 3.14 yuan per share, with two consecutive days of closing prices at that level. This indicates that after the brief abnormal movement, market sentiment has gradually returned to rationality, with investors mostly waiting for further clarity on the auction results.

This shareholding change occurs amid the company’s ongoing poor performance. According to the earnings forecast released on January 30, Xiwang Food expects a net loss attributable to shareholders of listed companies between 880 million and 1.32 billion yuan in 2025, compared to a loss of 444 million yuan in the same period last year; after deducting non-recurring gains and losses, the net profit is also expected to be a loss of 880 million to 1.3 billion yuan, compared to a loss of 433 million yuan last year.

The company explained that the reasons for the performance decline include rising raw material prices for whey protein and increasing competitive pressure, which caused the sports nutrition segment’s results to fall short of expectations. Additionally, the company has recognized intangible asset impairment losses of 950 million to 1.5 billion yuan according to accounting standards, further dragging down net profit.

Including 2025, Xiwang Food has been in continuous loss for four years. From 2022 to 2024, its net profits attributable to shareholders were -619 million, -16.87 million, and -444 million yuan respectively.

To address its performance difficulties, Xiwang Food stated in its earnings forecast that in 2026, management will implement extensive reforms, including optimizing product cost structures, expanding diversified product lines, increasing digital channel investments, and strengthening expense controls, to lay the foundation for future growth. However, given the potential change in control, whether these measures can be smoothly implemented remains uncertain.

Cover image source: Meiri Media Library