Beijing Stock Exchange sees over 3 billion yuan income project reviewed: Uncertainties remain over "asset-for-debt" by real controller of Shuangying Group
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On April 16, the Beijing Stock Exchange will review the listing of Guangxi Shuangying Group Co., Ltd. ("Shuangying Group").
This is one of the larger companies in terms of revenue among recent listing proposals.
Shuangying Group mainly focuses on automotive parts such as seats and interior/exterior trims, with revenue reaching 3.743 billion yuan in 2025.
However, in stark contrast to its revenue scale, Shuangying Group’s net profit attributable to shareholders for the same period was only 130 million yuan.
The main reason is the fierce overall competition in the automotive industry, where parts suppliers often have to "bow to others" and profit margins are severely squeezed.
Industry characteristics have kept Shuangying Group's capital chain under high tension, which even prompted two rounds of regulatory inquiry into the risk of cash flow interruption.
Against a background of liquidity stress, Shuangying Group’s funds were further occupied by related companies under the actual controllers. When these parties could not repay their debts, Shuangying Group had to opt for "debt-for-assets", accepting six industrial plants to settle the debt.
The appraised value at the time seemed fair, but with the dramatic shift in the real estate environment, the unit prices of similar surrounding assets have since "collapsed".
This act of injecting the actual controller’s illiquid assets into a prospective listed company is nothing short of "adding insult to injury" for Shuangying Group, which is already under financial pressure.
On the eve of the listing review, the actual controller of Shuangying Group issued a new undertaking, claiming there was no further occupation of company funds.
Whether this single undertaking can secure the ticket for listing remains under ongoing market attention.
Two Rounds of Inquiry into Cash Flow Interruption Risk
Shuangying Group is one of the few companies among recent Beijing Stock Exchange applicants with a revenue scale of several billion yuan.
With an income of 3.743 billion yuan in 2025, Shuangying Group’s scale could even make it among the top 10 listed companies on the Beijing Stock Exchange.
Specifically, Shuangying Group’s revenue mainly derives from automobile seats: 1.56 billion, 1.76 billion, and 2.877 billion yuan in 2023, 2024, and 2025, accounting for 60%-70%.
However, gross margin for seats is limited—remaining between 14% and 15% over the past three years.
This has caused a divergence between Shuangying Group’s profits and its revenue—the net profit attributable in 2025 was 131 million yuan, not even making the top 20 among current Beijing Stock Exchange listed companies.
This is a consequence of the automotive parts industry’s position.
On one hand, domestic auto parts are highly homogenized, with limited bargaining power against downstream automakers; on the other, intensifying price competition in the auto market means OEMs pass pricing pressure down to suppliers, which greatly compresses the overall profit margins in components such as seats.
Shuangying Group is further characterized by heavy dependence on major clients, further weakening its bargaining power.
In 2025, the top five clients—SAIC, Geely, Changan, VinFast, and BYD—collectively contributed 3.087 billion yuan in revenue, over 80% of total income.
Given this highly concentrated customer structure, Shuangying Group is forced not only to compromise on pricing, but also remains passive regarding settlement methods.
As major clients prefer to pay with notes, Shuangying Group once faced a negative net operating cash flow, reaching -76 million yuan in 2023 and -233 million yuan in 2024.
Such settlement methods placed considerable pressure on Shuangying Group’s finances, once prompting it to issue notes without actual transaction backing to secure operating funds.
It was not until the major expansion in 2025 sales scale—and an increase in commercial drafts eligible for derecognition—that the company’s operating cash flow turned positive.
The pressure of capital turnover is reflected not only in cash flow volatility, but also directly in the company’s debt performance.
As of the end of 2025, Shuangying Group’s consolidated liabilities had reached 2.718 billion yuan, and its asset-liability ratio had climbed to 76.87%.
Over the same period, Shuangying Group held only 579 million yuan in cash and cash equivalents.
This aroused regulatory concerns over liquidity risk.
Across two rounds of inquiry, the Beijing Stock Exchange repeatedly demanded Shuangying Group clarify: "Is there a risk of cash flow interruption?"
According to the company’s calculations, if a 12.15% average annual revenue growth is maintained over the next three years, annual liquidity funding gaps will be 132 million yuan, 103 million yuan, and 118 million yuan, which can be filled by cash on hand, operating cash accumulation, bank financing, and equity financing.
Moreover, actual controllers Yang Ying and Luo Dejiang also issued a "Liquidity Support Undertaking Letter," promising that if the company experiences two consecutive quarters of negative operating cash flow, or unrestricted cash and bank-accepted bills at month-end drop below 80 million yuan, they will provide financing guarantees or other liquidity support.
However, Yang Ying and Luo Dejiang themselves also face certain pressures.
If Shuangying Group’s listing falls through, it may trigger a "bet-on-agreement" with Yang Ying, Luo Dejiang, and 21 other shareholders (including Wenrun New Materials), requiring them to fulfill special rights such as share buybacks.
Fair on Paper?
Even though Shuangying Group itself faces funding pressure, it was quite generous to its actual controllers’ related companies.
From 2018 to 2020, Shuangying Industrial (controlled by Yang Ying and Luo Dejiang) frequently borrowed funds from Shuangying Group and its subsidiaries in order to repay bank loans, pay project engineering costs, and supplement working capital.
This behavior resulted in Shuangying Industrial accumulating 156 million yuan in non-operational fund occupation from Shuangying Group and its subsidiaries, which remained unresolved for a long time.
As most of Shuangying Industrial’s core assets were immovable property and could not be liquidated quickly to repay debts, Shuangying Group eventually opted for a debt-for-assets approach.
Shuangying Industrial set up Shuangying Technology as the specialized entity for the debt settlement. As of July 31, 2023, Shuangying Technology’s total assets (mainly six factories) were appraised at 206 million yuan, with liabilities (due mainly to borrowings owed to Shuangying Group) appraised at 181 million yuan, leaving a net asset value of 25 million yuan.
In the end, Shuangying Group acquired 100% equity in Shuangying Technology for 25 million yuan, equivalent to its net asset appraisal, thereby offsetting internal assets and liabilities.
From the appraisal value at the time, the deal did appear fair.But in hindsight, it’s actually a “loss-making” deal.
The six factories transferred for debt settlement are mainly located on Guandong Road, Yufeng District, Liuzhou City, with a total usable area of 59,200 square meters.
According to third-party appraisals by Chongqing Kunyuan and Chongqing Jindi at the time, the average unit price was 3,144.7 yuan/square meter and 3,130.67 yuan/square meter, respectively.
But today, prices have plummeted.
Xin Feng has noted that several industrial factories in the same Yufeng District, Liuzhou, are now listed at less than 1,000 yuan/square meter. For example, a 34,000-square-meter standard factory in the district is listed at only 970 yuan/square meter; another 20,000-square-meter factory in the same area is listed at just 500 yuan/square meter.
This means that, based on current listing prices of less than 1,000 yuan/square meter in the region, the true market value of these six factories has significantly fallen below their original appraised value.
While the debt-for-assets procedure achieved formal book balance, in reality, against the background of thin profit margins and high debt in the automotive parts industry, this seemingly fair “debt settlement” arrangement not only failed to recover urgently needed cash flow for Shuangying Group, but left it saddled with assets whose book value dramatically diverges from market reality.
Prior to this review, Yang Ying and Luo Dejiang added a new undertaking, stating that they are not, in any way, occupying or using company funds, nor have they illegally required the company to guarantee loans or other debts for themselves or their controlled entities. They further stated that if this undertaking is violated and the company or other shareholders suffer losses, they will bear corresponding compensation liability as required by law.
Whether this undertaking will win the approval of regulators remains to be seen.
Image source: 58.com
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