Betting countdown of 2 months, Yongda Shares at Beijing Stock Exchange rushing IPO second review

Ask AI · How does the countdown of the betting agreement affect Yongda Shares’ IPO fate?

Li family holds 86.56% of the shares.

Author | Liu Junqun

Editor | Liu Qinwen

The laundry detergent you use daily, the photovoltaic panels generating electricity at home, the medicinal capsules you take, even the gasoline you add to your car—these seemingly unrelated daily necessities all rely on the same key equipment in their manufacturing process: pressure vessels.

As an important supplier in the pressure vessel industry, Jiangsu Yongda Chemical Machinery Co., Ltd. (hereinafter “Yongda Shares”) first went public on the review meeting on November 26 last year but failed to pass, becoming the first IPO company since 2025 to be given a “deferred review” result by the Beijing Stock Exchange. After more than four months, Yongda Shares made a comeback, scheduled to reappear before the Beijing Stock Exchange for listing review on April 10, 2025.

The company’s client list prominently features industry giants such as Sinopec, CNOOC, and Shengsheng Silicon Industry, but the company also faces receivables risks, with 77.98 million yuan owed by clients, requiring installment repayment over four years. Meanwhile, the actual controller, the Li family, has cashed out 179 million yuan through large dividends over three years.

The family story behind this company is equally dramatic. The 81-year-old father, Li Changzhe, holds an absolute controlling stake of 61.62%, yet only serves as deputy minister of the administrative department; whereas the third son, Li Jin, who owns only 7.74%, is the actual operational leader, serving as chairman and general manager. Moreover, Li Changzhe has stated in his will that all his shares are to be inherited by Li Jin, with the other two sons holding no inheritance rights.

Now, with the Li family leading Yongda Shares to a second IPO review, will it go smoothly?

01

Annual revenue of 700 million, second review

Client’s 77.98 million yuan receivable paid over 4 years

Yongda Shares’ first review was deferred, not by chance. The questioning from the issuing review committee focused on one core issue: Is the revenue from the photovoltaic business genuine and reliable? Can the accounts receivable on the books be collected? To answer this, we need to start with Yongda Shares’ core business.

Yongda Shares’ main products are specialized pressure vessels capable of withstanding high pressure and strong acids and alkalis. Chemical plants rely on these to refine crude oil into plastic pellets, photovoltaic companies use them to smelt silica into high-purity silicon, pharmaceutical companies rely on them for antibiotic purification—all depend on this core equipment. The company mainly produces four types of non-standard pressure vessels: reactors, heat exchangers, separators, and storage tanks. From 2023 to 2025, the revenue from this business is projected at 712 million yuan, 810 million yuan, and 717 million yuan respectively, accounting for over 99% of total revenue each year.

Supporting this scale is a “luxurious” client list—Yongda Shares is not only a first-tier supplier to state-owned giants like Sinopec, PetroChina, CNOOC, and China Nuclear Group, but also has deep cooperation with top design institutes such as Saiding Engineering and Donghua Technology, as well as leading chemical companies like Shenghong Group, Hengli Petrochemical, GCL Technology, and Satellite Chemical.

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However, a highly concentrated client structure is always a double-edged sword. From 2023 to 2025, the top five clients contributed 67.32%, 66.47%, and 72.91% of sales revenue respectively, with concentration increasing rather than decreasing.

The company’s prospectus warns that if the main clients’ operations or creditworthiness deteriorate, or if cooperation changes, it may lead to order reductions, payment delays, and impact the company’s sustainable operation and profitability.

This logic was later validated in practice. As early as 2021, Yongda Shares entered the photovoltaic sector but faced difficulties. The revenue from pressure vessels in the photovoltaic field fell from 95 million yuan in 2022 to 26 million yuan in 2023, then rebounded to 156 million yuan in 2024, once seen as a “second growth curve” to boost performance.

But the good times didn’t last. Overcapacity in the photovoltaic industry and waning enthusiasm from downstream clients for new production lines caused a sharp decline. From January to October 2025, new orders in the photovoltaic business were zero, with shipment volume plunging from 7,785 tons in 2023 to 275 tons—an over 82% drop. Yongda Shares admitted in response to Beijing Stock Exchange inquiries that if silicon material and wafer prices remain low, the company’s photovoltaic performance could decline significantly in the future.

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The order collapse immediately raised concerns about the collection of payments from photovoltaic clients.

Between December 2022 and February 2023, Yongda Shares signed a pressure vessel procurement contract for the “200k tons of high-purity silicon project” with Xinjiang Dongbu Shengsheng Silicon Industry Co., Ltd. (“Xinjiang Shengsheng Silicon”).

According to the contract, Yongda completed equipment production and delivery from May to October 2023. Currently, the project is 65% complete; the pressure vessel equipment has been installed on-site, but final debugging and acceptance are pending.

Although the equipment has not yet passed final acceptance, Yongda confirmed revenue of 175 million yuan for this project in November 2025. This makes Xinjiang Shengsheng Silicon the company’s largest customer in 2025, accounting for 23.3%-24.96% of the expected annual revenue. However, as of now, the company has only received 60% of the payment as per the contract.

The key issue is the remaining 40% of the installation and debugging payment. Due to Xinjiang Shengsheng Silicon’s operational and liquidity pressures, both parties reached a special repayment agreement for the 77.97 million yuan remaining: Starting from November 2025, the client will pay 1.5 million yuan monthly, with full repayment taking 52 months, i.e., over 4 years. This means Yongda will have to wait until the end of 2029 to recover all funds.

This arrangement poses significant financial risks. Yongda disclosed in its prospectus that if Xinjiang Shengsheng Silicon makes payments as scheduled, the company expects to recognize a bad debt provision of 5.72 million yuan; if default occurs, it could result in a loss of 38.99 million to 77.99 million yuan in 2025.

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It’s worth noting that the debtor, Xinjiang Shengsheng Silicon, is a controlled subsidiary of Shengsheng Silicon (603260.SH), which holds 80.41% of the shares. Shengsheng Silicon is a global leader in silicon-based new materials, founded in 2005 and listed on the Shanghai Stock Exchange’s main board in 2017. Shengsheng Silicon itself is also under financial pressure. As of the third quarter of 2025, its cash and cash equivalents were only 200k yuan, down over 600 million yuan from the end of 2024, while short-term borrowings reached 4.97 billion yuan, and non-current liabilities due within one year totaled 1.14B yuan.

Besides Shengsheng Silicon, another photovoltaic client, Runyang Yueda, also faces unresolved payment disputes.

In 2024, Runyang Yueda was Yongda’s fourth-largest customer, contributing 68.63 million yuan in revenue. Since then, its financial situation has worsened, and it has been unable to pay. In October 2024, after court mediation, the client promised to pay in installments 35.44 million yuan, but the agreement has yet to be fulfilled. Yongda filed for compulsory enforcement in January 2025, but the court has not yet filed a case. Currently, the company has fully provisioned 33.04 million yuan for this receivable in the first half of 2025.

The two bad debts compound, further highlighting Yongda’s receivables issues. From 2023 to 2025, the book value of accounts receivable was 205 million yuan, 264 million yuan, and 244 million yuan respectively, totaling 713 million yuan over three years, accounting for nearly 34% of revenue. As of June 2025, the receivables balance rose further to 338 million yuan, representing 78.76% of the current period’s revenue.

Looking at overall performance, from 2023 to 2025, Yongda’s revenue was 712 million yuan, 819 million yuan, and 727 million yuan, with net profits of 130 million, 106 million, and 109 million yuan respectively. Notably, in 2024, revenue declined by 15.04% year-on-year, and net profit fell by 18.35%. In 2025, revenue further dropped 11.28% year-on-year, while net profit slightly rebounded by 2.49%, still well below 2023 levels.

02

81-year-old father, son, daughter-in-law all involved

Company faces betting pressure

Yongda Shares is a typical family business. Li Changzhe, his son Li Jin, and daughter-in-law Gu Xiuhong (Li Jin’s spouse) together hold 86.56% of the shares, forming an absolute controlling pattern.

However, the family’s power distribution is full of intrigue. 81-year-old Li Changzhe, holding 61.62%, is the actual controller but only serves as deputy minister of the administrative department, not sitting on the board or supervisory committee; meanwhile, the son Li Jin, with only 7.74%, is the chairman and CEO, wielding actual operational power.

This “shareholding and control separation” arrangement is part of a family shareholding adjustment story.

The story begins with the company’s origins. In 2009, Li Jin and his father-in-law Gu Yuwen co-founded Yongda’s predecessor, Yongda Limited. In September 2016, Li Jin transferred his 71% stake (valued at 6.65B yuan) to his father Li Changzhe free of charge, with no consideration.

In 2021, Gu Yuwen passed away; he held 20% of the company’s shares before his death, which were also exited in 2021. The details of Gu’s shareholding arrangement are not disclosed in the prospectus, but Gu Yuwen’s daughter and Li Jin’s wife, Gu Xiuhong, currently holds 17.2% and serves as a director.

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Regarding Li Jin’s transfer of shares to his father Li Changzhe, the company explained it as “internal family property distribution,” claiming that Li Changzhe had made a will to inherit all shares from Li Jin, thus exempting the payment obligation. This arrangement drew regulatory inquiries. The Beijing Stock Exchange asked whether there were circumstances affecting share clarity or control stability. Only by July 2025 did Li Jin and Li Changzhe sign supplementary agreements, further confirming that the inheritance arrangement in the will exempted the transfer payment, which was then disclosed.

It’s noteworthy that Li Changzhe’s will designated all shares to be inherited by the third son, Li Jin, excluding the eldest son, Chen Hanyan, and the second son, Li Lan. Chen Hanyan and Li Lan are still employed in the company, serving as procurement and business managers, each indirectly holding 0.72% of shares.

Additionally, Li Changzhe’s grandson (Chen Hanyan’s son), Li Xinxing, also serves as a business manager, indirectly holding 0.14% of shares.

The prospectus shows that from 2022 to 2024, the company paid out a total cash dividend of 203 million yuan, with Li Changzhe’s family receiving about 179 million yuan based on their 86.56% stake.

Previously, the company planned to raise 608 million yuan via IPO, with 50 million yuan for working capital. After multiple inquiries from the Beijing Stock Exchange, the fundraising scale was reduced to 458 million yuan, and the supplementary funding project was canceled.

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Beyond family governance, the process also faces pressure from the betting agreement.

On December 31, 2024, Yongda Shares signed a betting agreement with investors including Shenggang Investment, Zhonggao Investment, and Jiequan Investment, setting a clear IPO window: must successfully list before June 30, 2026; otherwise, investors can require the company to buy back shares.

Although these special rights clauses in the agreement expired on April 27, 2025, according to the “First Reply Letter,” if the company fails to list or voluntarily withdraws its application, these clauses will automatically re-activate.

In this regard, Baowenxi, chief economist of China Enterprise Capital Alliance, said that betting clauses could increase the actual controller’s debt burden and affect shareholding stability, which warrants close attention.

From family power arrangements, large pre-IPO dividends, to urgent betting agreements, Yongda Shares faces a dual test of corporate governance and capital operation. Will this family business successfully pass the IPO hurdle?

Do you think Yongda Shares will get through the review? Feel free to leave your comments below.

Author’s note: Personal opinions are for reference only.