The closed-loop financing dilemma behind Xi'an's 300 million yuan private placement: majority shareholder's sole subscription, liquidity pressure, and the coexistence of control concentration risks

AI Question · Could the Risk of a Pledge by the Controlling Shareholder Affect the Stability of Control?

On March 25, Blue Whale News reported that on March 24, Xi’an Tourism Co., Ltd. released the《2025 Annual Offering of A-Share Stocks to Specific Investors (Application Draft)》, planning to issue to its controlling shareholder, Xi’an Tourism Group Co., Ltd., no more than 30,612,244 shares of A-shares, with total proceeds of no more than 300M yuan. The proceeds will be used entirely to supplement working capital and repay bank loans. This offering still needs to be reviewed and approved by the Shenzhen Stock Exchange and be registered with the China Securities Regulatory Commission.

The private placement plans to issue no more than 30.6122 million shares, with the issue price fixed at 9.80 yuan per share. Total proceeds will not exceed 300 million yuan, and will be used entirely to supplement working capital and repay bank loans. It is worth noting that the subscriber is only Xi’an Tourism Group Co., Ltd., the company’s current controlling shareholder. Its shareholding ratio has already reached 26.57%, and the transaction constitutes a related-party transaction. This means the financing is not a credit endorsement for market-oriented investors, but rather a closed-loop transfer of funds carried out within the actual control system.

Against the backdrop that the company’s attributable net profit for the first three quarters of 2025 was a loss of 80.3409 million yuan, and it is expected to record a full-year loss of 290 million yuan to 237 million yuan, with its net assets at year-end potentially turning negative, this private placement has not been designed with any industrial investment or technology upgrade-type projects. Nor has it disclosed specific debt-repayment breakdowns or a path to improve liquidity; instead, it relies only on vague statements such as “optimizing the capital structure” and “enhancing resilience against risks” as justification. This kind of purely financial financing lacking substantive business anchors—rather than being a strategic investment—looks more like a passive backstop for the risk of liquidity breakdown.

More concerning is that the fundamental business of Xi’an Tourism is already under comprehensive pressure. As of September 30, 2025, the company’s asset-liability ratio is as high as 93.55%, and its current ratio is only 0.59, far below the safety threshold. The hotel segment’s occupancy rate and average room rate are falling in tandem, leading to contraction in revenue size; meanwhile, fixed costs such as property rental are rigid and difficult to reduce, causing the revenue decline to be unable to cover operating expenses. Impairment provisions for inefficient assets in the outlet mall segment and large price-decline provisions for the Zaga Na project further erode profits. The financial reports show that among the 19 major wholly-owned subsidiaries and equity-accounted investees listed in the 2024 annual report, 11 recorded a net profit loss for the period. Among them, Xi’an Red Soil Innovation Investment Co., Ltd.’s audited net profit for 2025 was -1.5336 million yuan. Xi’an Xilv Innovation Investment Management Co., Ltd. reported a profit of 3.7574 million yuan, but its principal business is still investment rather than cultural tourism operations.

At the same time as the private placement filing, the company also announced that it intends to transfer the equity of the above two equity-invested companies, totaling 15.8125 million yuan, to Xi Lv Shi Tou, the wholly owned subsidiary of the controlling shareholder. Although the transaction does not change the scope of the consolidated financial statements, in substance it involves stripping non-core assets with remaining book net assets, and using the cash proceeds to maintain day-to-day operations. In the past 12 months, the company’s cumulative related-party transactions with the same related party totaled 34.8195 million yuan, accounting for 14.71% of the most recently audited net assets. The frequency and scale of related-party transactions continue to rise, reflecting a weakening independent operating capability of the listed company and an acceleration of resource allocation converging toward the group’s internal system.

At the industry level, the hotel and travel agency segments in which Xi’an Tourism operates are also facing structural difficulties. Data from the China Hotel Association shows that in 2024, the overall RevPAR of domestic hotels was 118 yuan, down 9.7% year over year. Nationwide, the total number of hotel rooms reached 17.64 million, while the chain penetration rate was only 40.09%, leaving many standalone hotels trapped in homogeneous low-price competition. Although Xi’an Tourism has regionally well-known brands such as “Xi Lv Wan’ao” and “Xi’an China Travel,” the revenue contribution of its hotel business is less than 30%, while the travel agency business accounts for more than 55%. The latter has been seriously squeezed by OTA platforms, and its gross margin has remained low for a long time. In its offering memorandum, the company acknowledges that “consumer preferences are shifting from ‘quantity’ to ‘quality’,” but it has not yet formed a quantifiable quality-upgrade path or provided examples of digital service capability output.

Most importantly, after this private placement is completed, the shareholding proportion of Xi Lv Group will further increase, while the controlling shareholder itself also faces risks related to equity pledges. As of September 30, 2025, Xi’an Tourism Group has cumulatively pledged 31.3882 million shares of Xi’an Tourism, representing 49.90% of the shares it holds, and representing 13.26% of the company’s total share capital. In addition to Xi’an Tourism shares, the pledged assets also include 40 million shares of Xi’an Yinshi. The combined pledge market value of the two pledges is approximately 836 million yuan, barely covering the 500 million yuan financing amount. If volatility in the secondary market share price intensifies, or if Qujiang Culture Holdings Co., Ltd. fails to repay the loan on time, the risk of pledge liquidation could directly transmit to the stability of control rights of the listed company.