On the evening of March 23, Yulong Shares (601028) announced that the company's chairman Niu Lei applied for resignation. The company had previously stated that it planned to voluntarily delist, which may become the first voluntary delisting case of A shares in 2025.

Previously, Yulong Co., Ltd. announced on the evening of March 21 that due to poor operating conditions and continued deterioration of cash flow, the company's operations are facing major uncertainties. In order to protect the interests of small and medium-sized shareholders, it plans to voluntarily withdraw the listing of its A-share stocks on the Shanghai Stock Exchange.

Yulong shares will resume trading from the opening of the market on March 24. Data shows that as of September 30, 2024, the number of Yulong shareholders is about 38,000, and the company's latest market value is 10.21 billion yuan.

Chairman resigns for personal reasons

Yulong shares announced on the evening of the 23rd that it had recently received a resignation report from the company's chairman Niu Lei. Due to personal reasons, Niu Lei applied to resign from the company's chairman, director and member of the board of directors' special committee. After resigning from the above positions, Niu Lei will no longer hold any position in the company.

Yulong shares stated that according to relevant regulations, Niu Lei's resignation will not cause the company's board of directors to fall below the statutory minimum number of members, and will not have a significant impact on the company's daily operations and management. His resignation report will take effect from the date of delivery to the company's board of directors. The company will complete the election of directors and the election of a new chairman as soon as possible in accordance with relevant statutory procedures, and fulfill its information disclosure obligations in a timely manner.

According to his resume, Niu Lei has worked in Jinan Hi-Tech Holding Group Co., Ltd., Jinan Hi-Tech Financial Investment Co., Ltd., and Jinan Hi-Tech Development Co., Ltd., and has served as vice chairman and general manager of the company. He is currently a member of the Party Committee, deputy general manager, and chairman of the company of Jinan Hi-Tech Holding Group Co., Ltd.

The chairman was criticized

E company reporter noticed that Niu Lei had received a notice of criticism from regulators last year.

On July 11 last year, the Shanghai Stock Exchange website released the "Decision on Criticizing Shandong Yulong Gold Co., Ltd. and Relevant Responsible Persons" (hereinafter referred to as the "Decision on Criticizing"). According to the "Decision on Criticizing", it was found that on April 17, 2024, Yulong Co., Ltd. disclosed an announcement on the correction of prior accounting errors, stating that the company's method of recognizing operating income from some bulk trading businesses was changed from the "gross method" to the "net method", and the operating income and operating costs of the 2023 first quarter report, 2023 semi-annual report and 2023 third quarter report were adjusted according to the retrospective restatement method.

The Shanghai Stock Exchange pointed out that periodic reports are matters of concern to investors and may have an impact on the company's stock price and investor decisions. Yulong shares should objectively and prudently calculate and disclose the current financial data in accordance with accounting standards. The financial data disclosed in the company's periodic reports are inaccurate, with large amounts and proportions of errors, which violates relevant regulations.

In view of the aforementioned facts and circumstances of violation, and in accordance with relevant regulations, the Shanghai Stock Exchange decided to issue a notice of criticism to Yulong Co., Ltd. and its then chairman Niu Lei, then general manager Li Zhenchuan, then financial director Liu Fengyu, and then director and deputy general manager Lu Fenqi.

Or become the first company to voluntarily delist this year

Yulong Co., Ltd. was established in 1999 and is mainly engaged in the mining and selection of gold and precious metal minerals and new energy and new material minerals. In the first three quarters of 2024, Yulong Co., Ltd.'s revenue was 1.3 billion yuan, a year-on-year decrease of about 20%; net profit attributable to the parent was 288 million yuan, a year-on-year decrease of 21%; net cash flow from operating activities was -2.271 billion yuan.

On the evening of March 21 this year, Yulong Shares announced that due to the company's poor operating conditions and continued deterioration of cash flow, the company's operations are facing major uncertainties. In order to protect the interests of small and medium-sized shareholders, in accordance with the "Shanghai Stock Exchange Listing Rules" and other relevant laws, regulations and normative documents, it is planned to actively withdraw the listing and trading of A-shares on the Shanghai Stock Exchange by way of a shareholders' meeting resolution, and apply for the stock to enter the delisting section of the National Equities Exchange and Quotations for continued trading.

Yulong shares announced that the board of directors has agreed to set up a protection mechanism for dissenting shareholders and other shareholders in the delisting plan of Yulong shares. The controlling shareholder Jigao Capital will provide cash options to all A-share shareholders registered on the equity registration date except Jigao Capital (except for shares with restricted sales or rights restrictions). The exercise price is 13.20 yuan per share, which is higher than the 30-day average trading price.

Yulong shares said that it intends to voluntarily delist because its current production and operation are facing major uncertainties. The announcement shows that the company's core assets have been frozen due to multiple lawsuits and arbitration disputes, and the company's debt risk has increased, bringing major uncertainties to the company's future governance and production and operation.

At the same time, Yulong shares' many mining projects are facing serious difficulties in production and operation. For example, the Loufanggou vanadium mine owned by Shaanxi Shanjin is currently in the early stage of infrastructure investment. Yulong shares has invested a total of 240 million yuan, but the project does not have the ability to generate revenue and is short of cash flow.

Yulong shares also made it clear that after the termination of listing, it plans to take the following measures to enhance the company's operating capabilities, improve the company's cash flow, and enhance the company's sustainable operating capabilities: First, do its utmost to solve the problems encountered in the current precious metal mining and selection business, and strive to improve the company's current operating conditions; second, strive to broaden possible financing channels, reduce operating costs and capital outflows, and control and gradually improve the company's unfavorable situation of large net cash outflows as much as possible; third, continue to improve the company's governance structure, optimize the internal control management system, and strive to increase investment in the main business and enhance the company's sustainable operating capabilities when cash flow improves.