200 million shares auctioned, Xi Wang Food with losses exceeding 1.9 billion over four years likely to change hands, Shandong Zouping tycoon mired in debt quagmire

What is the trigger behind AI · Xiwang Group’s debt crisis?

This article is sourced from Times Weekly Reporter: Zhang Yijing

Image source: Tuji Creative

The controlling stake of A-share “Number One Corn Oil Stock” is facing a major upheaval.

Recently, Xiwang Food (000639.SZ) announced that 200 million shares held by its controlling shareholder, Xiwang Group Co., Ltd. (hereinafter “Xiwang Group”), will be auctioned via judicial sale on JD.com from 10:00 a.m. on March 30, 2026, to 10:00 a.m. on March 31, 2026 (excluding delays).

Regarding this auction, Xiwang Food explicitly stated in its announcement that the judicial disposal of these shares carries the risk of causing a change in the company’s actual control.

It is understood that the 200 million shares account for 99.01% of Xiwang Group’s total holdings in the company and 18.53% of the company’s total share capital. If the shares are auctioned successfully, Xiwang Group and its concerted parties, Shandong Yonghua Investment Co., Ltd. and Wang Di (Wang Yong’s son), will hold only 20.14 million shares of Xiwang Food, accounting for 1.87% of the total share capital.

Data shows that Xiwang Food mainly produces corn oil, sunflower seed oil, and other edible vegetable oils, as well as sports nutrition and weight management products, engaging in R&D, production, and sales. The company’s actual controller is Wang Yong, chairman of Xiwang Group. In 2011, Xiwang Food was listed through a backdoor listing of Jinde Development, becoming China’s “Number One Corn Oil Stock” in the A-share market.

Additionally, according to Xiwang Food’s 2025 semi-annual report, the company owns the largest corn germ oil production base in China, with a market share of over 30%, and is the only enterprise in China with large-scale corn deep processing and full industry chain integration.

Regarding this judicial auction of Xiwang Food’s equity, Zhang Xinyuan, head of research at domestic consulting firm Kofang Think Tank, told Times Weekly that if the auction results in a change of actual control, it could trigger localized adjustments in the edible oil industry pattern in the short term. As a niche oil type, if Xiwang’s market position shifts due to changes in strategic direction or channel stability caused by the equity change, it may create market penetration opportunities for other corn oil brands.

“Long-term, the overall competitive landscape of the industry is unlikely to change fundamentally, because the edible oil market is mainly dominated by soybean oil, rapeseed oil, etc., with corn oil accounting for a relatively small proportion,” Zhang said.

As for potential buyers of this judicial auction, Gao Chengyuan, chairman and CEO of the marketing consulting firm Tianyuan, believes it is unlikely to be traditional grain and oil companies. In his view, the greatest asset value of Xiwang Food currently lies in its corn oil production capacity and full industry chain layout, but it has suffered nearly 2 billion yuan in losses over the past four years. For leading companies like Jinlongyu and COFCO, building their own capacity is far more cost-effective than acquiring a “sick” target.

He pointed out that the most likely actual buyers of Xiwang Food’s equity are industry capital or local state-owned platforms—industry capital values the shell resources and capacity integration opportunities, while local SOEs may be motivated by maintaining local employment and tax revenue.

Senior corporate management expert and senior consultant Dong Peng shares this view. Traditional leading grain and oil groups tend to wait and see due to antitrust concerns and to avoid taking on heavy debt; conversely, food companies eager to connect the full corn industry chain or capital seeking distressed asset restructuring may see this judicial auction as a rare opportunity to acquire control at a lower cost and reshape industry patterns.

On March 16 (the first trading day after the announcement), Xiwang Food’s stock price hit the daily limit, closing at 3.14 yuan per share, with a total market value of 3.389 billion yuan.

Image source: Tonghuashun

The origin and development of Xiwang Food’s control crisis

Behind this judicial auction involving Xiwang Food’s control rights is a true story of how billionaire Wang Yong from Zouping, Shandong, and his “Xiwang system” companies are mired in debt.

It is known that Xiwang Group is headquartered in Zouping City, Shandong Province, founded by Wang Yong in 1986. Over the years, Xiwang Group has grown from a township factory into a large private enterprise involved in corn deep processing, special steel, logistics, and international trade. At its peak, the group had total assets of 50 billion yuan and controlled three listed companies, including Xiwang Food (000639.SZ), Xiwang Special Steel (01266.HK, delisted), and Xiwang Real Estate (02088.HK, suspended trading). Wang Yong’s family is also a well-known wealthy family in Zouping; in 2013, Forbes China listed him with a net worth of 6.1 billion yuan, ranking 156th.

The trigger that dragged this large private enterprise into a debt crisis was an external guarantee.

In 2017, Qixing Group, also based in Zouping, experienced a liquidity crunch, and Xiwang Group, as the largest guarantor, was also affected. According to Xiwang Group’s report, as of May 17, 2017, the group’s guarantee balance for Qixing Group was 2.9 billion yuan, accounting for 77% of its external guarantee quota.

In October 2019, Xiwang Group defaulted on bonds, facing a debt crisis of over 100 billion yuan. In 2020, the group reached a settlement with creditors, avoiding bankruptcy reorganization.

However, the settlement did not seem to be fully implemented. In May 2024, Xiwang Group was again listed as a person subject to enforcement, involving a target amount of 3.043 billion yuan. Chairman Wang Yong was repeatedly listed as a person subject to enforcement by courts in Jinan, Qingdao, and other cities. Notably, in October 2024, Qingdao Intermediate People’s Court issued an enforcement bounty notice, publicly soliciting clues to Wang Yong’s and his son’s assets worth 330 million yuan; those who help the court execute the assets will be paid a 3% reward based on the actual amount recovered. Later, as the enforcement applicant and the defendant reached a settlement, the bounty notice was withdrawn.

Latest data from Tianyancha shows that as of March 15, 2026, Xiwang Group still has four enforcement records, with a total enforcement amount of 2.598 billion yuan. The company also has 50 instances of equity freeze information, with 24 freezes occurring in 2025.

Image source: Tianyancha

As the debt crisis worsened, Xiwang Group’s core listed platform, Xiwang Food, was also affected. From 2023 to 2025, the company repeatedly disclosed “Simplified Equity Change Reports,” revealing the auction of holdings by Xiwang Group and its concerted party Yonghua Investment.

Reviewing the announcements shows that in April 2024, 6.44 million shares of Xiwang Food held by Xiwang Group were auctioned; in 2023-2024, Yonghua Investment’s holdings were auctioned three times, totaling over 114 million shares; in January and March 2025, Yonghua Investment’s shares were auctioned twice more, totaling over 116 million shares.

Most of these shares were acquired by active auction market players such as Han Lili, An Zhongge, Li Songfeng, and Fang Lei. As of Q3 2025, Li Songfeng, Fang Lei, and Zhong Ge ranked 4th, 5th, and 8th among the top ten circulating shareholders of Xiwang Food, holding 32.31 million, 25 million, and 15 million shares respectively.

The sports nutrition segment “lags behind,” with losses exceeding 1.96 billion yuan over the past four years

While shares are frequently auctioned, the performance of Xiwang Food, the listed company, has also been poor.

According to the latest performance forecast, in 2025, the company’s net profit attributable to shareholders is expected to be between -1.32 billion and -880 million yuan, with a significant loss increase compared to the previous year; net profit after deducting non-recurring gains and losses is also expected to be in the same range, with a larger loss.

Reviewing past financial reports, this marks the fourth consecutive year of losses for Xiwang Food. From 2022 to 2024, the company recorded net profits of -619 million, -16.86 million, and -444 million yuan respectively. Using the 2025 forecast’s lower loss estimate of 880 million yuan, the company’s cumulative loss over four years exceeds 1.96 billion yuan.

The company attributes the main reason for the 2025 forecasted loss to underperformance in its sports nutrition segment.

It is known that Xiwang Food’s nutritional supplement business dates back to 2016. In that year, the company successfully acquired Kerr, a well-known North American sports nutrition and weight management health food company (now “Iovate”), marking its entry into the nutritional supplement industry as a “second growth curve.”

Unexpectedly, this “textbook” acquisition eventually caused the company’s performance to plummet.

According to the forecast, rising raw material costs for whey protein and increasing competitive pressure led to underperformance in the sports nutrition segment. Under relevant accounting standards, Xiwang Food expects to recognize intangible asset impairment losses of approximately 950 million to 1.5 billion yuan in 2025.

It is noteworthy that, due to underperformance in the sports nutrition segment, the company had already recognized impairment losses of about 863 million yuan on goodwill and intangible assets in 2024.

Beyond the slowdown of the “second growth curve,” Xiwang Food’s traditional main business—vegetable oils—is also facing sluggish growth. From 2022 to 2024 and in the first half of 2025, the company’s vegetable oil revenues were 2.853 billion, 2.385 billion, 2.253 billion, and 942 million yuan respectively, with year-on-year declines of 9.56%, 16.41%, 5.55%, and 11.84%.

Zhang Xinyuan told Times Weekly that the decline in Xiwang Food’s edible oil revenue may be related to changes in the market competition landscape. “Because domestic production capacity is relatively oversupplied, the market competition is fierce, and consumers’ demand for quality and health in edible oils is increasing, which intensifies brand competition.”

For Xiwang Food, with its controlling shareholder mired in debt and continuous losses over the past four years, this veteran grain and oil enterprise may be at its most critical crossroads since listing. Whether this judicial auction of control rights can bring new opportunities remains to be seen.