On the evening of January 22nd, Shanghai Yiyuan Communication Technology Co., Ltd. (Yiyuan Communication) announced that the company’s actual controller had gone through a divorce, with the woman receiving shares worth 1.1 billion yuan. On the same day, another listed company’s actual controller got divorced, with the woman receiving a 400 million yuan settlement.
Yiyuan Communication issued a statement on the evening of the 22nd, stating that on the 21st, the company received a notification from the controlling shareholder and actual controller of the company, Qian Penghe, that Qian Penghe and Ms. Minhong Mao had completed the divorce proceedings and arranged for the division of shares in the divorce agreement.
After the divorce, Ms. Minhong Mao will receive 12.56 million shares of Yiyuan Communication, with a shareholding ratio of 4.80%. Based on Yiyuan Communication’s closing price of 87.8 yuan per share as of January 22nd, the market value of the shares Ms. Minhong Mao receives is approximately 1.1 billion yuan.
On the evening of January 22nd, Yiyuan Communication released a performance forecast, stating that the company is expected to achieve operating income of 18.56 billion yuan in 2024, a year-on-year increase of 33.9%; and a net profit attributable to the parent company of 540 million yuan, a year-on-year increase of 495.33%.
According to a report by Daily Economic News on January 23rd, since 2024, Yiyuan Communication’s stock price has risen rapidly from a low of 29.78 yuan per share to a high of 90.18 yuan per share, an increase of over 200%, with a total market value approaching 23 billion yuan. From the end of November 2024 to the present, Yiyuan Communication’s stock price has risen by nearly 80%.
As of 3:00 pm Beijing time on January 23rd, Yiyuan Communication’s stock price was reported at 80.90 yuan per share, a decrease of 7.86%, with a total market value of 21.168 billion yuan.
Also on the 22nd, another A-share listed company, Henan Jindan Lactic Acid Technology Co., Ltd. (Jindan Technology), announced the divorce of its controlling shareholder, actual controller, and chairman, Zhang Peng.
The announcement stated that Zhang Peng and Ms. Li Zhongmin had completed the divorce proceedings and made relevant arrangements for the division of shares. According to the “Divorce Agreement” signed by both parties, Zhang Peng intends to transfer his 24 million shares of Jindan Technology, accounting for approximately 12.47% of the total share capital of Jindan Technology (12.61% of the total share capital excluding repurchased shares), to Ms. Li Zhongmin. Based on Jindan Technology’s closing price of 17.33 yuan per share on January 22nd, the corresponding market value of the shares received by Ms. Li Zhongmin is approximately 416 million yuan.
After this equity change, Mr. Zhang Peng remains the largest shareholder of the listed company, holding the most voting rights at the shareholders’ meeting.
Jindan Technology’s performance forecast released on the 22nd shows that the company expects a net profit attributable to shareholders of a listed company in 2024 to be between 30-43 million yuan, a year-on-year decrease of 49.55%-64.80%; and a net profit after deducting non-recurring gains and losses of 15-22 million yuan, a year-on-year decrease of 61.04%-73.44%.
As of the A-share closing on January 23rd at 3:00 pm Beijing time, Jindan Technology’s stock price was reported at 16.06 yuan per share, a 7.33% decrease, with a market value of 30.9 billion yuan.
In China, the Chinese Communist Party regulatory authorities have clear regulations on major shareholders reducing their holdings. Many shareholders have resorted to divorce to divide equity in order to reach a 5% ownership threshold for reducing their holdings without the need to issue a public announcement. As a result, A-shares often see news of major shareholders paying sky-high divorce settlements. Although many retail investors are very dissatisfied with this, there is little they can do.