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The second largest shareholder of Asia Potassium International (000893) plans to "clear out" its shares. Guo Jinshu, known as the "coal king" of Inner Mongolia, is about to take over these shares, which together account for more than 9% of the total share capital of Asia Potassium International.

On the evening of July 31, Asia Potassium International announced that Mudanjiang Guofu Investment Center (Limited Partnership) (hereinafter referred to as "Guofu Investment"), a shareholder holding more than 5% of the shares, recently signed an agreement with Huineng Holding Group Co., Ltd. (hereinafter referred to as "Huineng Group", formerly known as "Inner Mongolia Huineng Coal and Electricity Group Co., Ltd.") on share transfer matters. Guofu Investment intends to transfer its 83.6493 million shares of Asia Potassium International (accounting for 9.01% of the total share capital of the listed company) to Huineng Group through an agreement transfer.

Prior to this equity change, Guofu Investment held shares accounting for 9.01% of Asia Potassium International’s total share capital. After this equity change, Guofu Investment will not hold shares in the listed company.

It was disclosed that the legal person of Huineng Group is Guo Jinshu, known as the "coal king" of Inner Mongolia.

According to the official website of Huineng Group, the group was established in 2001 and has 70 branches and subsidiaries, total assets of 135 billion yuan, and 16,000 employees. It is a large-scale joint-stock private enterprise with coal, electricity, and chemical industry as its main businesses, new energy, new materials, and modern coal chemical industry as its new development direction, and integrating logistics, finance, real estate, roads and bridges, water affairs and other industries.

The company has now formed a production capacity of 50 million tons of coal, 1.53 million kilowatts of electricity, and 1.6 billion cubic meters of coal-to-gas and liquefaction; in addition, 35.4 million tons/year of coal, 2.6 million tons/year of new materials, 1.32 million kilowatts of thermal power, 1.1 million kilowatts of photovoltaics, and 70,000 tons of aluminum-silicon alloy production capacity are under construction.

In 2023, the Group achieved sales of 68.2 billion yuan including tax and paid 13.57 billion yuan in taxes and fees. It ranks 240th among the top 500 private enterprises in China, 22nd among the top 50 coal enterprises in China, and 3rd among the top 100 private enterprises in the autonomous region.

After the completion of this share transfer, Huineng Group will hold 83.6493 million shares of the listed company (accounting for 9.01% of the total share capital of the listed company) and corresponding shareholders' equity, becoming a shareholder of Asia Potassium International with a shareholding of more than 5%.

Asia Potassium International said that this change in equity will not result in a change in the company's status of having no controlling shareholder and no actual controller.

It is worth noting that a high premium was given in this transaction.

After a period of downward movement, Asia Potassium International closed at 15.5 yuan per share as of July 31. However, the two parties agreed that the transfer price of the target shares was 17.53 yuan per share.

Based on this calculation, the total transfer price of the target shares in this transaction reached 1.466 billion yuan.

Regarding this acquisition, Huineng Group said that it was optimistic about the long-term development prospects of the listed company and based on its own business development and financial arrangement needs, it acquired 83.6493 million shares of Asia Potassium International through an agreement transfer and planned to hold the equity for a long time. After this equity change, Huineng Group has no plan to increase its holdings of listed company shares in the next 12 months.

Before Huineng Group planned to take over Guofu Investment, Asia Potassium International reported that its senior executives had been detained.

In March this year, Asia Potassium International announced that its chairman Guo Baichun was investigated and detained by the Ningxia Hui Autonomous Region Supervisory Committee for suspected dereliction of duty while serving as deputy mayor of Yinchuan City, Ningxia Hui Autonomous Region.

Subsequently, Ma Yingjun, general manager of Asia Potassium International, was also investigated and detained by the Ningxia Hui Autonomous Region Supervision Committee for suspected serious violations of duty.

At the same time, the company's deputy general manager Tong Yongheng applied to resign from the position of deputy general manager and all positions in the company's subsidiaries for personal reasons. Director Xue Yuedong resigned from the position of director due to personal reasons involving a right of recovery dispute.

Asia Potassium International specializes in potash mining, potash fertilizer production and sales. After years of hard work, the company has built a sales network and logistics system with Southeast Asia and East Asia as the core, and has also expanded into markets such as South Asia and Oceania.

In terms of resources, YAKA International focuses on potash mining, potash fertilizer production and sales. It currently owns 263.3 square kilometers of potash mining rights in Khammouane Province, Laos, and its pure potassium chloride resource reserves are estimated to exceed 1 billion tons.

The region is rich in potash deposits and has good resource endowment conditions, making it suitable for large-scale development of potash salt projects. As one of the first Chinese companies to "go global" and implement overseas potash salt development, in March 2022, the company's first 1 million tons/year potash fertilizer project reached full production, making it the first potash fertilizer project in my country to achieve million-ton scale production overseas.

In January 2023, the company's second 1 million tons/year potash fertilizer project was successfully put into trial operation. In April 2024, the company's third 1 million tons/year potash fertilizer project was successfully put into trial operation. At present, the company has become the largest potash fertilizer enterprise in Asia with the largest single resource volume and the largest scale in Southeast Asia, and has achieved efficient coordinated development of the two mine resources.

However, in recent years, Asia Potassium International's performance has declined. After its net profit fell 39.12% year-on-year in 2023, the company expects to achieve a profit of 220 million to 330 million yuan in the first half of 2024, a year-on-year decline of 54% to 69%.

In response, Asia Potassium International stated that the company's production and sales volume in the first half of the year both increased year-on-year, but due to the continued sluggish international potash fertilizer prices, the company's potash fertilizer sales prices in the first half of the year fell year-on-year, resulting in a year-on-year decline in the company's potash fertilizer business gross profit margin in the first half of the year.

In addition, affected by the Lao government's imposition of export tariffs on potassium chloride, the company accrued Lao export tariffs at a tax rate of 7%, resulting in an increase in the company's tax costs in the first half of the year compared with the same period last year.

Editor: Chen Lixiang

Proofreading: Zhu Tianting