Guangxi Tianyuan Biochemical withdraws Shenzhen main board IPO, originally planned to raise 630 million yuan

September 24 — The Shenzhen Stock Exchange (SZSE) has confirmed that Guangxi Yuanhua Biochemical Co., Ltd. ("Yuanhua Biochemical") has withdrawn its initial public offering (IPO) application for the main board, changing the review status to "terminated (withdrawn)."

On the same day, the SZSE issued a decision to terminate the review of Yuanhua Biochemical's IPO, citing the company's recent submission of a withdrawal request for its IPO application on the main board.

IPO Timeline

• June 20, 2025: Yuanhua Biochemical's IPO application was accepted by the SZSE, with Guohai Securities Co., Ltd. acting as the sponsor.
• July 5, 2025: The SZSE issued the first round of review inquiries.
• July 2025: The Securities Association of China included Yuanhua Biochemical in the second batch of on-site IPO inspections for 2025.
• July 20, 2026: The SZSE issued a second round of review inquiries.
• August 31, 2026: Yuanhua Biochemical disclosed its response to the second-round inquiries.
• Less than one month later: The project was terminated.

Company Overview

Founded in 2001, Yuanhua Biochemical is a high-tech enterprise operating in three core business segments: pesticides, pesticide-fertilizer combinations, and intelligent agricultural machinery. Its primary business focuses on pesticides and fertilizer products. The company wholly owns five pesticide-certified enterprises and holds over 400 registered products covering pest, disease, and weed control for major grain and cash crops in China.

IPO Fundraising Plan

According to the prospectus, Yuanhua Biochemical originally planned to raise approximately RMB 630 million through the IPO. The funds were to be allocated to the following projects:

• Guangxi Shun'an Green Agricultural Chemicals and Supporting Processing Center Project (Phase I)
• Guangxi-ASEAN Economic and Technological Development Zone Production Base Green and Digital Transformation Project
• Henan Jintiandi Production Base Intelligent Transformation Project
• Regional R&D Center Construction Project
• Agricultural Service Sales New Channel Empowerment Construction Project

The company stated that all investment projects are aligned with its core business, focusing on R&D innovation, capacity expansion, production line upgrades, and sales channel development.

Financial Performance

| Period | Revenue (RMB) | Net Profit Attributable to Parent (RMB) | |--------|---------------|----------------------------------------| | 2023 | 1.774 billion | 229 million | | 2024 | 1.750 billion | 249 million | | 2025 | 1.721 billion | 244 million |

Yuanhua Biochemical attributed the revenue decline to falling raw material prices, particularly pesticide active ingredients and fertilizers, which account for a significant portion of its direct material costs. Under a cost-plus pricing model, lower raw material costs led to reduced selling prices and declining revenue. The company warned that further price drops could continue to impact revenue.

Industry Ranking

According to the China Pesticide Industry Association's pesticide formulation sales rankings (2023–2026), Yuanhua Biochemical's position declined slightly year by year:

• 2023: 4th
• 2024: 5th
• 2025: 6th
• 2026: 8th

In response to inquiries, the company explained that the ranking change was mainly due to adjustments in the official statistical scope, which now includes three integrated active ingredient and formulation companies.

Shareholding Structure and Governance

As of the prospectus signing date, Guangxi Taihe Investment Co., Ltd. ("Taihe Investment") held 32.57% of Yuanhua Biochemical's shares, making it the controlling shareholder.

• Li Weiguo, Chairman of Taihe Investment, directly holds 5.47% of Yuanhua Biochemical and 30.74% of Taihe Investment, making him the controlling shareholder of Taihe Investment.
• Other key individuals and their shareholdings:
• Ren Hongwei (Director and GM of Taihe Investment): 1.96% of issuer, 6.71% of Taihe Investment
• Wei Zhijun (Director): 2.91% of issuer, 7.20% of Taihe Investment
• Xu Rui (Supervisor): 2.09% of issuer, 3.74% of Taihe Investment
• Linghu Yanping (Li Weiguo's sister-in-law): 0.08% of issuer

Under a "Consistent Action Agreement," Li Weiguo controls 48.39% of Taihe Investment's voting rights, enabling significant influence over its shareholder resolutions.

Regulatory Scrutiny on the Consistent Action Agreement

The SZSE questioned a potential contradiction in the agreement's validity terms:

• The agreement stated it would be valid "from the date of signing until three years after the company's listing" and "for a maximum of no more than six years."

If the company failed to list by January 1, 2027, the "three years post-listing" condition could not be met, creating a conflict with the six-year cap.

In response, Yuanhua Biochemical noted that on March 20, 2026, the parties issued a commitment letter to ensure the agreement would be renewed if necessary to maintain consistent action for at least three years post-listing. On July 22, 2026, the parties signed a supplementary agreement removing the "maximum six years" clause and adjusting the validity to "until three years after the company's listing," with a renewal negotiation clause one month before expiration.

Reported by Ji Simin, The Paper