Analysis of Liqin Resources' Controlling Shareholder's Share Transfer to 'Ex-Wife' Pre-IPO and Nickel Product Trading Gross Profit Margin

Based on collected information, this report provides a detailed analysis of Liqin Resources’ controlling shareholder’s share transfer to his ‘ex-wife’ prior to the A-share IPO and the gross profit margin of its nickel product trading business.

Time Node	Event	Key Information
December 2022	Listed on Hong Kong Stock Exchange	Cai Jianyong and Xie Wen were jointly identified as controlling shareholders
September 2024	Interim Report Disclosure	The two were still married, and Xie Wen was identified as ‘Mr. Cai Jianyong’s spouse’
July 1, 2024	Signed Share Transfer Agreement	Cai Jianyong and Xie Wen signed a share transfer agreement
August 26, 2024	First Share Transfer	Cai Jianyong transferred 4.02% of shares (62,506,900 shares) to Xie Wen at a price of RMB 0.00001 per share
September 27, 2024	Second Share Transfer	Cai Jianyong transferred 4% of shares (62,237,300 shares) to Xie Wen at a price of RMB 0.00001 per share

: While the company still disclosed that the two were married in its September 2024 interim report, Xie Wen was listed as the ‘ex-wife’ when applying for the A-share IPO, making the timing highly sensitive [1][2].

• Cai Jianyong held approximately 26.78% of shares directly
• Xie Wen held approximately 1.98% of shares
• The two were jointly identified as controlling shareholders

• Cai Jianyong held 18.77% of shares directly, and indirectly controlled 32.65% of voting rights through Liqin Investment and Ningbo Lizhan, with a total control of 51.42% [1]
• Xie Wen held 9.77% of shares directly and was no longer identified as a joint controlling shareholder

Shareholder Identity	Share Lock-up Period	Share Reduction Time Restrictions
Controlling Shareholder (Cai Jianyong)	36 months after listing	Long lock-up period, share reduction restricted
Shareholder with >5% Shares (Xie Wen)	12 months after listing	Eligible for early share reduction, treated as an ordinary financial investor

1. Suspicious Timing
   : Suddenly divorced and transferred shares on the eve of A-share IPO application, with highly precise timing
2. Abnormal Transfer Price
   : Transferred shares at an almost zero cost of RMB 0.00001 per share, involving a huge number of shares but extremely low consideration
3. Abrupt Identity Change
   : Still listed as a married couple in the September 2024 interim report, but Xie Wen became the ‘ex-wife’ in a short time
4. Obvious Profit Motive
   : Xie Wen’s share lock-up period was shortened from 36 months to 12 months, gaining early eligibility for share reduction

The market generally questions this as a

, which uses changes in marital status to evade regulatory restrictions on share reductions by controlling shareholders [1][2].

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Business Segment	Gross Profit Margin in H1 2024	Gross Profit Margin in H1 2025	Industry Average
Nickel Product Trading	4.5%	4.3%	Approx. 2-3%
Nickel-Cobalt Compound Production	39.7%	39.7%	Approx. 25-30%
Ferronickel Production	Low	15.1%	Approx. 8-10%
Integrated Hydrometallurgical Products	Approx. 30%	Approx. 33%	Approx. 25%

: According to research data from Minsheng Securities, the gross profit margin of nickel product trading has dropped from 9.6% in 2020 to 4.3% in H1 2025 [3].

• Liqin Resources is the largest nickel ore trader in China, with a 28% market share in China and 10.4% globally [1]
• Starting from nickel product trading, it gradually extended to the downstream of the industrial chain, achieving an integrated ‘trading + production’ layout

• Established long-term cooperative relationships with Indonesian partners, and jointly developed the Obi Island nickel smelting project in 2018
• Signed a 20-year supply agreement framework in June 2022 to ensure the stability of nickel ore supply
• Short transportation distance brings raw material cost advantages

• Controls upstream nickel ore procurement channels, with strong pricing power
• Large-scale procurement reduces unit costs
• Synergy between trading and production businesses mitigates the impact of price fluctuations

• The proportion of nickel product trading in total revenue dropped from approximately 70% in the early stage to approximately 42% in H1 2025
• The increased proportion of high-margin production businesses drives up the overall gross profit margin
• The increased proportion of ferronickel trading has a certain downward impact on the trading gross profit margin

Company	Business Characteristics	Gross Profit Margin of Nickel Business
Liqin Resources	Integrated Trading + Production	Trading: Approx. 4-5%, Production: Approx. 33-40%
Huayou Cobalt	Complete Cobalt-Nickel Industrial Chain	Approx. 25-30%
GEM	Recycling + Production	Approx. 20-25%
CNGR Advanced Materials	Mainly engaged in ternary precursors	Approx. 15-20%

Relying on its

and , Liqin Resources’ nickel product trading gross profit margin is higher than the industry average (approx. 2-3% for the industry), but its absolute level is still much lower than that of self-produced products (approx. 33-40%) [3].

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Risk Dimension	Assessment
Compliance Risk	High; if identified as evading new share reduction regulations, the company may face regulatory inquiries or penalties
Reputational Risk	High market attention, which may affect the IPO review process
Interests of Minority Shareholders	The controlling shareholder obtained an early share reduction channel through divorce + share transfer, which has suspicion of interest transfer

1. Over-reliance on Indonesia
   : Raw materials are mainly sourced from Indonesia, facing policy risks (export bans, tariffs, etc.)
2. Cyclical Fluctuations in Nickel Prices
   : Nickel prices are at the bottom of the cycle, leading to profit volatility risks
3. Capacity Release
   : The third phase of HPAL has reached full production, and the second phase of RKEF is about to be put into operation; the pace of capacity release will affect performance

• Short-term
  : Pay attention to the exchange’s inquiries regarding the controlling shareholder’s share transfer event
• Medium-to-long-term
  : As a global leader in nickel product trading, the company has obvious industrial chain integration advantages, but it is necessary to continuously track nickel price trends and capacity release progress

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[1] Blue Whale Finance - “Nickel Giant Liqin Resources Makes a Push for A-Share IPO: Over-reliance on Indonesia to Be Addressed, Controlling Shareholder’s Share Transfer Sparks Controversy” (https://news.futunn.com/post/66998010/nickel-giant-liqin-resources-makes-a-push-for-a-share)

[2] Feikan Finance - “Genuine Divorce or Paving the Way for Share Reduction? On the Eve of IPO Application, Liqin Resources’ Controlling Shareholder Transferred Shares to ‘Ex-Wife’ Twice” (https://www.itiger.com/news/2600023015)

[3] Minsheng Securities - Research Report “Nickel-Cobalt Resonance, Promising Growth” (https://testtoo1.oss-cn-hangzhou.aliyuncs.com/eastmoney_pdf/AP202509201747327544.pdf)