Restructuring approved, delisting risk remains, Nanjing Chemical Fiber's path to preserve its shell still faces a major test

Securities Star Xia Fenglin

After more than a year, Nanjing Chemical Fiber (600889.SH)’s major asset restructuring plan has finally received regulatory approval recently. According to the company announcement, the China Securities Regulatory Commission has officially approved its plan to acquire 100% equity of Nanjing Process Equipment Manufacturing Co., Ltd. (hereinafter “Nanjing Process”) through asset swap, share issuance, and cash payment, and has also approved its registration application to raise supporting funds of no more than 440 million yuan from specific investors.

Although this restructuring is viewed by the market as a key step for the company to seek a “breakthrough,” behind the announcement lies the harsh reality of its ongoing fundamental pressure. Securities Star notes that Nanjing Chemical Fiber is forecasted to report a loss in 2025, with annual revenue expected to fall below 300 million yuan, touching the red line for delisting risk warnings. Against this backdrop, whether this “restructuring to replace the cage and change the bird” can truly become a turning point for the company to escape difficulties and achieve a “phoenix rebirth” remains to be further tested by the market.

Approval of Restructuring, Transition to High-End Equipment Manufacturing

Securities Star observes that this highly watched asset restructuring dates back to 2024. On November 15 of that year, Nanjing Chemical Fiber’s board approved a plan for major asset swap, share issuance, and cash purchase of assets along with supporting fundraising, first signaling a strategic move to “divest from the old chemical fiber main business and introduce high-end equipment assets.”

Over the following year, the plan steadily advanced through key approval stages. On May 28, 2025, the Jiangsu State-owned Assets Supervision and Administration Commission officially approved the plan in principle; on January 7, 2026, the transaction successfully passed review by the Shanghai Stock Exchange; and on January 13 of the same year, Nanjing Chemical Fiber disclosed a draft (registration version), indicating the restructuring was in its final sprint.

The specific plan involves three parts: major asset swap, share issuance to purchase assets, and supporting fund raising. The core goal is to completely divest the original chemical fiber assets and fully enter the precision manufacturing field centered on rolling functional components.

According to the announcement, Nanjing Chemical Fiber plans to transfer all assets and liabilities as the outflow assets, valued at 729 million yuan; simultaneously, it will inject 100% equity of Nanjing Process, valued at 1.607 billion yuan. The difference between the assets to be injected and the assets to be divested will be made up by the listed company through share issuance and cash payment, with an issuance price of 4.57 yuan per share. Notably, as of February 25, 2026, Nanjing Chemical Fiber’s closing price was 18.17 yuan, nearly tripling the issuance price.

In addition to asset swap, Nanjing Chemical Fiber also plans to issue shares to no more than 35 specific investors to raise supporting funds, totaling no more than 440 million yuan. The amount raised will not exceed 100% of the transaction price for the share issuance to purchase assets, and the number of shares issued will not exceed 30% of the company’s total share capital. Among them, the controlling shareholder New Industry Group plans to subscribe no less than 100 million yuan.

If the transaction is completed within 2026, the performance commitment parties promise profits of 87.9461 million yuan, 88.0841 million yuan, and 88.3914 million yuan for 2026-2028, respectively.

As the target of this transaction, Nanjing Process is a leading enterprise in China’s rolling functional components field, with long-term focus on precision transmission products such as ball screw pairs and rolling guide pairs, widely used in CNC machine tools, semiconductor equipment, intelligent manufacturing, and other high-end manufacturing fields. Financial data shows that from 2022 to 2024, Nanjing Process achieved revenues of 460 million yuan, 493 million yuan, and 497 million yuan, with net profits after non-recurring gains and losses of 59.2 million yuan, 78.8 million yuan, and 78.7 million yuan, maintaining steady growth overall.

However, Nanjing Chemical Fiber also openly admits in the announcement that increasing industry competition may cause Nanjing Process’s products to gradually lose market competitiveness if it cannot sustain technological upgrades, improve product performance and service quality, reduce costs, and optimize marketing networks, which could adversely affect the company’s sustained profitability.

Ongoing Losses, Revenue “Borderline” Risks of Delisting

The initiation of this major asset restructuring by Nanjing Chemical Fiber ultimately stems from its core business being mired in difficulties. Analyzing its 2025 earnings forecast and recent financial performance reveals the pressures it faces.

Public information shows that Nanjing Chemical Fiber’s main business involves the production and sales of viscose staple fiber, Lyocell fiber, PET structural core materials, and landscape water supply. According to the company’s performance forecast disclosed on January 31, 2026, it expects to realize a net profit attributable to shareholders of -74 million to -111 million yuan for 2025, with net profit after non-recurring gains and losses of -158 million to -200 million yuan.

The company explained in the forecast that in 2025, the market price of viscose staple fiber generally fluctuated downward, with raw material wood pulp prices also declining, while costs such as sulfuric acid and caustic soda rose slightly. As a result, its wholly owned subsidiary Jiangsu Jinling Cellulose Fiber Co., Ltd.’s viscose fiber products continued to face cost-price inversion, operating at a loss, though the loss has somewhat eased.

More critically, revenue performance is bleak. The company expects total revenue for 2025 to be between 270 million and 330 million yuan; after excluding non-core and non-substantive income, this drops to 240 million to 290 million yuan, below the “safety line” of 300 million yuan.

According to the Shanghai Stock Exchange’s listing rules, if the company’s audited total profit, net profit, or non-recurring net profit for 2025 is negative, and revenue after excluding unrelated income is below 300 million yuan, its stock may face delisting risk warning. This means Nanjing Chemical Fiber is under “delisting countdown,” and restructuring may be its last straw to avoid delisting.

In fact, the company’s losses are not short-term fluctuations but a persistent operational dilemma. Its non-recurring net profit has been in continuous loss for seven years since 2018, with its core business’s ability to generate profits continuously shrinking.

Alongside poor performance, the company’s financial condition has also deteriorated, with cash flow under pressure and high debt levels, further exacerbating operational difficulties.

Looking at cash flow, the net cash from operating activities has been negative for several consecutive quarters. From 2022 to 2024 and the first three quarters of 2025, the net cash flow from operating activities was -78.02 million, -171 million, -154 million, and -139 million yuan, respectively.

On the debt side, the company’s asset-liability ratio has remained high. As of the end of Q3 2025, Nanjing Chemical Fiber’s total assets were 1.254 billion yuan, with total liabilities of 893 million yuan, and an asset-liability ratio of 71.21%.

For Nanjing Chemical Fiber, this over-a-year-long asset restructuring has bought valuable breathing room. While Nanjing Process’s quality assets bring new hope, challenges in integration and business synergy remain. How to leverage Nanjing Process’s technological and market advantages to quickly complete resource integration, fulfill performance commitments, and reverse long-term losses is an urgent issue. The effectiveness of this “restructuring to replace the cage and change the bird” ultimately depends on performance, and it will continue to be scrutinized by the market and investors.