Xi'an tourism's 300 million yuan private placement approved for acceptance

（Source: Economic Information Daily）

Xi’an Tourism (000610.SZ), which is facing delisting risk warning (*ST) pressure, is set to receive an emergency directed “life-saving” injection from its controlling shareholder. The company recently announced that the Shenzhen Stock Exchange has accepted its application for a share issuance to specific parties. It plans to raise funds of no more than RMB 300 million, all of which will be used to replenish working capital and repay bank loans. The controlling shareholder, Xi’an Tourism Group Co., Ltd. (abbreviated as “Xi’an Tourism Group”), will fully subscribe in cash. This “capital infusion” will provide key support for this long-established listed travel enterprise to ease financial pressure and seize opportunities arising from the industry’s recovery.

3 billion yuan from the controlling shareholder to help resolve distress

According to disclosures in the offering memorandum (draft for filing), the issuance price has been set at RMB 9.80 per share, not lower than 80% of the company’s stock average price over the 20 trading days prior to the pricing benchmark date, and not lower than the per-share net asset value attributable to ordinary shareholders of the parent company as audited for the latest period before the issuance; the number of shares to be issued will be no more than 30.61 million shares, representing 12.93% of the company’s total share capital before the issuance, and not exceeding 30% of the total share capital; the total amount of funds to be raised will be no more than RMB 30,000.00 million.

As the sole issuance target, Xi’an Tourism Group plans to subscribe in full for the shares to be issued in cash. After the completion of this issuance, Xi’an Tourism Group will still remain the company’s controlling shareholder; the company’s actual controller will still be the Xi’an Qujiang New District Administrative Committee, meaning control will remain stable and it will not affect the company’s listing status.

It is worth noting that before the issuance, Xi’an Tourism Group already holds 26.57% of Xi’an Tourism’s shares. After the issuance is completed, its shareholding ratio will exceed 30%, triggering the tender offer obligation under the “Administrative Measures for the Takeover of Listed Companies.” However, Xi’an Tourism Group has made a commitment that the shares it subscribes to “will not be transferred within 36 months from the date the issuance is concluded,” and this matter has already been deliberated and approved by the company’s temporary shareholders’ meeting among non-related shareholders, which complies with the circumstances under the aforementioned measures where a tender offer can be exempted. The announcement also shows that, as of now, Xi’an Tourism Group has cumulatively pledged 31.3882 million shares of the company’s equity, accounting for 49.90% of its shares and 13.26% of the company’s total share capital.

The explicit use of the funds has led the market to interpret this rights issue as the controlling shareholder stepping in to help resolve distress. Financial data show that as of September 30, 2025, Xi’an Tourism’s asset-liability ratio was 93.55%, and the current ratio was only 0.59, facing substantial repayment pressure and liquidity risk. This situation is mainly attributable to the company’s net cash flows from operating activities being continuously negative from 2022 to 2024, with its scale of net assets shrinking steadily. The announcement clarifies that the net proceeds from this fund-raising will be fully used to replenish working capital and repay bank loans; this will further optimize the company’s capital structure, improve its financial condition, ease funding pressure, and enhance the company’s liquidity and resilience to risks.

Multiple risks piling on; a long-established listed travel enterprise faces a critical test

At the time this rights issue is launched, it is at a pivotal juncture where the cultural and tourism (Wenlv) sector is fully recovering and Xi’an Tourism’s own operating pressure coexist. From the perspective of the industry environment, there are dual positives: policy dividends and market demand. Policies related to Wenlv—such as the “Several Measures on Further Fostering New Growth Drivers and Promoting the Prosperity of Culture and Tourism Consumption,” issued in 2025—continue to gain momentum; combined with the continued release of the effects of facilitation measures for the entry of foreign personnel, opportunities are being created for the development of the Wenlv industry. Data from the Ministry of Culture and Tourism show that in the first three quarters of 2025, domestic trips reached 4.998 billion person-trips, up 18.00% year over year; total domestic resident spending on trips was RMB 4.85 trillion, up 11.50% year over year, with both core indicators maintaining double-digit growth.

From the perspective of regional markets, as a popular Wenlv destination city and an ancient capital, Xi’an received 306 million visitors in 2024, generating total tourism revenue of RMB 376.0 billion, with year-over-year growth of 10.3% and 12.3%, respectively. In the first three quarters of 2025, year-over-year growth in Xi’an’s visitor volume and tourism revenue further expanded to 15.2% and 18.7%; the number of inbound visitors received and total spending increased by 75.61% and 79.04% year over year, respectively. The market scale has continued to grow.

As one of four listed Wenlv-sector companies in Shaanxi Province, Xi’an Tourism’s brand resources are not inferior. The product lineup of its “Xi’an Tourism Wan’ao” hotel brand covers 12 cities across 6 provinces nationwide, and has 66 hotels and homestays (including those already signed but pending opening); the travel agency segment has “Xi’an China Travel,” “Xi’an Overseas,” and other top ten travel agencies in Shaanxi Province. In 2024, it received 33,000 inbound visitors, ranking among the top in the province.

However, the ongoing loss-making operating situation makes it difficult for Xi’an Tourism to fully capture the dividends brought by the industry’s recovery. According to financial reports, from 2022 to 2024, the net profit attributable to the parent company was -RMB 167 million, -RMB 154 million, and -RMB 260 million, respectively. The shareholders’ equity attributable to the parent company at the end of each period was RMB 651 million, RMB 497 million, and RMB 237 million, respectively, showing a continuous downward trend. According to the company’s 2025 annual performance forecast, it expects full-year net profit attributable to the parent company of between -RMB 290 million and -RMB 237 million. If losses continue, it may result in net assets attributable to shareholders of the parent company being negative by the end of 2025, which could in turn lead the company’s stock to be placed under delisting risk warning by the Shenzhen Stock Exchange.

For Xi’an Tourism, the fund-raising from this rights issue is both “lifesaving money” to resolve short-term financial risks and “development money” to empower upgrades of its main business. The company states that the injection of rights-issue funds will provide solid support for the company to seize strategic opportunities in the Wenlv industry. However, “capital infusion” cannot ultimately replace “self-generated cash flow.” How to turn around the loss situation and realize the dividends from the industry’s recovery by leveraging this rights-issue opportunity will be the key test for the future development of this long-established listed travel enterprise.

What investors should pay attention to is that this rights issue may dilute shareholders’ immediate returns. In addition, this issuance still needs to pass the Shenzhen Stock Exchange’s review and obtain approval for registration from the China Securities Regulatory Commission. Whether it can ultimately pass the review, and when the decision to approve registration will be made, still remains uncertain.

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