ST Baolong (600988) announced on September 27 that due to the complexity of the planned reorganization party's plan to inject assets into the listed company, the major assets reorganization cannot complete all tasks within the specified time. Wu Peiqing, the controlling shareholder and actual controller, decided to suspend the planning of major asset reorganization and promised to no longer plan major assets reorganization within at least three months. At this point, the round of reorganization that began on September 5 has come to an end.

ST Baolong intends to reorganize Huadong Nonferrous Metals Co., Ltd., a subsidiary of the East China Nonferrous Metals Geological Exploration Bureau, and plans to inject assets into Fujian Jindong Mining Co., Ltd., a subsidiary of East China Nonferrous Metals. Jindong's main business is lead-zinc mining, with an average annual processing capacity of 300,000 tons. ST Baolong will adopt a directional private placement to absorb the merger of Jindong Corporation, which will be written off as a legal person, and ST Baolong will inherit all the business, assets and liabilities of Jindong. After the transaction is completed, the company's main business will make corresponding changes, from the production of special vehicles to mining lead and zinc mining operations.

ST Baolong achieved revenue of RMB 22 million from January to June 2011, a year-on-year decrease of 26.67%; net profit attributable to shareholders of listed companies was RMB 0.012 billion, an increase of 62.71% year-on-year; basic EPS was RMB 0.0119. In the company's segmented business, the revenue from the main dedicated automotive business decreased by 34.72% compared with the same period of last year, and the product competitiveness, market position, and corporate profitability gradually declined. Daxin Certified Public Accountants issued the 2010 "non-standard audit report" that the majority of Oriental Brothers' operating assets were sealed up by the court and that the company's ability to continue operations was subject to significant uncertainty. ST Baolong's non-restructuring is not sufficient.

The company had announced on May 25, 2011 that it would invest 20 million yuan in cash and established a wholly-owned subsidiary, East Brothers Battery Co., Ltd. in Linyi, Shandong Province. This subsidiary mainly specializes in the research, development, sales and technology transfer of new types of power and zinc batteries, nickel-metal hydride batteries, aluminum sulfate batteries, and other types of batteries, battery materials, accessories and equipment, and provides services to system integrators and automotive manufacturers. Yuchun's complete battery equipment business and high-tech project development, investment and investment in high-tech companies. ST Baolong set up the company, did not specify the business model, funding sources, plant and production equipment and other fixed assets arrangements, technology sources, procurement and sales channels, environmental assessment and construction cycle and other related matters, the company has a larger management Risks, operational risks, and technical and talent risks. Liu Deliang, an independent director of the company, voted against the proposal to establish the company on the grounds that “the feasibility report failed to provide sufficient data to demonstrate the factors of successful investment”.

The establishment of this subsidiary is quite intriguing. ST Baolong’s “surprise” establishment of a subsidiary company in the event that many necessary conditions are not met may be aimed at building a “beneficial” for the company by building a power battery project that meets the national industrial incentive policy, especially the concept of new energy. “To attract secondary market funds, increase stock prices, and increase market value; secondly, create conditions for subsequent valuation valuation of restructured assets, inflate corporate “assets”, increase bargaining power and bargaining power for companies; of course, attach new models. New energy projects such as power and zinc-air batteries form a relationship with upstream and downstream industry chains for mineral selection and production to be restructured, which also facilitates the smooth implementation of the reorganization and approval process. This can be understood as the pre-determination of ST Baolong’s efforts to achieve reorganization. .

In summary, the suspension of the reorganization process does not mean the end of the reorganization of ST Baolong. The company’s main business is shrinking and its profitability is declining. The “shell” held by the company is a scarce resource in Shanghai and Shenzhen, and it is also the last straw for the company’s related investors. Perhaps it is in order to make full use of this “shell” resource that the company did not seem to be logical after successively performing such activities as capital increase, setting up a subsidiary, etc., but it is actually closely related to capital operation. Only when the reorganization parties uphold the principle of fairness, fairness and openness, increase the transparency of information in the reorganization process and fully consider the interests of small and medium investors, can a win-win situation be achieved in the reorganization process. Reorganization is the only way for ST Baolong.