China Kangda Food Faces Major Shareholder Change and Loan Extension Amid Disclaimer of Opinion

Key Points Investors Must Know

• Major Shareholder Transaction: The controlling shareholder of China Kangda Food Company Limited has agreed to sell 54.69% of the company’s issued shares to Hong Kong Sheng Yuan Holding Co., Limited. This transaction will result in Mr. Gao Sishi, the sole owner of the Purchaser, becoming the new controlling shareholder.
• Related Party Loans Status: There are two significant related party loans totaling RMB38,993,000. The main loan of RMB36,670,000 is with Hong Kong High Quality Limited, and a second loan of RMB2,323,000 is from another related party. Both loans matured on 22 April 2025 and are now due.
• Implications of Shareholder Change: Upon completion of the share sale, Mr. Gao will control both the company and the entities providing the related party loans, transforming these debts into shareholder loans.
• No Immediate Legal Action: Despite the loans being due, Mr. Gao and the related entities have confirmed they will not initiate legal action or a winding up petition against the company.
• Loan Extension Expected: The parties involved intend to maintain and extend the loans after the completion of a possible unconditional mandatory cash offer for the company.
• Ongoing Communication: The company has committed to issuing further updates to keep shareholders and potential investors informed about developments regarding the related party loans.

Potentially Price-Sensitive Information

• Change of Control: The sale of a controlling stake in the company to Mr. Gao Sishi represents a fundamental shift in governance and strategic direction. Investors should closely monitor any subsequent changes in management or business strategy following the transaction.
• Disclaimer of Opinion: The company is actively implementing an action plan to address the auditor’s disclaimer of opinion. The outcome of these efforts could significantly impact investor confidence and share valuation.
• Related Party Loan Risks: The fact that a substantial amount of the company’s liabilities are related party loans, now set to become shareholder loans, reduces immediate insolvency risk but increases reliance on the intentions of the new controlling shareholder.
• Possible Mandatory Cash Offer: Investors should be aware that the completion of the share transaction may trigger a mandatory cash offer, which could affect share liquidity and pricing in the near term.

In-Depth Details for Investors

China Kangda Food Company Limited has issued its latest quarterly update following a prior supplemental announcement regarding its annual results and annual report for the year ended 31 December 2024. The company continues to address the auditor’s disclaimer of opinion, a critical issue for shareholders and prospective investors. A primary focus is on two related party loans totaling RMB38,993,000, both of which matured on 22 April 2025 and remain outstanding.

On 18 October 2025, the controlling shareholder entered into an agreement to sell 247,708,066 shares (54.69% of the issued shares) to Hong Kong Sheng Yuan Holding Co., Limited. This transfer will make Mr. Gao Sishi, the sole owner of the Purchaser and the related lending entities, the new controlling shareholder.

This change means the related party loans will be reclassified as shareholder loans, significantly altering the company’s debt profile. While the loans are overdue, the involved parties have expressed their intention not to pursue legal or winding up actions. Instead, there is a commitment to extending the loans, ensuring no immediate cash crunch or insolvency risk, which should reassure investors about the company’s short-term financial stability.

Arrangements for the extension of these loans are expected after the completion of a possible unconditional mandatory cash offer. The company has pledged to keep stakeholders informed about any further developments, particularly regarding the status of the loans and any other material changes that could arise from the change of control.

For shareholders, this update contains potentially price-sensitive information. The transition to a new controlling shareholder, the transformation of related party loans into shareholder loans, and the possibility of a mandatory cash offer all have the potential to impact the market’s perception of risk, governance, and future strategy for China Kangda Food.

The Board currently consists of executive directors Ms. Lang Ying, Mr. Gao Yanxu, and Mr. An Fengjun, with three independent non-executive directors, Mr. Hua Shi, Ms. Li Ying, and Mr. Wang Cheng. Investors should watch for any changes to board composition or company direction following the transaction.

Conclusion

The ongoing developments at China Kangda Food Company Limited—including a major change of control, the restructuring of related party loans, and the company’s response to the disclaimer of opinion—represent significant events that could materially affect share value and investor sentiment in the coming months.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. The information presented is based on publicly available company announcements as of 30 October 2025 and may be subject to change.

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