Lehui International plans to add a round of code for craft fresh beer: a cross-border leap forward and a re-concentration of risks amid pressure on the core business and being trapped in profit difficulties

Ask AI · How to balance main business and emerging business risks with fundraising through private placement?

Blue Whale News, April 3rd: On April 2nd, Ningbo Le Hui International Engineering Equipment Co., Ltd. (603076) released the “2026 Annual Private Placement Prospectus (Draft for Registration)”, proposing to raise funds through a targeted stock issuance, focusing on expanding craft beer business and upgrading equipment manufacturing capabilities, and systematically disclosing macroeconomic fluctuations, intensified market competition, declining operating performance, overseas project execution, customer concentration, gross profit margin fluctuations, accounts receivable collection, large inventory scale, raw material price fluctuations, as well as risks related to approval of this issuance, pledge of subscription funds, dilution of immediate returns, and stock price volatility in the “Major Matters Reminder”.

In March 2026, Ningbo Le Hui International Engineering Equipment Co., Ltd. disclosed the 2026 Annual Private Placement Prospectus (Draft for Registration), intending to raise funds through private placement for capacity expansion and intelligent upgrade projects of craft beer production. This private placement was solely subscribed by Ningbo Le Ying Enterprise Management Partnership (Limited Partnership), with a high overlap in investment structure and control relationship with the company’s actual controllers Lai Yunlai and Huang Yuening. Given that the company’s net profit attributable to common shareholders after deducting non-recurring gains and losses has been low for three consecutive years—2022 at 23.74 million yuan, 2023 at 25.56 million yuan, a sharp drop to 1.15 million yuan in 2024, and a rebound to 16.79 million yuan in the first three quarters of 2025—Le Hui International chose to increase its second main business, which is still in the loss cultivation period, through equity financing.

Le Hui International’s traditional main business is the manufacturing of brewing equipment, sterile filling equipment, and other process equipment, serving multinational beer groups such as AB InBev, Heineken, and Carlsberg for the long term. During the reporting period, the company’s overseas revenue accounted for between 32.68% and 53.88% of main business income, with overseas projects distributed across regions with significant political and economic differences such as Africa, Southeast Asia, Central and South America, and Europe. Although the company claims to have executed projects in over 40 countries worldwide and accumulated local resources, overseas project execution risks remain the top item in the major matters reminder. Notably, the sales proportion of the top five customers’ revenue from 2022’s 50.07% has steadily declined to 32.68% in the first three quarters of 2025. While customer concentration has eased somewhat, the dependency on large clients has not fundamentally changed. Under the circumstances of overall industry slowdown and international beer giants adopting more cautious capital expenditure, growth momentum in equipment manufacturing as the main business is under pressure.

The craft beer segment is currently operated by several subsidiaries including Ningbo Fresh Beer Thirty Kilometers Technology Co., Ltd., with products positioned as “craft fresh beer,” emphasizing features such as unpasteurized, containing active yeast, and distinctive flavor. However, this segment has not yet formed a stable profit model. The prospectus clearly states that during the reporting period, the craft beer business is “still in the brand cultivation and rapid market expansion stage, with significant initial investments and no full profitability achieved yet.” In 2024, net profit after non-recurring gains and losses was only 1.15 million yuan, a 95.51% decrease from 2023. The funds raised in this private placement are mainly allocated to the construction of craft beer production bases, intelligent filling lines, and cold chain distribution systems. As of the end of September 2025, the company’s inventory book value reached 1.34B yuan, accounting for 48.18% of current assets, with a significant portion related to ongoing projects, semi-finished products, and unsold craft beer inventory in the craft brewing business.

The sources of funds for the subscription party Ningbo Le Ying in this private placement include bank loans and equity pledge financing. The prospectus admits that “if in the future the company’s stock price experiences a significant decline and the actual controllers and their concerted parties fail to make timely adjustments, or if relevant entities face financial difficulties and cannot repay the pledged equity and related interest on time, the pledged shares may face disposal risk.” As of the end of the reporting period, although there were no pledge records of controlling shareholders and actual controllers’ shares, this risk exposure has been substantially embedded in this issuance plan.

The company’s main business gross profit margin fluctuates between 22.83% and 25.20%, with high dependence on external variables such as raw material prices, exchange rates, and shipping costs. Steel, as a core raw material, has shown significant volatility since the second half of 2020, and the company has not disclosed effective hedging or cost transfer mechanisms in the prospectus. Regarding accounts receivable, as of the end of September 2025, the balance was 442 million yuan, with a considerable proportion being acceptance payments and warranty deposits from overseas customers. Affected by international trade disputes and foreign exchange controls, the collection cycle has lengthened, and the risk of bad debts has increased.

The craft beer market penetration rate is only 3%, far below the level of mature markets, and competition is intensifying rapidly. Leading companies such as Zhujiang Beer, China Resources Beer, and Tsingtao Beer have all launched craft sub-brands, quickly capturing market share through channels, capital, and supply chain advantages. As an equipment supplier entering the field, Le Hui International lacks first-mover advantages in brand recognition, terminal coverage, and consumer education. Although its “cutebrew distributed lightweight equipment” has technological highlights, there is no data to support whether it can translate into sustained terminal sales and market share.