Several mainland China listed companies have disclosed plans to transfer subsidiary equity for 1 yuan or no less than 1 yuan this year. Among them, one film and television company that was acquired for 605 million yuan is now facing a debt exceeding assets by over 100 million yuan, with a listing starting price of only 1 yuan.
According to Red Star News on August 14th, the film and game company Dasheng Culture intends to set a listing base price of 1 yuan to transfer all equity of China United Transmission Culture Communication Co., Ltd.
China United Transmission was involved in the production of the “Tiny Times” film series. In 2015, Dasheng Culture acquired it for 605 million yuan. At that time, the seller had promised consecutive profits for four years, but China United Transmission only met the commitment in the first year, and then experienced losses for the following three years.
In 2018, due to the deteriorating performance of China United Transmission, Dasheng Culture provisioned goodwill impairment of 477 million yuan for this acquisition. As of the end of June this year, China United Transmission’s assets were only 21.22 million yuan while liabilities reached 139 million yuan, with liabilities exceeding assets by 118 million yuan, and no operating revenue in the first half of the year.
According to Securities Times, over a dozen listed companies have disclosed similar transactions this year. The transferred companies involve industries such as retail, environmental protection, construction engineering, and film and television, with most continuously facing losses or debts surpassing their assets.
The 1 yuan price is only for the equity transfer and does not represent the company’s total assets as being worth only 1 yuan. The buyers often take over companies that have debts exceeding their assets; after the full transfer of equity, the subsequent losses of the subsidiary are usually no longer included in the listed company’s accounts.
On August 11th, engineering contractor Zhongcheng Company announced its intention to transfer a Malaysian subsidiary for no less than 1 yuan. As of the end of July this year, the subsidiary had assets of about 155 million yuan, with liabilities amounting to 258 million yuan, a difference exceeding 100 million yuan.
Many of the listed companies engaging in such low-price transfers themselves face operational pressures. Some companies experienced losses or significant declines in performance in 2025, with ST Yigou, Dasheng Culture, and Huayang New Materials all having asset-liability ratios exceeding 90% by the end of 2025.
Huayang New Materials, a new materials company, transferred a wholly-owned subsidiary to its controlling shareholder for 1 yuan in July this year. The subsidiary had previously invested around 570 million yuan in a biodegradable plastic project, but only generated 10.1976 million yuan in revenue in 2025, with a loss of 96.2321 million yuan; the year-end assets were about 355 million yuan, and liabilities about 459 million yuan.
After the transfer, an engineering contractor sued Huayang New Materials, the controlling shareholder, and the subsidiary for 15.1964 million yuan in unpaid project funds. The plaintiff claims that the 1 yuan equity transfer is an attempt to evade debts, and requests the court to revoke the transaction and return the equity to Huayang New Materials. The case has not yet been heard.
Xing Yicai, Research Director of Shenzhen Zirui Xing Investment Co., told Securities Times that if losses and debts are simply transferred to related companies, risks still exist. Wang Lijiang, a lawyer at Beijing Jingping Law Firm, stated that if the low-price transfer is to evade debts, even if the industrial and commercial changes are completed, the original shareholders may not necessarily be exempt from liability.