Henan Lantian Gas Co Ltd

Lantian Gas released its 2026 interim report, with total operating revenue of 2.175 billion yuan, down 3.49% year-on-year; net profit attributable to the parent company was 159 million yuan, down 22.35% year-on-year. Net cash inflow from operating activities was 197 million yuan, the asset-liability ratio was 40.56%, and the gross margin was 15.92%, a decrease of 1.69 percentage points from the same period last year. Diluted earnings per share were 0.22 yuan, down 24.14% year-on-year. The number of shareholders was 35,300, and the top ten shareholders held 65.52% of the total share capital.

Blue Sky Gas shareholders approved a proposal to lower the conversion price of the Blue Sky convertible bond, reducing it from 7.98 yuan to 6.72 yuan, a cut of about 15.8 percent. As of June 30, 2026, 672 million yuan of the Blue Sky convertible bond remains unconverted. If fully converted, the company's share capital would increase by 13.98 percent, and earnings per share would fall by 12.27 percent. At the board meeting, director Fan Xiaohua voted against the move, citing dilution of existing shareholders' earnings per share from the conversion. At the shareholder vote, over 91 percent of minority shareholders holding less than 5 percent of shares opposed the resolution. However, because their combined holdings are far smaller than those of the major shareholder, the proposal still passed with more than 90 percent approval. Blue Sky Gas's major shareholder is Blue Sky Group. The actual controller, Li Xinhua, and parties acting in concert hold a combined 51.38 percent stake. The company paid cumulative dividends of 2.47 billion yuan from 2020 to 2025, of which over 1.3 billion yuan went to the major shareholder. The major shareholder also achieved short-term arbitrage through convertible bond subscriptions, pledges, and reductions, with returns potentially exceeding 30 percent within a few months. Blue Sky Gas's share price is currently below its IPO price, leaving most public shareholders with paper losses. If the convertible bond conversion is factored in, the share price will face further pressure.

The board of Blue Sky Gas has decided to exercise the right to downwardly adjust the conversion price of the Blue Sky Convertible Bond and will propose the downward revision to the shareholders' meeting. However, director Fan Xiaohua cast a dissenting vote, citing that the downward revision would dilute existing shareholders' earnings per share. The company's stock price had been below 85% of the current conversion price of 7.98 yuan for fifteen trading days between June 18 and July 9, triggering the downward revision clause. As of the close on July 9, the stock price was 6.36 yuan, down 17.62% year to date. From October 2025 to June 2026, no conversions occurred for three consecutive quarters. As of the end of June 2026, 672 million yuan of the Blue Sky Convertible Bond remained unconverted, accounting for 77.19% of the total issuance.