Finance Talk | Yiyaton's Excess Guarantee Hidden Dangers, Loose Provisioning of Bad Debts to Cover Up Profits

Interface News Reporter | Yuan Yingqi

As the “Number One Supply Chain Stock in A-shares,” YiYatong (002183.SZ) has been on a transformation path in recent years. Interface News has discovered that behind this company’s transformation, abnormal signals in financial data are becoming increasingly evident. On one side, hundreds of millions of yuan in funds sit idle on the books; on the other, short-term loans are high, and cash flows from financing are continuously net outflows; meanwhile, the parent company has provided over 100 billion yuan to subsidiaries, yet the company’s bad debt provisions are far below industry peers. By the third quarter of 2025, the company’s net profit minus non-recurring gains and losses has turned from profit to loss, with a loss of 21.0651 million yuan.

What is the true operating nature of this supply chain giant? What signals are hidden behind the “dual high” of deposits and loans?

The “Dual High” Fund Puzzle

In the supply chain management industry, efficient capital turnover is vital for survival. However, YiYatong’s recent financial reports depict a paradoxical picture: its cash on hand has consistently remained at hundreds of billions of yuan, while short-term debt continues to rise, forming a typical “dual high” dilemma.

Financial data shows that by the end of 2024, YiYatong’s cash on hand reached 13.266 billion yuan, while short-term loans increased to 22.624 billion yuan. Entering 2025, this abnormal structure has not improved: the third quarter report shows the company had 10.988 billion yuan in cash, with interest-bearing liabilities (short-term loans plus non-current liabilities due within one year) reaching 17.919 billion yuan. More concerning is that in 2024, interest expenses exceeded 1.1 billion yuan, which sharply contradicts the “idle” funds—if the funds were truly available, the company could have used some to repay high-interest debt to optimize its financial structure.

Compared with industry peers such as Xiamen Xiangyu and Wuchan Zhongda, YiYatong’s interest rate spread between deposits and loans has widened abnormally. Industry insiders reveal that typically, supply chain companies need to maintain certain liquidity but manage funds centrally to minimize financial costs. YiYatong, however, shows a divergence of fund sedimentation and rising debt. Wind industry data indicates that in 2024, Xiamen Xiangyu’s cash/short-term liabilities ratio was 0.77; Wuchan Zhongda’s was 1.07. The industry average for trade companies was about 0.8. YiYatong’s ratio was only 0.59, below the industry median.

The answer lies in the notes to YiYatong’s financial statements. The 2025 semi-annual report shows that out of 10.337 billion yuan in cash, 7.2 billion yuan (70%) is restricted, mainly used for bill deposits and pledge loans. This means the actual freely available funds are only about 3.1 billion yuan, far insufficient to cover short-term debts. This “paper wealth” phenomenon signals liquidity risk.

If the “dual high” of deposits and loans is merely an abnormal static indicator, then YiYatong’s cash flow dynamics reveal a deeper crisis. Analyzing the cash flow statements of the past three years shows that YiYatong exhibits a cash flow pattern opposite to traditional companies: operating and investing activities show continuous net inflows, while financing activities show large-scale net outflows.

Reviewing YiYatong’s cash flow from 2017 to now, the company has a total net inflow of 9.584 billion yuan from operating activities, 678 million yuan from investing activities, and a cumulative net outflow of 10.931 billion yuan from financing activities, mainly used for debt repayment. In earlier years, the company had large operational cash inflows and significant net outflows from financing; in recent years, as the scale shrank, operational cash flow decreased, and financing outflows also reduced.

Breaking down the financing details reveals the truth more clearly: in the third quarter of 2025, YiYatong received 21.733 billion yuan in cash from borrowings, but repaid 26.657 billion yuan. Key indicator calculations show that its short-term debt rollover coverage ratio (net operating cash flow / interest-bearing debt) is even less than 0.1, far below the safety threshold. YiYatong’s business model is debt-driven; even with “operating + investing” inflows, funds are still insufficient to cover debt needs, relying on “new borrowing to repay old” to maintain liquidity.

CPA Xu Peiling told Interface News, “For asset-heavy or high-turnover industries, continuous net outflows from financing are not necessarily abnormal, provided that operating cash flow can support investment returns and debt repayment. The problem with YiYatong is that its cash-generating capacity is far from enough to cover the massive ‘blood loss’ from debt, and this structural imbalance is the root cause of the liquidity crisis.”

Overcollateralization Hidden Risks

YiYatong’s funding difficulties are not limited to internal “bleeding”; guarantee risks are like a ticking time bomb ready to explode.

Interface News found that as of January 2026, YiYatong’s external guarantee balance reached 14.585 billion yuan, while the net assets attributable to shareholders were about 10.549 billion yuan—meaning the total guarantee amount exceeds 138% of net assets.

More alarmingly, this is not a static risk figure. As of January 2026, guarantees for YiYatong and its controlling subsidiaries amounted to 34.201 billion yuan, with a contracted guarantee amount of 22.576 billion yuan, accounting for 244.47% of the latest audited net assets; guarantees for outside companies within the scope of consolidation totaled 5.25 billion yuan, with actual guarantees of 1.43 billion yuan, and contracted guarantees of 2.2 billion yuan, accounting for 23.83% of net assets. This indicates that a large amount of guarantee capacity remains unused, and total guarantees could further increase, expanding risk exposure.

The core hidden danger of guarantee risk lies not only in its scale but also in the poor creditworthiness of the guaranteed entities, which are generally high-debt, high-risk. Interface News found that in recent years, YiYatong’s guarantees mainly involved subsidiaries and related parties, whose debt-to-asset ratios generally far exceed the 70% risk warning line, with some even insolvent. For example, one guaranteed entity, Yitong New Materials Co., Ltd., has a debt ratio of 96.71%; another, Shenzhen Shangfutong Network Technology Co., Ltd., has a debt ratio of 100.97%, already insolvent. Moreover, between July and September 2025, YiYatong issued risk alerts due to guarantee objects’ debt ratios exceeding 70%.

Industry analyst Li Liping told Interface News, “Supply chain companies tend to have relatively high debt levels. If the guaranteed entities’ debt ratios exceed 70%, their repayment capacity is significantly reduced, and default risks increase sharply. In extreme cases, even partial defaults among guarantee objects could impact YiYatong’s net assets.”

More strangely, Interface News found that in the 2025 third-quarter report and recent balance sheets’ ‘estimated liabilities’ section, YiYatong has not made any provisions for these high-risk guarantees. According to the “Accounting Standard for Business Enterprises No. 13—Contingencies,” when a guarantee is likely to cause an outflow of economic benefits and the amount can be reliably measured, the enterprise should recognize a contingent liability to reflect potential liabilities.

A senior auditor told Interface News, “Failing to recognize provisions for high-risk guarantees either means the company believes the default risk is low and does not need provisions, or it underestimates potential risks by not recognizing provisions, thereby inflating current profits. This approach violates the principle of prudence and conceals the true risk situation from the market.”

Parent Company’s Hundred Billion Intercompany Loans and Loose Bad Debt Provisions Masking Profit

If the “dual high” deposits and loans and overcollateralization are external risks, then the nearly hundred billion yuan of intercompany funds reveal deeper internal management issues—namely, the parent company continuously injecting large sums into subsidiaries, which may have lost independent financing ability, and the company’s lax bad debt provisions, possibly underestimating risks to artificially inflate consolidated profits.

The 2025 third-quarter report shows that “other receivables” on the parent company’s balance sheet reached 13.357 billion yuan, while in the consolidated report, this item plummeted to 3.534 billion yuan, a difference of 9.823 billion yuan.

Xu Peiling explained to Interface News, “The core reason for this difference is that the parent company has provided large-scale, ongoing non-operating loans to subsidiaries, creating huge internal receivables. These loans, after offsetting, are not reflected in the consolidated ‘other receivables.’”

This raises the question: Have many of YiYatong’s subsidiaries lost their independent financing capacity, becoming “bleeding points” that rely on continuous parent company funding to survive?

Given the high debt levels of the guaranteed subsidiaries, the answer is likely yes. Those with debt ratios exceeding 90%, or even insolvent, obviously cannot generate enough funds through their own operations nor obtain external financing, and can only rely on parent loans to stay afloat. The parent company’s ongoing capital injections not only increase its own liquidity pressure but also severely restrict its cash flow, further amplifying the company’s overall liquidity risk.

According to Wind data, YiYatong’s transactions with related parties amounted to 10.855 billion yuan in 2024 (including procurement and sales to related parties), rising to 11.605 billion yuan in 2025.

More critically, amid the large intercompany fund transfers and receivables, YiYatong’s bad debt provisions are unusually lax, significantly lower than those of leading industry peers.

YiYatong’s accounts receivable are provisioned using two methods: “individual item provisioning” and “portfolio provisioning,” with about 95% using the latter, which is the main method. “Portfolio provisioning” employs an aging migration model, adjusting based on historical default rates and forward-looking factors, with specific standards: within 1 year at 1%, 1-2 years at 5%, 2-3 years at 15%.

Interface News compared this with industry leaders and found that their bad debt provisions are much stricter. For example, Xiamen Xiangyu divides aging more finely, with provisions of 1% for receivables within 3 months, 2% for 4-6 months, 5% for 7-12 months, 10% for 1-2 years, 30% for 2-3 years, and 100% for over 3 years. Wuchan Zhongda’s standards are similarly strict, with provisions of 0.8% within 1 year, 30% for 1-2 years, 80% for 2-3 years, and 100% beyond 3 years.

Besides the difference in “portfolio provisioning” ratios, the “individual item provisioning” also varies significantly. For receivables that have shown signs of uncollectibility, YiYatong’s provisioning rate is about 50%, whereas Xiamen Xiangyu provisions at 80%.

An auditor told Interface News, “Receivables in the supply chain industry tend to be large and turnover is fast. The risk of receivables over a year old is already significant, especially for related-party receivables, where risks are more easily hidden due to the relationship. Therefore, stricter bad debt provisions are necessary to prevent risks. YiYatong, under the background of hundreds of billions of yuan in funds transferred to subsidiaries and high debt levels, still adopts much lower provisioning standards than industry leaders, which clearly does not conform to the principle of prudence. This approach essentially underestimates bad debt risks, reduces provisions, and artificially inflates consolidated profits.”