Recently, Shanghai's school meal delivery company Lvjie has been embroiled in controversy.

The importance of food safety requires no emphasis, especially for school meals, which demand the utmost care. This is why the incident has drawn sustained public attention.

However, strangely, many questions about Lvjie remain unanswered. Even simple inquiries become complicated when it comes to this company.

For instance: Who is Lvjie's actual controller?

Normally, checking business registration systems and tracing ownership structures would quickly provide the answer.

But Lvjie's parent company, GreenExpress Foods, Limited, is registered in Hong Kong, making its ownership structure and actual controller information more complex than typical enterprises.

Nevertheless, through continuous investigation by netizens and media, the mysterious actual controller behind the company has gradually emerged: New Hope Group and its founder Liu Yonghao's family.

**01 The Mysterious Actual Controller Behind Lvjie**

Lvjie is a meal delivery company that serves over 500,000 meals daily, covering more than 500 schools in Shanghai.

The company was established on September 9, 2014, with Ge Junfeng as its legal representative.

Lvjie has only one shareholder: the Hong Kong-registered company GreenExpress Foods, Limited.

However, Lvjie has undergone ownership changes over the years. Its original individual shareholders all exited in 2015, with institutional shareholders Shanghai Beverage and Food Factory Co., Ltd. and Shanghai Yueshuang Enterprise Management Partnership (Limited Partnership) taking over in 2018.

According to Tianyan Check information, GreenExpress subsequently became involved as Lvjie's shareholder. Currently, GreenExpress is Lvjie's sole shareholder.

GreenExpress was registered and established in Hong Kong SAR on April 20, 2018. From its English name "GreenExpress Foods," this company appears to have been established almost specifically to acquire Lvjie.

Official announcements revealed another piece of information: After learning about insects in the shrimp, Lvjie's actual controller Zhang XX instructed General Manager Dong XX to uniformly claim that the removal reason was "shrimp intestine spillage with sediment," deliberately concealing the true discovery of insects.

This means Lvjie's actual controller is surnamed Zhang, while the general manager is surnamed Dong.

This is inconsistent with the currently registered general manager Ge Junfeng in the business system.

Public information trails end here.

**02 Prospectus Shows Lvjie is Indirectly Controlled by Liu Yonghao's Family**

Further information must be found in a prospectus published in early 2020 by a company called KILCOY GLOBAL FOODS, LTD. (hereinafter "Kilcoy").

Kilcoy is no small player. According to its prospectus, it's a global meal delivery enterprise with operations spanning Australia, China, and the United States.

On September 30, 2018, Kilcoy acquired a Chinese meal delivery company called SHLD for 1.176 billion yuan. SHLD is at the center of this controversy: Shanghai Lvjie Industrial Development Co., Ltd.

However, Kilcoy doesn't directly hold shares in Lvjie. There are three layers of ownership structure in between:

Hong Kong-registered GreenExpress Foods, Limited; British Virgin Islands-registered GreenExpress Foods (BVI), Ltd.; Cayman Islands-registered KGF Asia Holding, Ltd.

This complex ownership structure makes finding Lvjie's actual controller somewhat elusive.

But since Kilcoy ultimately holds 100% of Lvjie, examining Kilcoy's shareholder roster becomes much simpler.

The big player behind Kilcoy is actually quite clear: New Hope Group and its founder Liu Yonghao's family.

According to media reports, in 2013, Hosen Investment under New Hope Group led the acquisition of major Australian beef processor Kilcoy Pastoral Company.

From a livestock company to acquiring meal delivery enterprises like Lvjie, Kilcoy's industry chain has extended significantly over subsequent years, ultimately reaching the lunch boxes of Shanghai's primary and secondary school students.

**03 Liu Yonghao's Indirect Shareholding Reaches 45.44%**

As a company that once sought to list on Hong Kong stocks and now aims for US stock IPO, Kilcoy maintains high transparency.

Simple analysis reveals that New Hope and Liu Yonghao's family hold significant stakes in the company.

Kilcoy's prospectus explicitly states that Liu Yonghao indirectly holds interests in 45.44% of the company's issued shares. Hosen Capital indirectly controls 37.19% of the company's issued shares.

According to Kilcoy's latest US listing prospectus, Liu Yonghao's family still indirectly controls Kilcoy through family trusts, and indirectly controls Lvjie.

Liu Yonghao's shareholding remains at 45.44%, with his daughter Liu Chang serving as the trust's settlor and protector.

Additionally, the second-largest shareholder Hosen Capital, holding nearly 40% of Kilcoy, also maintains close ties with New Hope and Liu Yonghao.

Hosen Capital was founded by Zhang Tianli and Wang Hang.

According to introductions, Zhang Tianli led Kilcoy's acquisition, serves as the company's chairman, and orchestrated a series of mergers and acquisitions.

Wang Hang is not only Hosen Capital's founder but also serves as New Hope Group's Vice Chairman and Chairman of New Hope-initiated Xinwang Bank.

Before founding Hosen Investment, Wang Hang, as a core management team member of New Hope Group, achieved sustained growth from 5 billion to 100 billion yuan in sales, leading almost all major merger and acquisition activities.

At least from an ownership perspective, Kilcoy's backing is clear: New Hope Group and Liu Yonghao's family.

Kilcoy's indirect 100% ownership of Lvjie means that behind Lvjie stands New Hope and Liu Yonghao's family.

**04 Reasons for Lvjie's Acquisition: Strong Revenue and Profits**

As an agricultural giant, New Hope's 2013 acquisition of Australian beef processor Kilcoy is understandable.

But the leap from beef processing to meal delivery represents a significant span. While both involve food, they are fundamentally different.

Kilcoy's interest in Lvjie stemmed primarily from Lvjie's excellent operating performance: school meal delivery generates substantial profits.

In 2017, Lvjie's revenue was $84.712 million, nearly 600 million yuan, with net profit attributable to shareholders of $13.32 million, equivalent to 90 million yuan, comparable to a listed company's profitability.

In 2017 and the first nine months of 2018, Lvjie's gross margins were 24.3% and 26.9% respectively. In the acquisition year and 2019, Lvjie contributed revenues of $35.6 million and $72.2 million to Kilcoy respectively, with net profits of $3.3 million and $3.9 million respectively.

Lvjie's cash flow was also excellent. In 2017, Lvjie purchased bank wealth management products worth 157 million yuan through Shanghai Rural Commercial Bank. In 2018, it purchased another 95.385 million yuan in bank wealth management products.

From every angle, Lvjie represented quality assets, making this acquisition highly profitable.

**05 Responsible Attitude is Crucial**

During this controversy, there has been much speculation about Lvjie. This speculation essentially stems from information asymmetry and lack of transparency.

Lvjie's penetrated ownership structure is clear: Liu Yonghao's family and New Hope.

Lvjie has indeed cultivated the school meal delivery sector for years, with powerful shareholders and strong capabilities. Its ability to secure numerous school contracts in Shanghai is unsurprising.

But public anger stems from two words: responsibility and attitude.

As agricultural and food enterprises, New Hope and meal delivery company Lvjie should prioritize food safety. However, in this "rotten shrimp incident," they failed to demonstrate proper food safety awareness.

After the incident, Lvjie's attitude angered many people.

The company's public account issued a "Statement" without any comfort for affected students and parents, offering no explanations.

Even less acceptable is the absence of Lvjie's shareholders—Liu Yonghao's family and New Hope. In this matter, they indeed owe the public an apology.