(Yicai Global) Aug. 21 -- Liangmianzhen, the maker of the popularChinesetoothpaste brand LMZ, has reported annual operating losses for 12 years in a row, but has avoided being delisted from the Shanghai exchange by selling lucrative stock assets to stay in the black. But it may be running out of ammunition.

The company, based in Liuzhou in Guangxi Zhuang Autonomous Region, has only 15.12 million shares remaining of CITIC Securities, a leading Chinese brokerage, just four-fifths of the 95.12 million it owned after several reductions,public data shows. It intends to sell CITIC Securities shares again to avoid beingflaggedfor'special treatment' on the stock marketforlosing money over two straight years.

Thefirm'sboard plans to sellup to12 million shares of CITIC Securities, which willnet proceeds of nearly CNY200 million (USD29 million) based ontheJuly 3 closing price of CNY16.32 a share.The funds raisedwillgo torepay loans, replenish working capital and developthe company'smain business, it said in a statement on July 3.

Despite its poor business performance (Liangmianzhen just logged a CNY12 million first-half operating loss on an 18 percent drop in revenue), the companyamassed afortune instock investments.BuyingCITIC Securitiessharesin 1999enableditto turn atotal profit of more than CNY2 billion(USD293 million)over the yearsfromdividends anddivestments ofthoseshares, peritsownfigures.

Based on CITIC Securities share price of CNY16.07 per share at the close ofyesterday's trading, Liangmianzhen holds around CNY243 million worth,making upa bit over10 percent of Liangmianzhen's CNY2.24 billion market value.

Founded in 1941, Liangmianzhen pioneered toothpaste with traditional Chinese medicine and was once a leader in thecountry's dental caremarket,butforeign competitionand brand aginghave slowly sappedits main business. The company has invested in medicine, paper,real estateand other areas, but theseare also losing money. The firm hadan operating loss of CNY144 million last year.

Shares of Liangmianzhen [SHA:600249]closedat CNY4.08yesterday, down 0.73 percent,havingfallenmore than 80 percent from a high of CNY31.80 in early 2008.

The company hascut its stake inCITIC Securitiesmany timesin orderto become profitable.Itposted a net loss of CNY116 millionin the first three quarters of 2014, butturned aCNY22millionprofitforthe whole yearafter selling10 million CITIC Securities shares that December toreapCNY258 million.

Liangmianzhen played thisgame again in 2016. Itbookeda net loss of CNY78.1 millionin the first half. Prior to the release of its semi-annual report (ending June 2016),itsboard authorized the sale ofup to11.6 million sharesforthe rest of the year.Itsold them, securing CNY157 million, which undoubtedlywas a decisive factor initsnet profit of CNY27millionthat year.

Editor: Ben Armour