Shanxi Huayang New Material Co Ltd

Huayang New Materials has received two lawsuits in August after transferring 100% equity in its subsidiary, Bio New Materials, for 1 yuan, and is accused of excessive control over asset disposal and evading debt. On August 12, Yangzhou Huitong Technology filed a lawsuit against Bio New Materials and Huayang New Materials over a construction contract dispute, claiming unpaid project payments of 58.389 million yuan and overdue interest of 5.4667 million yuan, and demanding joint liability from the two companies. In early August, Shanxi Yunzhuo Construction Group sued Huayang New Materials, Taihua Group, and Bio New Materials over a creditor's right of revocation dispute, claiming unpaid project payments of 15.1964 million yuan, and requesting that the equity transfer agreement be revoked and the equity be returned and registered under Huayang New Materials. The combined principal and provisional interest in the two cases total nearly 80 million yuan, and both are currently in the first-instance stage and have not yet opened. Huayang New Materials expects attributable net profit of 2 million to 3 million yuan in the first half of 2026, a year-on-year decrease of 79.13 million to 80.13 million yuan, with non-GAAP net profit of negative 32 million to negative 23 million yuan.

Kangsheng Co. announced that its chairman and general manager Wang Yajun has been subjected to bail pending trial by judicial authorities, but this does not affect his performance of duties. Upon verification, the matter does not involve the company's production and operating activities, nor does it involve the company's business, assets, or major matters that should have been disclosed but were not. As of the disclosure date of the announcement, Wang Yajun is able to perform his duties as chairman and general manager normally, the company's board of directors is operating normally, and all operational and management activities are proceeding in an orderly manner. In addition, Baofeng Energy reported a net profit attributable to the parent company of 9.728 billion yuan in the first half of the year, up 70.14 percent year on year. Quectel reported a net profit attributable to the parent company of 602 million yuan in the first half, up 27.84 percent year on year. Nanqiao Food reported a net profit attributable to the parent company of 2.5939 million yuan in the first half, down 92.79 percent year on year. A major shareholder of Shanshuishan plans to reduce its stake by no more than 4.03 percent. The actual controller of Zhilicube has completed a reduction plan involving a total of 5.0554 million shares. Zhongjian Technology faces a total fine of 3.9 million yuan for illegal information disclosure. A major lawsuit involving Radio and Television Network was settled through mediation, and the company is required to pay 70.1917 million yuan. Huayang New Materials received a notice of response and is being sued for joint payment of 58.389 million yuan in project fees. In the case involving ST Meigu as the appellee in a tort liability dispute, the second-instance court ruled to dismiss part of the lawsuit.

Huayang New Materials is facing a revocation lawsuit filed by creditor Shanxi Yunzhuo Construction Group after it transferred its 100% stake in wholly-owned subsidiary Shanxi Huayang Biodegradable New Materials to its controlling shareholder Taihua Group for one yuan. Yunzhuo Construction claims it is still owed 15.1964 million yuan for two projects completed for the biodegradable materials subsidiary, and argues the transfer was an attempt to evade debts and harm creditor interests. It is asking the court to revoke the equity transfer agreement and restore the shares to Huayang New Materials. Huayang New Materials stated that the equity transfer was approved by its shareholders' meeting, the transaction price has been fully paid, and the industrial and commercial registration change was completed on July 16, 2026. The case has not yet been heard, and the company cannot yet assess the specific impact on its performance. The company has suffered persistent losses in its main business in recent years, with net profit attributable to the parent company in the red for five consecutive years from 2021 to 2025, and its recurring net profit has been negative for seventeen straight years since 2009. In the first half of this year, it expects net profit attributable to the parent company of between 2 million and 3 million yuan, a sharp year-on-year decline.