ST Huaxi Debt Overdue Risk of Delisting Continues to Escalate | Quick Read Announcement

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Caixin News, March 11 — Reporter Zhang Liande: ST Huaxi (002630.SZ) faces renewed operational risks. Recently, the company’s debt delinquency alerts have sounded again, with a 28 million yuan bank loan overdue. The company plans to offset the debt with the balance in its margin account, but the plan is still uncertain.

This incident reflects the company’s ongoing financial deterioration. In recent years, revenue and profits have shrunk simultaneously, with high asset-liability ratios. Coupled with insolvency, lawsuits, and the seizure of the actual controller’s shares, the company is now under multiple crises. It has been subject to other risk warnings and faces dual delisting risks due to an expected negative net assets at year-end and internal control audit doubts. The “delisting” pressure is closing in, and the former “boiler king” is now on the brink of delisting.

High asset-liability ratio unsustainable, debts overdue

Tonight, ST Huaxi announced that two bank loans totaling 28 million yuan have not been repaid on time, constituting overdue debts. The company plans to offset the debt with the balance in its guarantee deposit account at Bank of China, and negotiations are ongoing.

The announcement shows that on February 17 and March 3, 2025, ST Huaxi borrowed 8 million and 20 million yuan respectively from the Zigong branch of Bank of China. Both loans have a term of less than one year, mainly for working capital, raw material procurement, and payment of goods. According to the contracts, the company should repay 8 million yuan by February 24, 2026, and 20 million yuan by March 6. However, as of the announcement date, neither debt has been repaid, and the bank will treat both as overdue.

Latest financial data shows that ST Huaxi’s revenue and profits continue to decline. The company expects 2025 revenue of 1.55 billion yuan, down about 40% year-on-year, with a full-year loss of about 240 million yuan. Profits have been bleeding for six consecutive years, with total losses exceeding 2.6 billion yuan.

The company’s debt repayment capacity is near collapse. As of September 30, 2025, its current ratio was only 0.78, and quick ratio was 0.65, indicating severe short-term liquidity issues. Meanwhile, the asset-liability ratio is as high as 95.88%.

The overdue 28 million yuan debt directly reflects the company’s worsening financial situation. Although the company plans to offset the debt with 105 million yuan in guarantee deposits at Bank of China, the plan’s implementation remains uncertain. If the offset fails, the company faces lawsuits, account freezes, asset auctions, and other risks, further straining its already fragile cash flow. Even if successful, the high debt burden and ongoing losses make short-term recovery unlikely.

Continual turmoil, potential “delisting”

Beyond debt risks, the company is embroiled in multiple operational crises, including insolvency and lawsuits. Its stock has been subject to other risk warnings and faces the severe “ST” delisting risk.

According to the performance forecast, by the end of 2025, the company’s net assets attributable to shareholders are expected to be -40 million yuan, indicating insolvency. According to Shenzhen Stock Exchange Listing Rules Article 9.3.1, if a listed company’s audited net assets at the end of the most recent fiscal year are negative, the exchange will issue a delisting risk warning.

Additionally, the company’s 2024 internal control audit received a disclaimer of opinion from auditors, leading to an “ST” risk warning. If the 2025 internal control audit also results in a disclaimer or adverse opinion, the company will face a second delisting warning, with double pressure. Currently, the 2025 annual report audit is still underway.

Notably, the company changed auditors this year. In December last year, it terminated its contract with Sichuan Huaxin (Group) Certified Public Accountants and appointed Zheng Dan Zhiyuan (Shenzhen) Certified Public Accountants as its 2025 auditor.

Meanwhile, ongoing lawsuits continue to drain the company’s resources. In January 2026, the company received a first-instance judgment from the People’s Court of Guixi City, Jiangxi Province, requiring it to pay 31.36 million yuan for a leaseback contract dispute with Guixi Gongkong Jincheng Financing Leasing Co., Ltd., and to share 187,400 yuan in litigation costs. The company has appealed, but the final outcome remains uncertain. If the judgment is upheld, it will further increase financial burdens.

Another construction contract dispute saw a potential turning point. In December 2025, Sichuan Hongzhou Machinery Equipment Leasing Co., Ltd. sued ST Huaxi for unpaid construction fees of 27.78 million yuan, but the plaintiff withdrew the lawsuit in January this year.

However, the actual controller’s shareholding risks have recently eased somewhat. The announcement shows that the company’s controlling shareholder and actual controller, Li Renchao, has had 20.84 million shares auctioned by judicial authorities since February 2025. As of December 1, 2025, 17.712 million shares have been transferred, with a total transaction amount of 52.07 million yuan, covering the court’s enforcement limit. In May 2025, Li Renchao was detained and filed for investigation; although he was released and placed under supervision in September, this incident has negatively impacted the company’s market image.

(Caixin News, Reporter Zhang Liande)