Beijing Hezong Science&Technology Co Ltd

ST Hezong announced on the evening of September 15 that it is publicly recruiting restructuring investors for the company, with registration closing at 6 p.m. on October 15, 2026. The company received a bankruptcy restructuring and pre-restructuring notice from creditor Jiangsu Weituoli Electric Power Engineering Technology Co., Ltd. on July 24, 2026. On July 29, the Beijing First Intermediate People's Court decided to initiate pre-restructuring for the company and appointed the liquidation group of Hezong Technology Co., Ltd. as the interim administrator. Prospective industrial investors are required to pay a registration deposit of 50 million yuan, while prospective financial investors must pay a registration deposit of 10 million yuan. In the first half of the year, the company achieved operating revenue of 788 million yuan, up 7.11 percent year on year, while net profit attributable to the parent company was a loss of 118 million yuan, with the loss widening by 51.27 percent compared with the same period last year. Net assets attributable to the parent company at the end of the period were only 2.44 million yuan, down 97.96 percent from the end of the previous year. The company posted losses for three consecutive years from 2023 to 2025, with cumulative losses reaching 2.169 billion yuan. The announcement cautioned that the court's initiation of pre-restructuring does not mean it has formally accepted the restructuring application. If the restructuring fails, the company faces the risk of being declared bankrupt and having its shares delisted.

ST Hezong disclosed its 2026 semi-annual report on August 28. In the first half, it achieved total operating revenue of 788 million yuan, up 7.11 percent year on year, but net profit attributable to the parent company showed a loss of 118 million yuan, compared with a loss of 77.88 million yuan in the same period last year. Net profit after deducting non-recurring items was a loss of 117 million yuan, compared with a loss of 75.28 million yuan a year earlier. Net cash flow from operating activities was 55.94 million yuan, down 66.59 percent year on year. Basic earnings per share were negative 0.11 yuan, and the weighted average return on equity was negative 193.63 percent. The company's business includes the power segment and the lithium battery cathode material segment. The power segment covers the research, development, manufacturing and sales of power distribution, power transformation and related control equipment, while the lithium battery cathode material segment focuses on the research, development, manufacturing and sales of precursors for lithium battery cathodes.

ST Hezong recently received an Enforcement Notice delivered by the Jiaxing Intermediate People's Court of Zhejiang Province. Due to a contract dispute with Zhejiang Huayou Cobalt, the company is required to fulfill obligations determined by an effective judgment, with an enforcement target of approximately 166 million yuan plus interest, and an additional enforcement fee of about 232,400 yuan. The case originated from Huayou Cobalt's capital increase in 2022 into the company's subsidiary, Hunan Yacheng New Energy, under which the company had a conditional equity buyback obligation but failed to perform on time. Huayou Cobalt filed a lawsuit in June 2025, and the Zhejiang High People's Court has issued a final judgment. The company stated that the impact of this case on current or future profits will be subject to the annual audit report, and it will actively take measures to safeguard the interests of the company and shareholders.