--- title: "Revenue fell by more than 30%, and net assets turned negative. CGE will transform into \"*ST Zhongyan\"! With 1.6 billion yuan in debt at risk, how long can the state-owned major shareholder's \"blood transfusion\" last?" type: "News" locale: "en" url: "https://longbridge.com/en/news/283219868.md" description: "China National Chemical Geology (SZ002542) expects a 34.24% decline in operating revenue in 2025 to 1.006 billion yuan, with a net loss of 951 million yuan and net assets dropping to -132 million yuan, facing delisting risk. It will be subject to delisting risk warning on April 21, 2026, and the stock abbreviation will change to \"*ST Zhongyan.\" The company's short-term liabilities exceed 1.6 billion yuan, and the controlling shareholder is urgently providing \"blood transfusion,\" but the operating fundamentals remain weak, raising doubts about future sustainability" datetime: "2026-04-18T10:03:17.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283219868.md) - [en](https://longbridge.com/en/news/283219868.md) - [zh-HK](https://longbridge.com/zh-HK/news/283219868.md) --- # Revenue fell by more than 30%, and net assets turned negative. CGE will transform into "*ST Zhongyan"! With 1.6 billion yuan in debt at risk, how long can the state-owned major shareholder's "blood transfusion" last? Every reporter: Peng Fei Every editor: Wei Guanhong The spring breeze has not been able to dispel the gloom hanging over China National Chemical Geology (SZ002542, stock price 2.05 yuan, market value 3.703 billion yuan). On the evening of April 17, after consecutive performance setbacks, this well-established domestic geotechnical engineering service provider submitted its 2025 report card. Financial report data shows that China National Chemical Geology's total operating revenue for 2025 is 1.006 billion yuan, a year-on-year decrease of 34.24%; the net profit attributable to the parent company is a loss of 951 million yuan, and the net assets have fallen to -132 million yuan, plunging into a state of insolvency. The reporter from "Everyday Economic News" noticed that as a result of this, the stock of China National Chemical Geology will be subject to delisting risk warning by the Shenzhen Stock Exchange starting from April 21, 2026, wearing the hat of "\*ST Zhongyan." In this operational crisis triggered by massive asset impairment and delayed project payments, over 1.6 billion yuan in short-term liabilities looms like a mountain. Faced with weak operational fundamentals, although the controlling shareholder Chengdu Xingcheng Investment Group Co., Ltd. (hereinafter referred to as "Chengdu Xingcheng Group") has urgently provided "blood transfusions," how long can this state-owned capital-backed shell protection battle last under such severely impaired blood production capacity? ## **The company will "wear stars and hats"** Analyzing the 2025 annual report of China National Chemical Geology, its core operational data shows a downward trend. In 2025, China National Chemical Geology achieved operating revenue of 1.006 billion yuan, a significant decrease of 34.24% compared to 1.530 billion yuan in the same period last year. The net profit attributable to shareholders of the listed company was -951 million yuan, and the net profit after deducting non-recurring gains and losses was -943 million yuan. Long-term losses have eroded the foundation of China National Chemical Geology. By the end of 2025, the net assets attributable to shareholders of the listed company had fallen to -132 million yuan, a year-on-year decrease of 116.09%. The reporter from "Everyday Economic News" noted that due to the situation where "the audited net assets attributable to shareholders of the listed company at the end of 2025 are negative," relevant provisions of the "Shenzhen Stock Exchange Stock Listing Rules (2025 Revision)" have been triggered. The company's stock will be subject to delisting risk warning starting from April 21, 2026, and the stock abbreviation will change from "China National Chemical Geology" to "\*ST Zhongyan." Exploring the root cause of the massive losses, bad debts and asset impairments hang like a heavy sword over China National Chemical Geology. During the reporting period, the company recognized asset impairment losses as high as 302 million yuan, accounting for 37.18% of the total profit, mainly for impairment provisions for certain assets and goodwill. Among them, due to the performance decline of some subsidiaries, an impairment provision of 24.2293 million yuan was made for Beijing Changdao Municipal Engineering Group Co., Ltd. Meanwhile, the book balance of accounts receivable at the end of the period exceeded 3 billion yuan, and the ending balance of bad debt provisions had reached 1.588 billion yuan. At the same time, the three core construction business segments of China National Chemical Geology are all facing contraction. The revenue from foundation treatment business is 308 million yuan, a year-on-year decrease of 55.43%. The revenue from municipal engineering business is 218 million yuan, a year-on-year decrease of 39.55% Even for the relatively stable airport engineering business, revenue has decreased by 6.47% year-on-year. Due to the low contract prices for projects undertaken and the decline in some business costs not matching the revenue decline, the gross profit margin of China National Chemical Corporation's foundation treatment business has decreased by 10.57 percentage points compared to the same period last year. Against the backdrop of a sharp decline in performance, in 2025, the net cash flow from operating activities of the company was -20.3814 million yuan, a drop of 103.31% compared to 616 million yuan in the same period last year. The company admitted that the core reason was that the repayment of some projects did not meet expectations. ## **1.6 Billion Yuan Debt Crisis** As of the end of 2025, China National Chemical Corporation's short-term loans reached 606 million yuan. Notably, non-current liabilities due within one year climbed to 1.053 billion yuan, including over 1 billion yuan in bonds payable due within one year. These two short-term interest-bearing liabilities totaled approximately 1.659 billion yuan, while the company's cash on hand at the end of the period was only 409 million yuan, resulting in a significant funding gap. Reporters from the Daily Economic News noted that faced with enormous debt repayment pressure and the funding needs of daily operations, the controlling shareholder Chengdu Xingcheng Group had to take intensive measures to "protect the market." In August 2025, the board of directors of China National Chemical Corporation approved an application to Chengdu Xingcheng Group for an additional borrowing limit of 800 million yuan. In the same month, the company also applied to its controlling shareholder for a joint liability guarantee with a total limit not exceeding 2 billion yuan to provide financing for the company and its subsidiaries. China National Chemical Corporation provided counter-guarantees to Chengdu Xingcheng Group through the pledge of its subsidiary equity and related assets, and paid a guarantee fee at a rate not exceeding 1.0% per year based on the actual guarantee amount (exceeding the shareholding ratio). In September 2025, Chengdu Xingcheng Group successively signed guarantee contracts with multiple banks. However, the strong "blood transfusion" from the state-owned major shareholder still fails to mask the hidden danger of the company's loss of self-sustaining ability. It is worth noting that regarding the board of directors' opinions on striving to lift the delisting risk warning and the measures to be taken, China National Chemical Corporation has researched and established the company's strategic development direction, shrinking or divesting non-core and loss-making businesses, and vigorously promoting the shutdown and transfer of a number of shell, loss-making, and insolvent enterprises to release resources such as funds, personnel, and assets to focus on core businesses. The company aims to expand its market layout in key areas such as strong compaction and pile foundation construction, airport runway construction, shield manufacturing and construction, and municipal construction. China National Chemical Corporation also mentioned "strengthening accounts receivable and asset revitalization": continuously improving the collection mechanism, planning ahead to track debtors, regularly adjusting collection measures, and maximizing the assurance of cash flow recovery; enhancing asset revitalization efficiency, comprehensively using methods such as leasing, investment attraction, and asset sales to improve asset utility, while accelerating the disposal of idle assets. In the context of industry cycle pressure, whether China National Chemical Corporation can rely on internal self-rescue and external state-owned capital support to win this difficult battle for shell protection in 2026 remains a major concern in the capital market Daily Economic News ### Related Stocks - [002542.CN](https://longbridge.com/en/quote/002542.CN.md) ## Related News & Research - [Did the Trump White House just give Warsh the green light to hike interest rates? 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