ST SZZT received the administrative regulatory measures decision from the Shenzhen Securities Regulatory Bureau

According to the announcement from Zhitong Finance APP, ST Zhitong (002197.SZ) has recently received the "Decision on Corrective Measures Against Shenzhen Zhitong Electronics Co., Ltd." [2025] No. 62 issued by the Shenzhen Securities Regulatory Bureau of the China Securities Regulatory Commission (hereinafter referred to as "Shenzhen Securities Regulatory Bureau"), as well as the "Decision on Warning Letters Against Zeng Shengqiang, Cheng Fengwu, Fu Deliang, and Peng Xue," with the following details:

When preparing the 2023 performance forecast, the company did not fully consider the true source of the relevant payments from Xianghe County Xiaoci Cultural Development Co., Ltd. in the Xianghe Jiusheng Temple project and the actual operation of the project, resulting in inaccurate financial data disclosed in the 2023 performance forecast, violating Article 3, Paragraph 1 of the "Administrative Measures for Information Disclosure of Listed Companies" (CSRC Order No. 182).

From November 2021 to August 2023, the company provided financial assistance to Hunan Bochuang High-tech Industrial Co., Ltd. without fulfilling the review procedures and information disclosure obligations, and only held a board meeting and shareholders' meeting for supplementary review and external disclosure on June 26 and July 16, 2024, violating Article 3, Paragraph 1 of the "Administrative Measures for Information Disclosure of Listed Companies" (CSRC Order No. 182).

From 2020 to 2023, the company did not timely review and disclose related party transactions with Shenzhen Yongtaisheng Construction Engineering Co., Ltd. (hereinafter referred to as Yongtaisheng); from July 2020 to July 2024, part of the project payments made by the company to Yongtaisheng constituted non-operating fund occupation by related parties, and the company only held a board meeting for supplementary review and external disclosure on June 19, 2024, violating Article 2, Paragraph 1, Article 48, Article 3, Paragraph 1, and Article 41 of the "Administrative Measures for Information Disclosure of Listed Companies" (CSRC Order No. 40 and No. 182).

The company recognized revenue from certain engineering business before the contract signing and project settlement date, indicating that the internal control over revenue accounting is inadequate, which does not comply with Article 4 and Article 12 of the "Guidelines for the Application of Internal Control No. 9 - Sales Business."

When preparing the 2022 semi-annual report, the company miscalculated the aging of accounts receivable from certain customers and did not fully consider the impact of the expiration of commercial acceptance bills on the customers' credit, which does not comply with Article 46 and Article 63 of the "Accounting Standards for Enterprises No. 22 - Financial Instruments Recognition and Measurement" (2017).

The above situations reflect that your company has issues in standardized operations regarding information disclosure, financial accounting, and internal control. According to Article 52 of the "Administrative Measures for Information Disclosure of Listed Companies" (CSRC Order No. 182) and Article 21 of the "Rules for On-site Inspection of Listed Companies" (CSRC Announcement [2022] No. 21), the Shenzhen Securities Regulatory Bureau has decided to impose corrective regulatory measures on the company. The company should take effective measures for correction according to the following requirements and submit a written rectification report to our bureau within 30 days from the date of receipt of the decision