ST Lingnan: Subsidiary applied for bankruptcy liquidation, outcome is still uncertain

Recently, ST Lingnan announced that its controlling subsidiary Hengrun Group was applied for bankruptcy liquidation by Dingce Financing on the grounds of inability to repay due debts and a clear lack of repayment capability, to the Shanghai Third Intermediate People's Court. Hengrun Group has submitted a "Bankruptcy Application Objection" and supporting evidence. As of the announcement date, Hengrun Group has not received the court's ruling acceptance document, and there is significant uncertainty regarding whether it will enter bankruptcy liquidation. If it enters bankruptcy liquidation, Hengrun Group will no longer be included in the company's consolidated financial statements, which may affect the company's financial indicators. The company also faces risks related to guarantees and the inability to recover receivables. In addition, the company has not received any plans from relevant personnel for share reductions in the next six months, but there is a risk of passive share reduction for Co-Chairman and President Yin Hongwei's shares