Fujian Sanmu Group Co Ltd

ST Sanmu announced that part of the equity of its controlling subsidiary Yingke Huijin Qingdao Private Equity Fund Management Company Limited has been judicially frozen by the Hangzhou Shangcheng District People's Court. The frozen equity amount is 7.0982 million yuan, and the freeze period runs from 24 August 2026 to 23 August 2029. The freeze is a property preservation measure taken by the court in a contract dispute between Zheshang Asset Management and the company and its subsidiary Sanmu Yingxiu. The case involves debt management service fees of about 7.28 million yuan plus liquidated damages, with a total amount in dispute of about 7.6072 million yuan, and is scheduled for hearing on 22 October 2026. The company said this equity freeze will not cause a change in its shareholding ratio and does not represent the court's final determination of substantive rights and obligations. As of the announcement date, other minor litigation and arbitration matters involving the company and its subsidiaries that have not reached the disclosure threshold total about 83.7691 million yuan, accounting for 69.43 percent of the most recent audited net assets.

ST Sanmu announced on September 1, 2026, that its wholly-owned subsidiary Fujian Sanmu Construction Development Co., Ltd., along with the company itself and Fuzhou Changle District Sanmu Real Estate Co., Ltd., has been sued by Shanghai Pudong Development Bank Co., Ltd. Fuzhou Branch over a financial loan contract dispute, with the amount involved provisionally calculated at approximately 61.5565 million yuan. The case has been accepted by the Taijiang District People's Court of Fuzhou, with case number 2026 Min 0103 Min Chu 9032, and is scheduled for hearing on October 9, 2026. From January to March 2026, Shanghai Pudong Development Bank Fuzhou Branch signed three working capital loan contracts with Sanmu Construction Development, totaling 60.8 million yuan in loans. Sanmu Construction Development provided a margin pledge of 800,000 yuan, while the company and Changle Sanmu Real Estate each provided joint liability guarantees with maximum principal not exceeding 60 million yuan. Because Sanmu Construction Development failed to repay as agreed, Shanghai Pudong Development Bank declared the loans due early and filed the lawsuit. As of the announcement date, other small litigation and arbitration matters involving the company and its subsidiaries that have not reached disclosure thresholds total approximately 83.7691 million yuan, accounting for 69.43 percent of the company's most recent audited net assets. The company stated it is actively communicating and negotiating and will participate in the litigation in accordance with the law. The case has not yet been heard, and the impact on company profits remains uncertain.

ST Sanmu released its interim report on August 26, 2026. During the reporting period, the company's total operating revenue was 1.402 billion yuan, down 62.74% year-on-year. Net profit attributable to the parent company was negative 851 million yuan, a decrease of 746 million yuan compared with the same period last year, with the loss widening. Net cash flow from operating activities was negative 309 million yuan, down 300.75% year-on-year. The company's asset-liability ratio rose to 104.88%, an increase of 21.12 percentage points from the same period last year. Gross margin was 3.67%, up slightly by 0.69 percentage points year-on-year. Diluted earnings per share were negative 1.83 yuan, a decrease of 1.60 yuan from the same period last year. Total asset turnover fell to 0.18 times, and inventory turnover fell to 0.61 times, down 60.50% and 54.53% year-on-year respectively. As of the end of the reporting period, the company had 34,900 shareholders, and the top ten shareholders held a combined 124 million shares, accounting for 26.61% of the total share capital.

ST Sanmu and its wholly-owned subsidiary Fujian Sanmu Construction Development have been sued by China CITIC Bank Fuzhou Branch over a financial loan contract dispute, with the total amount involved approximately 77.8 million yuan. The case stems from loan contracts signed in February 2026, when Sanmu Group and Sanmu Construction Development respectively entered into 7 million yuan and 70 million yuan loan agreements with China CITIC Bank Fuzhou Branch. Due to failure to pay interest on time, the plaintiff declared the loans due early. The plaintiff's claims include repayment of loan principal and interest, with the total subject amount for the Sanmu Group case at 7.0849 million yuan and for the Sanmu Construction Development case at 70.7155 million yuan, and demands that Sanmu Group bear joint guarantee liability for Sanmu Construction Development's debt. The case is scheduled for trial on August 17, 2026, and has not yet been heard. The company stated that the litigation outcome is uncertain. In addition, other minor litigation and arbitration matters involving the company and its subsidiaries that do not meet disclosure thresholds total approximately 82.2052 million yuan, accounting for 68.14% of the most recent audited net assets. The company previously forecast a net loss attributable to the parent company of 770 million to 930 million yuan for the first half of 2026, a year-on-year plunge of 633.83% to 786.32%.