Jiangsu Sanfangxiang Industry Co Ltd

*ST Sanfang released its 2026 interim report on August 28, 2026. As of June 30, the company's total operating revenue was RMB 9.669 billion, and net profit attributable to the parent was RMB 4.9305 million, ranking 21st among peer companies. Net cash flow from operating activities was negative RMB 317 million, ranking 22nd, a decrease of RMB 1.611 billion compared with the same period last year, down 124.51 percent year on year. The asset-liability ratio was 68.40 percent, gross margin was 3.29 percent, return on equity was 0.10 percent, and diluted earnings per share was RMB 0.00. Total asset turnover was 0.57 times, and inventory turnover was 6.90 times. The number of shareholders was 43,500, and the top ten shareholders held 3.251 billion shares, accounting for 80.81 percent of total share capital.

*ST Sanfang announced that the shares held by its controlling shareholder, Sanfangxiang Group, have been subject to a rolling freeze by the Wuxi Intermediate People's Court in Jiangsu Province. The number of frozen shares is 2.967 billion, representing 100% of its shareholding and 73.76% of the company's total share capital. This rolling freeze was applied for by the Wuxi branch of Bank of Communications. As of the announcement date, Sanfangxiang Group's cumulative rolling frozen shares total approximately 15.018 billion, representing 506.11% of its shareholding and 373.33% of the company's total share capital. Sanfangxiang Group holds 2.967 billion shares of the company, accounting for 73.76% of total share capital. These shares had already been fully pledged and are now all subject to judicial freezes. The company cautioned that Sanfangxiang Group has partially defaulted on its debts, has no issuer rating or debt rating, and is actively negotiating litigation or arbitration disputes arising from overdue issues. However, there is no situation of harming the company's interests through non-operational capital occupation or irregular guarantees. The company stated that the rolling freeze of the above shares has not had a material impact on its governance structure, but the high proportion of Sanfangxiang Group's shares subject to cumulative judicial freezes and rolling freezes may pose a risk to the stability of the company's control if subsequent disposals are involved.

*ST Sanfang announced that the shares held by its controlling shareholder, Sanfangxiang Group, have been newly subjected to successive freezes. The number of shares frozen this time is 2.967 billion shares, accounting for 100% of its holdings and 73.76% of the company's total equity. The freeze was applied by the Binhu District People's Court of Wuxi City, Jiangsu Province, starting on July 15, 2026, at the request of the Wuxi branches of Industrial Bank and Bank of Communications for assistance in successive freezes. As of the announcement date, Sanfangxiang Group holds 2.967 billion shares of the company, representing 73.76% of total equity. All of these shares have been frozen and are subject to successive freezes, with cumulative successive frozen shares reaching 12.05 billion shares, accounting for 406.11% of its total holdings and 299.56% of the company's total equity. The company stated that Sanfangxiang Group has partially defaulted on debts, has no entity or debt rating, and litigation or arbitration disputes arising from overdue debts are under negotiation. However, there are no instances of harming the company's interests through non-operational capital occupation or irregular guarantees. Due to the high proportion of shares cumulatively frozen by judicial authorities and successive freezes, if subsequent disposal occurs, there may be a risk affecting the stability of the company's control. A same-day announcement also revealed that the company and its subsidiaries within the consolidated reporting scope have 11 undisclosed cumulative litigation cases over the past 12 consecutive months, involving a total amount of 859 million yuan, which has exceeded 10% of the company's most recent audited net assets. As some cases have not yet been heard or are under trial and mediation, the final judgment outcomes remain uncertain, and the impact on the company's current or future profits cannot yet be accurately measured.