Digital China Information Service Co LtdProvision for expected liability from contract dispute litigation, leading to significant net loss increase.

Digital China Holdings expects to record a shareholder loss of approximately 50 million to 70 million yuan for the six months ending June 30, 2026, compared with a profit of about 15 million yuan in the same period last year. The swing to a loss is mainly due to its 38.61 percent-owned indirect non-wholly-owned subsidiary Digital China Information Service, which expects a shareholder loss of 240 million to 390 million yuan, a significant increase from a loss of about 96.4 million yuan a year earlier. The expected increase in net loss at Digital China Information Service is primarily due to a provision for an expected liability arising from a contract dispute between one of its wholly-owned subsidiaries and Beijing Urban Construction Intelligent Control Technology. The judgment has not yet taken effect, and Digital China Information Service has filed an appeal with the Beijing High People's Court.
Digital China Information Service Co LtdProvision for expected liability from contract dispute litigation, leading to significant net loss increase.
Beijing Urban Construction Intelligent Control Technology is the counterparty in the contract dispute; the provision is for liability to them, which is favorable.