Securities Code: 002217
Securities Abbreviation: HLT
Announcement Number: 2026-025
HUALITAI TECHNOLOGY CO., LTD.
Announcement Regarding the Company and Related Parties Receiving a "Notice of Prior Administrative Penalty"
The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate, and complete, and that there are no false records, misleading statements, or major omissions.
On April 28, 2025, HUALITAI TECHNOLOGY CO., LTD. (hereinafter referred to as the "Company" or "HLT") received a "Notice of Investigation" (No.: JZJZ2025003) issued by the China Securities Regulatory Commission (hereinafter referred to as the "CSRC") for suspected violations of information disclosure rules. The CSRC decided to launch an investigation into the Company, as detailed in the "Announcement Regarding Receipt of the CSRC's Notice of Investigation" (Announcement No.: 2025-037) disclosed by the Company on April 29, 2025.
On June 18, 2026, the Company and related parties received a "Notice of Prior Administrative Penalty" (Min Zheng Jian Han [2026] No. 282) issued by the Fujian Securities Regulatory Bureau of the CSRC (hereinafter referred to as the "Fujian CSRB"). The relevant content is hereby announced as follows:
I. Main Content of the "Notice of Prior Administrative Penalty"
"HUALITAI TECHNOLOGY CO., LTD., Wen Kaifu, Chen Guisheng, Zheng Jianfang, Wang Yongyong, Zeng Xiaoli, Huang Aiwu, Zheng Shu, Chen Ying:
The case of alleged information disclosure violations and irregularities by HUALITAI TECHNOLOGY CO., LTD. (hereinafter referred to as HLT or the Company) has been investigated by this Bureau. This Bureau intends to impose administrative penalties on you. Hereby, the facts of violations, reasons, basis for the administrative penalties intended to be imposed by this Bureau, and the relevant rights you enjoy are hereby informed.
Upon investigation, the facts of your suspected violations are as follows:
- Overstating operating revenue and understating operating revenue, overstating profits for 2017-2019, and understating profits for 2020-2021.
HLT overstated its operating revenue for 2017-2019 and understated its operating revenue for 2020 without actual transactions, and increased provisions for bad debts based on the fictitious operating revenue. Among them, in 2017, operating revenue was overstated by RMB 687,255,906.35, and provisions for bad debts were increased by RMB 9,638,731.70, resulting in an overstatement of total profit by RMB 677,617,174.65; in 2018, operating revenue was overstated by RMB 697,938,805.19, and provisions for bad debts were increased by RMB 36,689,568.33, resulting in an overstatement of total profit by RMB 661,249,236.86; in 2019, operating revenue was overstated by RMB 552,648,189.39, and provisions for bad debts were increased by RMB 78,805,813.39, resulting in an overstatement of total profit by RMB 473,842,376; in 2020, operating revenue was understated by RMB 816,774,491.83, and provisions for bad debts were increased by RMB 176,140,626.12, resulting in an understatement of total profit by RMB 992,915,117.95; in 2021, provisions for bad debts were increased by RMB 175,358,374.03, resulting in an understatement of total profit by RMB 175,358,374.03.
- Incorrect accounting treatment of financing by HLT's subsidiaries, overstating profits for 2019-2021.
In September 2019, Jiangxi HLT Technology Co., Ltd. (hereinafter referred to as Jiangxi HLT) and Shenzhen BYD Electronic Components Co., Ltd. (later renamed Shenzhen HLT Optoelectronics Co., Ltd.) received RMB 1 billion and RMB 500 million in financing from ABC Financial Asset Investment Co., Ltd. (hereinafter referred to as ABC Investment), respectively. According to the agreements signed by both parties and subsequent execution, the financing funds should have been accounted for as financial liabilities in accordance with Article 10 of the "General Financial Instruments" (Cai Kuai [2017] No. 14). The Company accounted for these financing funds as equity instruments, resulting in understated financial expenses of RMB 27,246,600, RMB 97,500,000, and RMB 97,500,000 in 2019, 2020, and 2021, respectively, and overstating total profits by RMB 27,246,600, RMB 97,500,000, and RMB 97,500,000, respectively.