Securities Code: 002542 Securities Abbreviation: *ST Zhongyan Announcement Number: 2026-064
Zhonghua Geotechnical Group Co., Ltd.
Announcement on Proposed Application for Pre-Restructuring and Restructuring to the Court and Risk Warning
The Company and the entire Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed herein, without any false records, misleading statements, or significant omissions.
Special Risk Warning:
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Zhonghua Geotechnical Group Co., Ltd. (hereinafter referred to as the "Company") held the 31st extraordinary meeting of the Fifth Board of Directors on July 17, 2026, and reviewed and approved the "Proposal on Applying for Restructuring and Pre-Restructuring to the Court." According to the "2026 First Quarterly Report," as of March 31, 2026, the Company's ending cash and cash equivalents balance was approximately RMB 221 million, with short-term borrowings of approximately RMB 346 million (excluding interest). Non-current liabilities due within one year were approximately RMB 1.072 billion. The Company's assets are difficult to realize in the short term, and it clearly lacks solvency. The Company proposes to apply to the Intermediate People's Court of Chengdu (hereinafter referred to as the "Court") for pre-restructuring and restructuring, stating that it cannot pay its due debts with monetary funds but has restructuring value. This matter still requires shareholder approval.
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It is uncertain whether the Court will decide to accept the Company's pre-restructuring and restructuring application. If the Court rules to accept the Company's restructuring application, the Company will cooperate with the Court and the administrator to carry out relevant restructuring work in accordance with the law and fulfill the debtor's legal obligations.
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According to Article 9.4.1, item (9) of the "Shenzhen Stock Exchange Stock Listing Rules (2026 Revision)" (hereinafter referred to as the "Stock Listing Rules"), if the Court legally accepts the Company's restructuring application, the Company's stock will be subject to an additional delisting risk warning.
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If the Company successfully implements and completes the restructuring plan, it will be beneficial for optimizing the Company's asset-liability structure and enhancing its sustainable operation and profitability. If the restructuring fails, the Company will face the risk of being declared bankrupt. According to Article 9.4.18, item (8) of the "Stock Listing Rules," the Company's stock will face the risk of termination of listing.
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The closing price of the Company's stock on July 17, 2026, was RMB 1.32 per share. If the Court legally accepts the Company's restructuring application, subsequent restructuring may involve a share transfer. During the implementation of the share transfer, the Company's stock price may fall below RMB 1. If the closing price remains below RMB 1 for twenty consecutive trading days, according to Article 9.2.1 of the "Stock Listing Rules," the Company's stock may face the risk of termination of listing due to its price being below its par value.
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Regardless of whether it enters the pre-restructuring or restructuring procedure, the Company will continue to actively manage its daily operations on the existing basis.
We kindly remind investors to pay attention to investment risks.
I. Event Overview
The Company held the 31st extraordinary meeting of the Fifth Board of Directors on July 17, 2026, and reviewed and approved the "Proposal on Applying for Restructuring and Pre-Restructuring to the Court." This matter still needs to be submitted for shareholder approval. Whether it can be approved by the shareholders' meeting is uncertain. Even if the shareholders' meeting approves the "Proposal on Applying for Restructuring and Pre-Restructuring to the Court," it is uncertain whether the Court will decide to initiate pre-restructuring and restructuring procedures for the Company.
It is uncertain whether the Court will accept the Company's restructuring application.