Important Statement
This report is prepared by the bond trustee, GF Securities Co., Ltd. (hereinafter referred to as "GF Securities"), based on the "Administrative Measures for Convertible Corporate Bonds," the "Trustee Management Agreement" between Lingnan Eco-Culture Development Co., Ltd. and GF Securities Co., Ltd. (hereinafter referred to as the "Trustee Management Agreement"), the "Prospectus for the Public Offering of Convertible Corporate Bonds by Lingnan Eco-Culture Development Co., Ltd." (hereinafter referred to as the "Prospectus"), and other relevant public information disclosure documents, as well as professional opinions issued by third-party intermediaries. GF Securities has not independently verified the content and information quoted from the above documents in this report, nor does it provide any guarantee or assume any responsibility for the truthfulness, accuracy, and completeness of such quoted content and information.
This report does not constitute a recommendation for investors to take or not take any action. Investors should make independent judgments on relevant matters and should not use any content in this report as a commitment or statement made by GF Securities. In any event, GF Securities shall not be liable for any action or inaction taken by investors based on this report.
Risk Warning
I. "Lingnan Convertible Bond" Cannot Be Redeemed on Time
According to the company's "Announcement on the Inability to Redeem 'Lingnan Convertible Bond' on Time" (Announcement No.: 2024-113), the company's existing monetary funds are insufficient to repay the principal and interest of "Lingnan Convertible Bond," and "Lingnan Convertible Bond" cannot be redeemed on time.
According to the company's "Announcement on the Credit Rating of the Company and Related Bonds" (Announcement No.: 2024-119), Lianhe Credit Rating Co., Ltd. has downgraded the company's long-term credit rating to C and the credit rating of "Lingnan Convertible Bond" to C.
The overdue situation of "Lingnan Convertible Bond" may affect the confidence of other creditors in the company, thereby further weakening the company's financing capabilities and exacerbating its tight cash flow situation. If the company fails to resolve the issue properly, it may face further litigation, arbitration, freezing of bank accounts, and freezing of assets, and may also have to pay relevant liquidated damages, late fees, and penalties, which will affect the company's production and operation, increase its financial expenses, and further increase its capital pressure, impacting the company's performance for the current year.
In addition, the company's debt overdue situation may lead to the company's delisting. If not resolved properly, it will affect the company's reputation in the capital market, affect investors' confidence in the company, and further affect the company's stock price. The company may be delisted due to triggering circumstances for mandatory delisting due to trading.
II. Risk of Continuing Operations
In recent years, the company's ecological environment construction and restoration business, water affairs and water environment governance business, and cultural tourism business have all suffered significant impacts. The company's project bidding and tendering have been delayed, project commencement has been delayed, and project construction periods and settlement progress have been significantly affected. The collection of funds has been poor, the asset-liability ratio is high, profitability and solvency have continued to decline, and there is liquidity pressure.
On April 29, 2026, the company disclosed its 2025 annual audit report. United Horizon Certified Public Accountants (Special General Partnership) (hereinafter referred to as "United Horizon" or "Annual Auditor") audited the company's 2025 financial report and issued a disclaimer of opinion audit report.
According to the "Lingnan Eco-Culture Development Co., Ltd. 2025 Annual Report," in 2025, the company's operating revenue was 11,208.75 million yuan, a year-on-year decrease of 86.99%; in 2025, the net profit attributable to shareholders of the listed company was -2,335.6761 million yuan, an increase in loss of 137.29% compared to the same period last year.