Important Statement
This report is prepared by GF Securities Co., Ltd. (hereinafter referred to as "GF Securities"), the trustee for the convertible corporate bonds issued by Lingnan Eco-Culture Tourism Co., Ltd. (hereinafter referred to as "Lingnan Eco-Culture"), based on publicly disclosed information such as the "Measures for the Administration of Convertible Corporate Bonds," the "Trustee Agreement" between Lingnan Eco-Culture and GF Securities for the convertible corporate bonds issued by Lingnan Eco-Culture in 2018, and the "Prospectus" for the convertible corporate bonds issued by Lingnan Eco-Culture. GF Securities has not independently verified the content and information quoted from the above documents and does not guarantee the truthfulness, accuracy, or completeness of such content and information, nor does it assume any responsibility.
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 rely on 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 actions or inactions 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 "Lingnan Convertible Bond," and the "Lingnan Convertible Bond" cannot be redeemed on time for principal and interest.
According to the company's "Announcement on the Credit Rating of the Company and Related Bonds" (Announcement No.: 2024-119), United 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, further weakening the company's financing capacity and exacerbating its tight capital situation. If the company cannot properly resolve this issue, it may face further litigation, arbitration, freezing of bank accounts, and freezing of assets, and may also have to pay relevant late fees, penalties, and default interest, which will affect the company's production and operation, increase its financial expenses, and further increase its capital pressure, impacting its performance for the current year.
In addition, the company's debt overdue situation may lead to the company's delisting. If not properly resolved, it will affect the company's reputation in the capital market, undermine investor confidence, and further impact 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 management business, and cultural tourism business have all been severely impacted. The company's project bidding and tendering have been delayed, and project commencement has been delayed. Project construction periods and settlement progress have been significantly affected, with poor repayment status, high asset-liability ratio, declining profitability and solvency, and liquidity pressure.
On April 29, 2026, the company disclosed its 2025 annual audit report. United Honest Accounting Firm (Special General Partnership) (hereinafter referred to as "United Honest" or "Annual Auditor") audited the company's 2025 financial report and issued a disclaimer of opinion audit report.