Hengyang Petrochemical Logistics Limited Provides Critical Update on US Sanctions, Financial Impact, and Continued Trading Suspension

Hengyang Petrochemical Logistics Limited (“the Company”), together with its subsidiaries (“the Group”), has issued a significant market update regarding the inclusion of the Company, its 41.64%-owned joint venture Jiangyin Foreversun Chemical Logistics Co., Ltd. (“Jiangyin Foreversun”), and Mr. Gu Wenlong (Executive Director and CEO) on the United States Department of Treasury’s Office of Foreign Assets Control (“OFAC”) Specially Designated Nationals List (SDN List).

Key Points of the Report

• Sanction Background: The Company, Jiangyin Foreversun, and Mr. Gu Wenlong were added to the OFAC SDN List due to alleged provision of storage services to Iranian-connected vessels by Nanrong Petrochemical Co., Ltd. (“Nanrong Huaxue”), a subsidiary of Jiangyin Foreversun, between August 2023 and February 2025.
• Nature of Transactions: Nanrong Huaxue provided butadiene storage services to vessels that, upon later investigation, were possibly Iranian-connected. These vessels were already in China when they called at the port, and their connections were not identified at the time. The vessel “Sunrise” (designated in the sanction) was known as “ELIN” and operated under the flag of Cameroon when it engaged Nanrong Huaxue’s services.
• Revenue Impact:
  • Revenue from these Iranian-connected vessels was approximately RMB1.7 million (2023), RMB4.9 million (2024), and RMB3.7 million (for the nine months ending September 2025).
  • This represented only about 0.36%, 0.84%, and 0.92% of the total revenue of Jiangyin Foreversun and its subsidiaries (“China Holdco Group”) for the respective periods.

Price-Sensitive and Shareholder-Relevant Information

• Significant Loss of Foreign Customers: Following the imposition of sanctions, several key customers—particularly those from the US and Europe—have indicated they cannot continue business with the China Holdco Group as long as the sanctions are in place. This development is highly material and likely to affect the company’s revenue streams and profitability.
• Sharp Revenue Declines:
  • In October and November 2025, the Group’s Tianjin operations (with higher exposure to import/export business) saw revenue drop by more than 50% compared to September 2025.
  • The storage service segment recorded revenue declines of 29% and 32% in October and November 2025, respectively, versus September 2025.
• Expected Full-Year Loss: The Company now expects the China Holdco Group to report a loss for FY2025, a stark reversal from the RMB5.4 million profit reported in FY2024.
• Ongoing Customer Engagement: The Group is actively reaching out to key customers to address concerns and attempt to mitigate business losses.
• Trading Suspension: The trading of Hengyang Petrochemical Logistics Limited’s shares will remain suspended per Singapore Exchange Regulation (SGX RegCo) guidelines. The suspension will continue until the Company is able to demonstrate it is no longer a sanctioned subject or has ceased the sanctioned activity.
• Petition to Remove from SDN List: The Company is consulting legal advisors and sanction experts in China and the US, with the intention to petition OFAC for removal from the SDN List. However, no timeline for this process is available, further adding to the uncertainty.

Implications for Shareholders and Investors

• The impact of US sanctions has already led to material financial losses and the withdrawal of key international customers, which is expected to have a significant negative effect on the Company’s future earnings and valuation.
• Suspension of trading on SGX creates liquidity concerns for shareholders, with no clear timeline for resumption.
• Ongoing uncertainty regarding the outcome and duration of the OFAC petition process may continue to weigh on the Company’s prospects and share price, should trading resume.
• Any further updates or developments regarding the sanctions, customer relationships, or trading status will be communicated by the Company.

Conclusion

Hengyang Petrochemical Logistics Limited faces a critical period marked by regulatory, operational, and financial challenges stemming from its inclusion on the OFAC SDN List. The loss of key customers, sharp revenue declines, and anticipated full-year losses represent highly material events that could significantly affect the Company’s future performance and shareholder value. The ongoing trading suspension adds to investor uncertainty, and shareholders are advised to closely monitor further announcements for updates on the sanctions and trading status.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult their professional advisors before making investment decisions. The information is based on company disclosures as of 10 December 2025 and may be subject to change.

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