Jiu Rong Holdings Quarterly Update: Critical Steps Taken to Address Auditor’s Disclaimer of Opinion

Overview

Jiu Rong Holdings Limited has released its latest quarterly update on the progress of its action plan to address the auditor’s disclaimer of opinion regarding the Company’s consolidated financial statements for the eighteen months ended 30 June 2025. This update is crucial for investors and shareholders, as it outlines ongoing measures to resolve material uncertainties about the Group’s going concern status and other audit scope limitations. The Company has committed to providing quarterly updates until the disclaimer is fully addressed.

Key Points from the Update

• Going Concern and Liquidity Measures:
  • Disposal of 11 new energy bus charging stations in Hangzhou, approved by shareholders and currently in handover, to supplement working capital and ease liquidity pressure.
  • Active negotiations with major creditor Westlake Electronics, including discussions on loan extensions, interest rate reductions, and potential debt-to-asset swaps. Some suppliers have agreed to extend payment terms, relieving short-term capital strain.
  • Successful renewal and extension agreements with banks for RMB 82.3 million of previously due borrowings, except for litigation with Hangzhou United Rural Commercial Bank.
  • Ongoing pursuit of new financing and cost optimization initiatives, including stricter administrative expense controls and workforce restructuring.
• Audit Scope Limitations – Trade Receivables:
  • Ongoing regular reconciliation with Banco Nacional de Cuba, which has confirmed the outstanding debt as of 31 December 2025. Despite Cuba’s foreign exchange shortages, the Group has recovered EUR 117,000 post year-end.
  • No impairment provision made for these receivables, as the debtor is a state bank that continues to acknowledge the debt and is making partial repayments. The delays are attributed to Cuba’s foreign exchange controls rather than credit risk deterioration.
• Audit Scope Limitations – Other Receivables:
  • Legal proceedings against former executive director Mr. Shao Ziming continue in the Hong Kong High Court. Asset freezing injunction remains in place. Mr. Shao’s Hong Kong assets are limited (HK\$396,000 in bank accounts and a car park valued at HK\$1.4 million). A property in Tsuen Wan has been repossessed by the mortgagee bank due to default.
  • The Group is seeking court-ordered bank statement disclosures to trace possible hidden assets and will reassess asset recovery prospects based on new information. The next court hearing is scheduled for 24 March 2026.
• Ongoing Commitment to Investors:
  • The Board reiterates its intention to provide quarterly updates on the status of resolving the disclaimer of opinion and will issue separate announcements for any significant developments.

Matters of Importance for Shareholders and Investors

• Potential Impact on Share Price:
  • The disposal of assets and successful refinancing efforts may stabilize the Company’s financial position and ease concerns about going concern risks.
  • Progress in recovering large outstanding receivables from Banco Nacional de Cuba and legal actions against Mr. Shao could positively influence the Company’s balance sheet if funds are collected.
  • However, ongoing litigation, uncertain timing of receivable recovery, and delays caused by external factors (such as Cuba’s foreign exchange situation) remain risks and could influence investor sentiment and share price.
• Audit Outcome and Listing Status:
  • The Company’s ability to address the auditor’s disclaimer and audit scope limitations is critical. Successful removal of these qualifications in future financial statements would likely be a positive catalyst for the share price and improve investor confidence.
• Ongoing Uncertainties:
  • Investors should remain vigilant regarding the Company’s announcements, as failure to resolve these issues in a timely manner could negatively impact the Company’s financial position and share value.

Board Statement and Caution

The Board emphasizes that it will continue to implement the action plan and keep shareholders regularly informed. Investors are advised to exercise caution when dealing in the shares of Jiu Rong Holdings Limited.

Company Leadership

As of the date of the announcement, the Executive Directors are Mr. Chen Yunxiang and Mr. Yan Zhendong, with Mr. Hua Nengdong serving as the Independent Non-executive Director.

Disclaimer: This article is based on the latest official announcement of Jiu Rong Holdings Limited and aims to inform investors of recent material developments. It does not constitute investment advice. Shareholders and potential investors should consider their own circumstances and consult professional advisors before making any investment decisions. The Company’s situation remains subject to ongoing legal and financial risks.

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