Hunan Baili Engineering Sci

ST Baili released its 2026 interim report. The company's total operating revenue was 138 million yuan, a year-on-year decrease of 73.21%. Net profit attributable to the parent company was negative 130 million yuan, with the loss widening year-on-year, a decrease of 77.8534 million yuan compared with the same period last year. Net cash inflow from operating activities was negative 16.9939 million yuan. The asset-liability ratio rose to 103.86%, gross margin fell to 7.26%, and diluted earnings per share was negative 0.27 yuan. The company had 19,600 shareholders, and the top ten shareholders held 31.16% of total share capital.

The remaining 28.5572 million shares held by Tibet Xinhai Xin Venture Capital Co., Ltd., the former controlling shareholder of ST Baili, representing 5.82% of the company's total share capital, will be publicly auctioned on the JD.com judicial auction online platform of the Beijing Financial Court from September 15 to 16, 2026, with a starting price of approximately 86.16 million yuan. If this auction is successful and the transfer is completed, Xinhai Xin will no longer hold any shares in the company. Previously, Xinhai Xin had 40.0092 million shares, 48.0788 million shares, and 29.4692 million shares auctioned in September 2024, October 2025, and June 2026 respectively. Of these, the 29.4692 million shares completed transfer on July 8, 2026, reducing its shareholding ratio to 5.82%. The company's largest shareholder changed to Hunan Paile Technology Co., Ltd., holding 11.85%, and the company is now in a state of having no controlling shareholder and no actual controller. In addition, ST Baili has recently been entangled in litigation, with the cumulative amount of new lawsuits and arbitration cases involving the company and its controlling subsidiaries totaling 12.8652 million yuan. In the first quarter of 2026, ST Baili achieved revenue of 88.01 million yuan, a year-on-year decline of 72.33%, and a net loss attributable to the parent company of 47.75 million yuan, with the loss widening by 54.27% year-on-year.

ST Baili's board of directors approved the 2026 annual routine related-party transaction forecast proposal with Pailer Nano by a vote of four in favor and one abstention. The abstention came from company director and vice president Huo Peng. The proposal plans to purchase equipment and services from Pailer Nano and its controlled subsidiaries for no more than 70 million yuan, and to sell equipment and services to them for no more than 70 million yuan. Huo Peng's reason for abstaining was that Pailer Nano is not the end user, which could create horizontal competition, and that the listed company has essentially no procurement business due to insufficient orders on hand. Previously, at the April board meeting, Huo Peng had also abstained on this proposal, and at the June shareholders' meeting the proposal was even rejected. This time it is being resubmitted for deliberation.

ST Baili has recently received notices of response for two lawsuits, with the total amount involved reaching approximately 294 million yuan. Both cases have been filed and accepted but have not yet gone to trial. One is a construction contract dispute with Sichuan Haichuang Shangwei New Energy Technology, in which the plaintiff seeks to terminate the EPC general contracting agreement and claims around 244 million yuan. The other is a financial loan contract dispute with China Construction Bank Yueyang Branch, where the plaintiff demands repayment of 50 million yuan in loan principal and joint liability from related parties. The company was previously sued by SPD Bank over a financial loan contract dispute involving over 70 million yuan. ST Baili has posted losses for three consecutive years, with first-quarter 2026 revenue down 72.33 percent year-on-year and a debt-to-asset ratio of 99.15 percent. Its shares have been subject to other risk warnings since April 28.

ST Baili disclosed its earnings forecast, expecting a net loss attributable to the parent company of 100 million to 150 million yuan in the first half of 2026, compared with a loss of 52.0983 million yuan in the same period last year. The net loss after deducting non-recurring items is expected to be 99.5 million to 149 million yuan, compared with a loss of 52.1925 million yuan in the same period last year. The company attributed the expected loss to the combined impact of a downcycle in the industry and its own risk factors. Both its main businesses, new energy and traditional energy, are under operational pressure. At the same time, after initiating out-of-court restructuring proceedings, the company's stock was again subject to other risk warnings, and damaged market credit led to hindered business expansion. Weak industry demand and credit risk created a negative transmission, causing a significant contraction in revenue scale. The progress of acceptance and settlement of existing projects was delayed, the number of new projects undertaken dropped sharply, and rigid fixed operating costs could not be reduced in tandem. Coupled with an increase in provisions for impairment of accounts receivable, the loss ultimately widened year-on-year.