HULUWA(SH:605199) Mei Ri Jing Ji Xin Wen·2025-12-29 08:13Core Viewpoint - ST HuLuWa's recent announcement regarding the investigation by the China Securities Regulatory Commission (CSRC) due to alleged information disclosure violations has led to a significant decline in its stock price, highlighting ongoing operational challenges and internal control deficiencies [1][2]. Financial Performance - In 2024, the company's total operating revenue decreased by 21.26%, and it reported a net loss of 274 million yuan, marking a staggering year-on-year decline of 2629.23% [1]. - The Q3 2025 report indicated a continued revenue decline of 33.88%, with a net loss attributable to shareholders of 11.21 million yuan [1]. Internal Control Issues - In April 2025, the company received an audit report with a disclaimer of opinion regarding its internal control over financial reporting, leading to risk warnings on its stock [2]. - The Shanghai Stock Exchange criticized the company for inaccuracies in multiple financial reports, with significant amounts involved and high correction ratios, implicating the former chairman and CFO in the violations [2]. Shareholder Concerns - The controlling shareholder's nearly 24 million shares have been judicially frozen, raising concerns about the stability of control and the company's future financing capabilities [2]. Industry Implications - The case of ST HuLuWa serves as a warning to other listed companies about the importance of robust internal controls and accurate information disclosure, as lapses can lead to significant risks [3]. - The company must cooperate with the CSRC investigation, identify root causes of issues, and implement effective corrective measures to restore market confidence [3].