Core Viewpoint - Huaci Co., Ltd. (001216.SZ) clarified its loan transfer arrangements and compliance with subsequent loans in response to the Shenzhen Stock Exchange's inquiry, emphasizing the commercial logic behind these arrangements and the ongoing ASEAN ceramic valley project in Vietnam with a total investment of approximately 1.438 billion yuan [1][2] Group 1: Loan Details - The company plans to apply for an 800 million yuan loan from the Bank of China to meet funding requirements for its overseas investment project, as its own deposits are insufficient to cover the total investment [1] - The Bank of China Hunan Branch issued a loan intention letter on March 24, 2025, and the company received a 90 million yuan working capital loan from the Zhuzhou Branch on March 28, 2025 [1] Group 2: Loan Transfer Explanation - Due to regulatory changes from the China Banking and Insurance Regulatory Commission in 2021, most banks now require entrusted payments for operational loans, which conflicts with the company's need for multiple small payments in daily procurement [1] - To comply with the entrusted payment regulations, the company executed a loan transfer operation where funds were first paid to a designated supplier, Huacai Packaging, and then returned the next day for daily operational liquidity [1] Group 3: Compliance and Commitments - The company confirmed that, apart from the 90 million yuan loan, no other loans were processed, and no new loan transfers occurred, despite the transfer not aligning with the Loan Regulations [2] - The funds did not flow into prohibited investment areas such as securities, equity investments, or real estate, and the company has repaid the loan in full [2] - The Bank of China Zhuzhou Branch confirmed there were no disputes regarding the loan, and the central bank's Zhuzhou branch has not imposed penalties on the company since January 2022 [2] - The company and its actual controller, Xu Junqi, have committed to avoiding loan transfers in the future, with the controller agreeing to bear any potential losses arising from such transfers [2]