Core Viewpoint - Wuxi Xuelang Environmental Technology Co., Ltd. is facing severe financial difficulties, leading to a pre-restructuring application by creditor Jiangsu Xinniu Cable Co., Ltd. due to the company's inability to repay debts and lack of repayment capacity, although it has restructuring value [1] Financial Performance - As of September 30, 2025, the company's total assets decreased to 2.29 billion, down 16.26% from 2.735 billion at the end of 2024; total liabilities increased to 2.143 billion, with the debt-to-asset ratio rising from 89% to 93.6% [1] - The equity attributable to the parent company dropped significantly to 82.41 million, a decrease of 65.65% from 240 million at the end of 2024 [1] Profitability Issues - For the first nine months of 2025, the company reported revenue of 263 million, a year-on-year decline of 33.51%; the net loss attributable to shareholders was 158 million, although it was an improvement from the full-year loss of 464 million in 2024 [2] - Cumulative losses have persisted for several years, with undistributed profits at -427 million by the end of 2024, exceeding the paid-in capital of 333 million, necessitating shareholder meeting review as per company law [2] Impairment Losses - The root cause of the losses includes significant impairment losses from underperforming acquisitions, with 519 million and 104 million impairment recorded for Nanjing Zhuoyue Environmental Technology Co., Ltd. and Shanghai Changying Environmental Service Co., Ltd. respectively [2] - In 2024, additional impairments of 30 million for Nanjing Zhuoyue's asset group and 18 million for Shanghai Changying's goodwill were also recorded [2] Operational Challenges - The suspension of the solid waste resource utilization project by Nanjing Zhuoyue led to an asset impairment loss of 14.25 million in 2024 [3] - The company's main business is under pressure due to macroeconomic conditions and intensified industry competition, resulting in declining gross margins in the environmental equipment and hazardous waste disposal sector [3] - Delays in project execution and collection cycles have exacerbated cash flow issues, creating a vicious cycle of declining revenue, tight cash flow, and debt defaults [3] Future Outlook - The board of directors stated that the company will actively respond to the pre-restructuring application in accordance with the Enterprise Bankruptcy Law, aiming to maintain stable daily operations regardless of the outcome [3] - The acceptance of the pre-restructuring application by the Wuxi Intermediate People's Court will be a critical first step in determining the company's future [3]