Core Viewpoint - Longzhou Co., Ltd. (龙洲股份) announced two significant lawsuits involving its subsidiary Dongguan Zhongqi Hongyuan Automobile Co., Ltd. (中汽宏远) due to contract disputes related to electric bus battery failures, with total claims amounting to approximately 431 million yuan [3][6][7]. Group 1: Lawsuit Details - The lawsuits involve two plaintiffs: Dongguan Bus Co., Ltd. (东莞巴士有限公司) and Dongguan City Bus Transportation Co., Ltd. (东莞市城巴运输有限公司), with claims of 205 million yuan and 226 million yuan respectively [6]. - The core issue stems from battery failures in electric buses sold in 2018, leading to operational disruptions starting from 2021 [7]. - Both plaintiffs are seeking compensation for losses due to vehicle downtime, legal fees, and other related costs, with specific demands for warranty obligations to be fulfilled by Zhongqi Hongyuan [7][8]. Group 2: Company Background - Zhongqi Hongyuan is the only automobile manufacturer in Dongguan with qualifications for both traditional and new energy vehicles, focusing on electric buses and other electric vehicles [11]. - The company was established in October 2013, with a registered capital of 120 million yuan, and is recognized as a national high-tech enterprise [11][12]. - Longzhou Co., Ltd., the parent company, has faced financial difficulties, reporting losses for three consecutive years, with a net loss of approximately 35.2 million yuan in 2023 [14].

Core Viewpoint - Longzhou Co., Ltd. (龙洲股份) disclosed two significant lawsuits involving its subsidiary Dongguan Zhongqi Hongyuan Automobile Co., Ltd. (中汽宏远) due to sales contract disputes, with the cases currently in the first instance awaiting judgment [2][11]. Group 1: Lawsuit Details - Zhongqi Hongyuan is the defendant in two lawsuits filed by Dongguan Bus Co., Ltd. and Dongguan City Bus Transportation Co., Ltd., with the amounts involved being 205 million yuan and 226 million yuan respectively, totaling approximately 431 million yuan [8][10]. - The lawsuits stem from issues related to battery failures in electric buses sold by Zhongqi Hongyuan in 2018, which led to significant operational disruptions starting in 2021 [10][12]. Group 2: Company Actions and Financial Implications - Longzhou Co., Ltd. stated that Zhongqi Hongyuan has reached agreements with the plaintiffs regarding warranty and repair matters, and has completed the necessary maintenance work [11]. - The company has made provisions for the repair costs associated with the affected buses in the 2024 fiscal year [11]. - Longzhou Co., Ltd. reported that the total amount of other undisclosed minor lawsuits and arbitration matters is 83.2852 million yuan, accounting for 7.16% of the company's audited net assets for 2024 [11]. Group 3: Financial Performance - Longzhou Co., Ltd. has experienced three consecutive years of losses, with net losses reported at 79.2269 million yuan, 352 million yuan, and 348 million yuan for the years 2022 to 2024 [17]. - For the first three quarters of 2025, the company reported revenue of 1.825 billion yuan, a year-on-year decrease of 26.61%, and a net profit attributable to shareholders of -95.6357 million yuan, down 32.45% year-on-year [20].

Core Viewpoint - Longzhou Co., Ltd. (龙洲股份) faces significant legal challenges due to lawsuits involving its subsidiary, Zhongqi Hongyuan, related to contract disputes over electric buses, with total claims amounting to approximately 431 million yuan [1][2]. Group 1: Legal Issues - Zhongqi Hongyuan is being sued by Dongguan City Bus Transportation Co., Ltd. and Dongguan Bus Co., Ltd. for a total of 431 million yuan due to battery failures in electric buses supplied by Weihong Company [1][2]. - The lawsuits stem from the sale of 422 and 250 electric buses in 2018, which have experienced significant battery issues leading to operational disruptions [2][4]. - Zhongqi Hongyuan has acknowledged the need to fulfill warranty obligations and compensate for losses incurred due to the bus failures [2][3]. Group 2: Financial Impact - As of the announcement date, the impact of these lawsuits on the company's current and future profits remains uncertain [2]. - Longzhou Co., Ltd. has reported continuous financial losses over the past three years, with net losses of 79.23 million yuan, 352 million yuan, and 348 million yuan for the years 2022 to 2024, respectively [6]. - For the first three quarters of 2025, the company reported a revenue of 1.825 billion yuan, a year-on-year decline of 26.61%, and a net loss of 95.64 million yuan, down 32.45% year-on-year [8]. Group 3: Company Overview - Longzhou Co., Ltd. was listed on the Shenzhen Stock Exchange in June 2012 and operates in modern logistics, automotive manufacturing and services, public transportation, and fuel sales [5]. - The company has faced additional minor lawsuits and arbitration cases totaling approximately 83.29 million yuan, representing 7.16% of its audited net assets for 2024 [5].