Group 1 - ST Huaxi announced the resignation of Secretary of the Board Meng Haitao due to personal reasons, while he will continue to serve as a director, vice president, and CFO [1] - Meng Haitao's resignation follows a public reprimand from the Shenzhen Stock Exchange due to significant discrepancies between the company's 2024 profit forecast and the audited net profit [4][5] - The company has faced continuous losses over the past years, with cumulative losses of approximately 2.446 billion from 2020 to 2024, despite revenue growth in 2023 and 2024 [2] Group 2 - The company reported a major revision in its 2024 profit forecast, initially predicting a profit of 35 million but later adjusting it to a loss of 3.81 billion [2] - An internal control audit report issued by Sichuan Huaxin (Group) CPA firm expressed an inability to provide an opinion, leading to risk warnings on the company's stock [3] - The company’s stock faced significant declines, including a trading halt and nine consecutive days of limit-down after the release of the 2024 annual report [3]

Core Viewpoint - ST Huaxi is facing significant challenges, including a ten-day stock price decline and the detention of its actual controller, Li Renchao, which raises concerns about the company's governance and future performance [1][4]. Group 1: Company Governance - ST Huaxi announced that Li Renchao has been detained and is no longer holding any positions within the company or its subsidiaries [4]. - The company’s board of directors and management are functioning normally, and there has been no change in control [4]. - Li Renchao submitted his resignation on May 17, citing personal reasons, and has since been removed from all roles within the company [4]. Group 2: Financial Performance - ST Huaxi has reported continuous losses over the past five years, with total losses exceeding 2.4 billion yuan from 2020 to 2024 [8]. - In Q1 of this year, the company achieved a revenue of 696 million yuan, a year-on-year decrease of 15.15%, and a net profit of 17 million yuan, down 63.8% year-on-year [8]. Group 3: Stock Performance - The stock price of ST Huaxi has been on a downward trend since April 28, experiencing a cumulative decline of over 43%, dropping from 4.02 yuan per share to a low of 2.28 yuan [9]. - Following the announcement of Li Renchao's detention, the stock price saw a rebound, closing at 2.57 yuan per share after hitting the daily limit up [9].

Core Points - ST Huaxi's chairman Li Renchao resigned and was subsequently detained, raising significant concerns in the capital market [1][5] - The company announced that Li Renchao will no longer hold any positions within the company or its subsidiaries [5][6] Group 1: Resignation and Detention - On May 20, ST Huaxi disclosed that the board received a notice from the local supervisory committee regarding the detention and investigation of its controlling shareholder and actual controller, Li Renchao [5] - Li Renchao submitted a written resignation report on May 17, citing personal reasons for stepping down from all his roles, including chairman and president [5][6] - Following his resignation, Li Renchao holds 149 million shares, representing 12.62% of the company's total shares [5] Group 2: Company Operations and Financial Performance - Despite the leadership changes, the company stated that its board members and senior management are functioning normally, and there has been no change in control [6] - ST Huaxi's stock has been under risk warning since April 30, 2025, due to an internal control audit report that received a disclaimer of opinion [8] - For Q1 2025, ST Huaxi reported total revenue of 696 million yuan, a year-on-year decrease of 15.15%, and a net profit attributable to shareholders of 16.85 million yuan, down 63.80% [10]