Group 1 - The company *ST Zhongcheng will enter a delisting period starting June 30, 2025, lasting for 15 trading days, with the last trading day expected to be July 18, 2025 [2] - The company reported significant asset impairment in its overseas photovoltaic projects, leading to a negative net asset position and the issuance of a "*ST" warning [3] - A debt waiver of 850 million yuan from three state-owned enterprises was granted to the company, but an audit revealed that a substantial portion of the assets related to the Philippine photovoltaic project was impaired and lacked recoverable evidence [3] Group 2 - The company has been implicated in financial misconduct, with the China Securities Regulatory Commission revealing false financial data related to its Philippine projects from 2017 to 2022, resulting in inflated revenues and profits [4] - The company failed to disclose significant litigation involving its Indonesian subsidiary in 2023, indicating serious information disclosure violations [4]

Core Viewpoint - The termination of *ST Zhongcheng's stock listing by the Shenzhen Stock Exchange is primarily due to its negative net assets for the fiscal year 2023, leading to a series of non-standard audit opinions and ongoing issues related to its overseas projects, particularly in the Philippines [2][4][12]. Group 1: Financial Issues - *ST Zhongcheng has received non-standard audit opinions for six years since its listing in 2011, with the most recent three years being linked to risks associated with its Philippine project [2][4]. - The company's net assets were reported as negative for the fiscal year 2023, triggering a delisting warning for 2024 [2]. - As of the end of 2023, the book value of the photovoltaic project contract assets related to the Philippine project was 1.176 billion yuan, with a provision for impairment of 654 million yuan [6][7]. Group 2: Philippine Project Challenges - The Philippine project, which was contracted for approximately 438 million USD (about 3 billion yuan), has faced numerous delays and issues, including changes in construction timelines and payment methods [4][9]. - A settlement agreement was signed in April 2024, stipulating that the settlement amount would be paid over 25 years, raising concerns about the feasibility of this long-term repayment plan [9][10]. - The company has been criticized for not fully recognizing impairment losses related to the Philippine project, potentially inflating its asset values [11]. Group 3: Revenue Recognition Issues - From 2017 to 2021, *ST Zhongcheng was found to have falsely recorded financial data related to the Philippine project, including premature revenue recognition [12]. - The company confirmed revenue of 1.417 billion yuan in 2017 based on the percentage of completion method, despite not meeting payment conditions [5][6]. - The wind power project within the Philippine project was terminated in 2021, with outstanding settlement amounts still due, highlighting ongoing financial discrepancies [13].

Core Viewpoint - *ST Zhongcheng has been notified by the China Securities Regulatory Commission (CSRC) regarding administrative penalties due to false records in annual reports from 2017 to 2022, which may lead to mandatory delisting risks due to significant violations of the rules [2][3][4]. Financial Performance - In 2024, *ST Zhongcheng reported total operating revenue of 137 million, a decrease of 70.21% year-on-year [5][7]. - The net profit attributable to shareholders was -310 million, an increase in loss of 73.24% compared to the previous year [5][8]. - Total assets at the end of 2024 were approximately 2.63 billion, down 17.35% from the previous year [7]. - The net assets attributable to shareholders improved to approximately 173 million, a 147.26% increase from a negative net asset position in 2023 [7]. Regulatory Issues - The CSRC's notice indicates that *ST Zhongcheng's financial data related to its projects in the Philippines and Indonesia contained false records, including premature revenue recognition and failure to write off revoked mining rights [3][4]. - The company failed to disclose significant litigation matters in a timely manner, with a lawsuit amounting to 627 million (57.47% of 2022 net assets) disclosed late in 2023 [4]. - The CSRC plans to impose a total fine of 19 million on *ST Zhongcheng and its responsible personnel for these violations [4].