Core Viewpoint - The company Oriental Fashion Driving School Co., Ltd. (ST Dongshi) is facing significant financial distress, having initiated a pre-restructuring process due to its inability to repay debts and a lack of solvency, which could lead to delisting from the stock exchange [2][5][12]. Group 1: Pre-restructuring Process - The pre-restructuring process was initiated by a creditor's application, citing ST Dongshi's inability to repay due debts and a lack of repayment capacity, despite having restructuring value [5]. - The Beijing First Intermediate People's Court has appointed a temporary management team from the company's liquidation group to oversee the pre-restructuring period [2][5]. - ST Dongshi has acknowledged the creditor's application and voluntarily accepted the obligations related to the pre-restructuring [5]. Group 2: Financial Situation - As of December 31, 2024, the controlling shareholder and related parties have occupied approximately 387 million yuan of the company's funds through non-operational means, with no repayments made to date [5][6]. - The company has reported continuous losses for three consecutive years, with revenues of 1 billion yuan in 2022, 1.042 billion yuan in 2023, and 807 million yuan in 2024, alongside net losses of 60 million yuan, 362 million yuan, and 903 million yuan respectively [13][14]. - The total assets of ST Dongshi have decreased by 16.75% from the previous year, amounting to approximately 4 billion yuan as of the end of 2024 [14]. Group 3: Risk of Delisting - If ST Dongshi fails to recover the occupied funds by June 19, 2025, the Shanghai Stock Exchange will suspend trading of its stock and convertible bonds [7]. - Should the company remain non-compliant within two months of suspension, it will face delisting risk [7]. - The stock price was recorded at 2.95 yuan per share, with a total market capitalization of approximately 2.109 billion yuan before the suspension [7]. Group 4: Company Background - Oriental Fashion Driving School Co., Ltd. was established in 2005 and is recognized as a leading enterprise in the national driver training industry, being the only driving school in Beijing capable of providing training for all vehicle types [15].

Core Viewpoint - The company, Oriental Fashion Driving School Co., Ltd. (ST Dongshi), known as the "driving school leader," is facing potential delisting as it enters a pre-restructuring process initiated by the Beijing First Intermediate People's Court due to its inability to repay debts and lack of solvency [2][5]. Group 1: Pre-restructuring Process - The pre-restructuring process was initiated following an application from creditor Beijing Guofeng Jianye Construction Engineering Co., Ltd., citing ST Dongshi's inability to repay due debts and its lack of repayment capacity, although it possesses restructuring value [5]. - The court's agreement to the pre-restructuring does not equate to a formal restructuring process, and issues such as fund occupation by controlling shareholders must be resolved before entering formal restructuring [6][8]. - As of December 31, 2024, the controlling shareholder and its affiliates have occupied approximately 387 million yuan of company funds through non-operational means, with no repayments made to date [6][7]. Group 2: Delisting Risk - If ST Dongshi fails to recover the occupied funds within six months (by June 19, 2025), the Shanghai Stock Exchange will suspend trading of its stock and convertible bonds [10]. - Should the company not rectify the situation within two months post-suspension, it will face a delisting risk warning, and if unresolved within another two months, the stock will be terminated from trading [11]. - As of the last trading day before suspension, ST Dongshi's stock price was 2.95 yuan per share, with a total market capitalization of 2.109 billion yuan [12]. Group 3: Financial Performance and Investigations - ST Dongshi has reported continuous losses for three consecutive years, with revenues of 1 billion yuan, 1.042 billion yuan, and 807 million yuan from 2022 to 2024, and net losses of 60 million yuan, 362 million yuan, and 903 million yuan respectively [17]. - The company is under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure, with no conclusive findings reported yet [17]. - Internal control issues have been highlighted, with the company receiving negative opinions on the effectiveness of its internal controls for the fiscal years 2023 and 2024 [17].

Core Viewpoint - ST Dongshi, known as the "driving school leader," is under investigation by the China Securities Regulatory Commission (CSRC) for suspected violations of information disclosure laws, marking a significant regulatory concern for the company [2][5]. Group 1: Regulatory Investigation - On May 30, ST Dongshi received a notice from the CSRC regarding the initiation of an investigation due to alleged information disclosure violations [5]. - This investigation follows a previous warning from the Beijing Securities Regulatory Bureau for failing to return raised funds to a designated account on time [2][5]. - The company has faced internal control issues, with its 2024 financial report receiving a negative opinion from auditors regarding the effectiveness of internal controls [6][5]. Group 2: Financial and Operational Challenges - ST Dongshi reported a significant decline in its first-quarter revenue, amounting to 138 million yuan, a year-on-year decrease of 26.31% [10]. - The company incurred a net loss attributable to shareholders of 48.02 million yuan in the first quarter, compared to a loss of 35.11 million yuan in the same period last year [10]. - The company is also dealing with substantial non-operational fund occupation by its controlling shareholder, amounting to approximately 220 million yuan, which has not been repaid as of May 30 [6][7]. Group 3: Internal Control and Management Issues - ST Dongshi's internal control deficiencies include significant flaws, fund occupation, and violations of related party transactions [6]. - The company has faced challenges in managing its transactions with related parties, as evidenced by failed attempts to regularize these transactions through shareholder meetings [8]. - There are ongoing issues with the procurement of VR driving training simulators, which have not been fully delivered, highlighting management and risk control weaknesses [8]. Group 4: Market Position and Company Background - ST Dongshi, established in 2005 and headquartered in Beijing, is a leading enterprise in the national driver training industry and the only A-share listed driving school in Beijing [10]. - The company operates on a 3,000-acre site in Beijing, recognized by the World Record Association as the "largest driving training institution globally" [10]. - As of May 30, ST Dongshi's stock price was 2.74 yuan per share, with a total market capitalization of 1.959 billion yuan [11].