258 Million Acquisition of Photovoltaic Receivables Impaired by Over Half: Hongxiang Stock Disposes of Related Assets for 120 Million, Recognizes 37 Million Impairment

On March 13, Hongxiang Co., Ltd. (Rights Protection) (300427) announced that the company has approved the acquisition of 100% equity and debt handling of Nantong Hanlan New Energy. The company will acquire all equity of the target company at no cost, while Nantong Hanlan and seven related project companies are required to pay 120 million yuan within 30 working days to settle debts owed to the company. After debt settlement, the company will resell the equity to Fujian Mingao.

The announcement shows that this transaction is a key part of the company’s photovoltaic project asset disposal. In 2023, Hongxiang Co., Ltd. acquired accounts receivable claims for distributed photovoltaic projects in Rugao for 258 million yuan. Due to declining construction costs of photovoltaic power stations, falling electricity prices, and macroeconomic impacts, these claims have continued to depreciate, with a book value of 205 million yuan by the end of 2025. After this disposal, the company expects to recognize an impairment loss of about 37 million yuan, with total impairments reaching 103.6 million yuan. The related impacts have been included in the 2025 earnings forecast and interim report.

According to the transaction plan, after Hongxiang Co., Ltd. acquires Nantong Hanlan’s equity, it will assume corresponding paid-in capital obligations. The target company will initiate changes in business registration within three working days and transfer licenses, seals, and other materials. After debt repayment, the company will transfer 100% equity of Nantong Hanlan to Fujian Mingao for 120 million yuan, completing the asset divestment of the photovoltaic project.

Hongxiang Co., Ltd. stated that this transaction does not constitute a related-party transaction or major asset restructuring and will have minimal impact on the financial position and operating results in 2026. However, the announcement also notes that technical rectifications of the target project may adjust the transaction price, and there are uncertainties regarding the progress of delivery and the performance of the transaction parties.

In the first three quarters of 2025, Hongxiang Co., Ltd. achieved revenue of 488 million yuan and net profit attributable to the parent of 62.29 million yuan.