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Liannestone Aviation Technology Co., Ltd. 2025 Annual Report Summary
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Securities Code: 000697 Stock Abbreviation: ST Lian Shi Announcement No.: 2026-010
This summary of the annual report is derived from the full annual report. To fully understand the company’s operating results, financial condition, and future development plans, investors should carefully read the full annual report on the media designated by the China Securities Regulatory Commission.
All directors attended the board meeting that reviewed this report.
Non-standard audit opinion reminder
□ Applicable √ Not applicable
Board-approved profit distribution plan or capital reserve transfer plan for the reporting period
□ Applicable √ Not applicable
The company plans not to distribute cash dividends, not to send bonus shares, and not to increase capital through capital reserves.
Board-approved preferred stock profit distribution plan for the reporting period
□ Applicable √ Not applicable
As of the end of the reporting period, the company’s parent company’s reported undistributed profits are -3,712,579,679.53 yuan; at the consolidated level, undistributed profits are -4,091,256,043.74 yuan. The large accumulated losses mean the company cannot meet the conditions for dividend distribution for a long period, so investors should be aware of related risks.
Basic Information of the Company
Company Profile
■
Lian Shi Aviation is a manufacturing company mainly engaged in processing and manufacturing civil aircraft components, with core businesses including the precise casting of single-crystal blades for aircraft engines and gas turbines. Main products include aerospace precision parts, structural components, and single-crystal turbine blades. These include leading edges of aircraft wings, engine nacelle hangers, takeoff and landing equipment, oil pump covers, as well as wing spars, ribs, wing surfaces, wing beams, large wing frames, fuselage frames, cabin floor beams, seat rails, and door assemblies, mainly used in wide-body and narrow-body commercial aircraft. Single-crystal turbine blades are mainly used in aircraft engines and gas turbines.
(1) Market Position of the Company’s Products
The company’s wholly owned subsidiary, Chengdu Hangyu, possesses key technology for the “Single Crystal Turbine Blade Preparation” project under the national “Two Engines” special project, making it one of the few domestic enterprises capable of mass production and delivery of finished single-crystal turbine blades. The quality of related products is highly recognized by customers, and due to strong downstream market growth demand, Chengdu Hangyu has entered an expansion and production increase phase.
Another wholly owned subsidiary, Gardner Aerospace, covers the full range of Airbus models, with a large etching production line overseas. It is one of the few global companies capable of producing ultra-long special components for Airbus, ranking among the top in the field of precision aerospace parts for Airbus. Its revenue has grown in tandem with the recovery of the global aviation market.
(2) Industry Position of the Company
The upstream of the aerospace manufacturing industry mainly involves raw materials such as aluminum alloys, titanium alloys, high-strength steels, and other composites, including carbon fibers and high-temperature alloys. The midstream mainly includes aircraft fuselage, engines, and onboard systems (such as avionics and electromechanical systems), accounting for approximately 36%, 22%, 17%, and 13% of value respectively. Aircraft engines are the most critical subsystem, with the highest technological content and manufacturing difficulty. The downstream involves the assembly, sales, and MRO (maintenance, repair, and operation) of aircraft, mainly civil and military. Gardner, as a midstream company, faces many competitors. Due to the “main manufacturer-supplier” model in large aircraft manufacturing, downstream customers are relatively concentrated, with Airbus accounting for a large proportion of sales, leading to high dependence. However, Gardner has been awarded the Airbus D2P “Global Partner” title for consecutive years. Chengdu Hangyu also operates in the midstream, having undertaken research and production of single-crystal blades for key aircraft and engine projects, and was recognized as a “Key Little Giant” in 2025, entering capacity ramp-up.
The company’s main business is providing precision parts and structural components to civil aircraft and engine manufacturers. Since aerospace parts are sensitive in technology and policy, and most revenue is from overseas, the business involves extensive cross-border trade. Changes in international political environment and supply chain challenges may lead to loss of key overseas customers or suppliers, order adjustments, or delivery delays, adversely affecting normal operations and performance.
According to Airbus’s 2025 financial report, 793 aircraft were delivered in 2025, covering 91 customers worldwide. Airbus expects that global trade, the economy, air transport, supply chain, and internal operations will not be further disturbed, with deliveries possibly exceeding 870 aircraft in 2026, and monthly production of A320 series increasing to 75 by 2027. The global factory network and Chengdu flagship plant will better meet delivery challenges, potentially boosting company performance.
Boeing, in 2025, turned profitable due to increased deliveries, order recovery, and strategic asset disposals, but delivery volume remains below historical highs and Airbus’s level. Boeing still faces challenges such as lower-than-expected deliveries in China, ongoing quality and safety pressures, rising project costs, and financial risks. Until production capacity and safety are balanced, some airlines may shift orders to competitors like Airbus and COMAC, which could alter supply chain and market dynamics. This may lead to more procurement from Airbus, positively impacting the company’s performance.
Additionally, China’s domestically developed civil aircraft have completed the full cycle of design, manufacturing, testing, integration, certification, delivery, and operation, marking entry into high-end manufacturing. The C919’s delivery volume increased steadily in 2025, with over 1,500 orders worldwide. The C929 has completed overall design, and prototypes are under steady development. The CJ-1000A is in the final certification stage. The civil aviation industry in China is booming, and the company is expanding domestic business, establishing a dual domestic-international industrial chain, and breaking the current supplier concentration.
(3) Business Plan
After completing judicial restructuring, the company has shed heavy debt burdens, with a debt-to-asset ratio well below industry average, enabling “lightweight” development. The company will focus on high-end aerospace equipment manufacturing, aiming to turn losses into profits in existing businesses and acquire high-quality assets to enhance sustainable operation and profitability.
Accelerate Industry Development. The company has made significant breakthroughs and will further focus on commercial aircraft structural parts, utilizing existing capacity, controlling costs, expanding processing capabilities, and developing domestic and international projects and new aircraft platforms. It will continue negotiations for renewals and price increases, shift cost centers, invest in supply chain improvements, digitize processes, and promote intelligent manufacturing to improve delivery efficiency. It will expand capacity for high- and low-altitude engines and gas turbines, strengthen market development in China, and improve product quality and supply chain independence.
Optimize Industry Layout. Post-restructuring, the company will focus on high-end aerospace manufacturing, aligning with its resource advantages, complying with regulatory and state-owned asset management requirements, and actively acquiring high-tech, high-value-added assets in segments like engine components, aircraft structures, military electronics, composites, additive manufacturing, commercial space, and low-altitude economy. It aims to reserve potential high-quality assets and expand industry investment.
Cost Reduction and Efficiency. The company will improve cost control plans, set clear targets, implement detailed control measures, and transfer work packages to lower-cost regions to reduce expenses. It will accelerate price negotiations with major clients for new work packages, implement price transmission mechanisms, and leverage capacity integration and factory divestments to improve profitability.
Activate Existing Assets. The company will gradually exit non-core areas, dispose of inefficient assets, utilize surplus capacity, develop domestic and provincial markets, and enhance equipment and factory utilization. It will mobilize resources, leverage regional advantages, and foster industrial synergy to create new growth points.
Promote “Smart Transformation.” The company will phase in “smart transformation” initiatives, leveraging Gardner’s infrastructure, automation, and spacious facilities to build an advanced intelligent manufacturing plant. It aims to reduce manual processes, improve digital management of materials, production scheduling, training, and maintenance, and develop a data-driven, efficient, agile, green, and sustainable new generation of smart manufacturing.
(4) Possible Risks
The company’s aerospace business is developing positively, mainly from overseas markets. Since aerospace parts are sensitive to technology and policy, the company must comply with local laws, international standards, and Chinese policies. Changes in the international environment could increase costs and affect operations.
The aerospace manufacturing industry is capital- and technology-intensive with high entry barriers. The downstream civil aircraft market is mainly monopolized by Boeing and Airbus. Major customers are generally these two companies, with high revenue dependence. If Airbus reduces orders or if Gardner’s products are replaced, revenue could decline, impacting performance.
The company’s goodwill on the books is 2.467 billion yuan, with accumulated impairment of 2.112 billion yuan. If Gardner’s performance continues below expectations, goodwill may need further impairment.
Most revenue comes from Gardner, whose operations and key clients are worldwide, with settlement currencies including GBP, USD, EUR, PLN, and INR. Fluctuations in exchange rates could lead to foreign exchange gains or losses. Gardner has entered forward contracts to hedge some foreign exchange risks. Since the company’s consolidated reporting currency is RMB, exchange rate changes between GBP/USD/EUR and RMB could affect financial statements.
(1) Major Financial Data and Indicators for the Past Three Years
Does the company need to retrospectively adjust or restate previous years’ data?
□ Yes √ No
Unit: Yuan
■
(2) Key Quarterly Financial Data
Unit: Yuan
■
Are these indicators significantly different from the quarterly or semi-annual reports already disclosed?
□ Yes √ No
(1) Top 10 Shareholders and Shareholders with Voting Rights Restored
Unit: Shares
■
Shareholders holding over 5%, top 10 shareholders, and top 10 unrestricted circulating shareholders involved in securities lending
□ Applicable √ Not applicable
Changes in share lending/return due to securities lending for top 10 shareholders and unrestricted shareholders
□ Applicable √ Not applicable
(2) Total Preferred Shareholders and Top 10 Preferred Shareholders
□ Applicable √ Not applicable
No preferred shareholders held shares during the reporting period.
(3) Ownership and Control Relationship Diagram
■
□ Applicable √ Not applicable
Major Matters
The company held the 13th meeting of the 11th Board of Directors on January 3, 2025, and the 1st extraordinary general meeting of 2025 on January 21, 2025, where it approved the proposal for court restructuring and pre-restructuring. Due to ongoing losses, high debt, short-term repayment pressure, and rising debt ratio, the company cannot repay maturing debts and lacks repayment ability but considers restructuring valuable given its ongoing operations and industry layout. The board believes the conditions for applying for restructuring under the Bankruptcy Law are met and decided to file for court restructuring.
On June 6, 2025, the company received a decision from the Chengdu Intermediate People’s Court (hereafter “Chengdu Court”) to initiate pre-restructuring, appointing Beijing King & Wood Mallesons (Chengdu) as temporary administrator during the process.
On September 23, 2025, the company received the court’s civil ruling and decision to accept the restructuring application, with the same law firm appointed as administrator.
On November 12, 2025, the court approved the restructuring plan and terminated the process.
On November 25, 2025, the company announced the implementation of the capital reserve transfer plan, converting a total of 522,987,424 shares from capital reserve based on the current total share capital of 873,100,876 shares, at a ratio of 5.99 shares per 10 shares. The total share capital after transfer will be 1,396,088,300 shares. The transferred shares will not be distributed to original shareholders but will be allocated and disposed of by the administrator as per the restructuring plan: (1) Investors will pay 1.238 billion yuan in cash for 200 million transferred shares, supporting the company’s future development; (2) 322,987,424 shares will be used to settle debts via debt-for-equity swaps.
The registration date for the capital reserve transfer is November 27, 2025, and the shares will be listed on November 28, 2025.
Chairman: Xiong Huiran
Board of Directors, Lian Shi Aviation Technology Co., Ltd.
March 18, 2026
Stock Code: 000697 Stock Abbreviation: ST Lian Shi Announcement No.: 2026-011
Lian Shi Aviation Technology Co., Ltd.
Announcement on Profit Distribution Plan
The company and all board members guarantee that the disclosed information is true, accurate, and complete, with no false records, misleading statements, or major omissions.
On March 18, 2026, the 27th meeting of the 11th Board of Directors was held via email, approving the “2025 Profit Distribution Plan”: no cash dividends, bonus shares, or capital increase via reserves will be distributed.
The plan still requires approval at the 2025 annual shareholders’ meeting.
Audited by ShineWing Zhonghe Certified Public Accountants, the company’s net profit attributable to shareholders of the listed company in 2025 was -518,017,174.90 yuan; plus unallocated profits at the beginning of the year of -3,573,238,868.84 yuan, ending with unallocated profits of -4,091,256,043.74 yuan. The parent company’s net profit was -479,523,580.37 yuan; plus initial unallocated profits of -3,233,056,099.16 yuan, ending with -3,712,579,679.53 yuan.
Since both the consolidated and parent company end-of-year unallocated profits are negative, the board proposes no profit distribution to shareholders for 2025.
(1) The company’s 2025 profit distribution plan does not involve other risk warning scenarios
■
Based on the above indicators, the company does not meet the conditions for other risk warning measures under Shenzhen Stock Exchange rules.
(2) Reasonableness of the cash dividend plan
Given the net profits attributable to shareholders are negative for both consolidated and parent, and profits are unallocated, the company cannot distribute profits. The board proposes no profit distribution for 2025.
The plan complies with relevant laws, regulations, and policies, including the CSRC’s guidelines on cash dividends, and considers the company’s actual profit situation, aligning with the interests of the company and shareholders.
As of the end of the reporting period, the company’s parent-level undistributed profits are -3,712,579,679.53 yuan; at the consolidated level, -4,091,256,043.74 yuan. The large accumulated losses mean the company cannot meet the conditions for dividend distribution for a long period, so investors should be aware of related risks.
Resolutions of the 27th meeting of the 11th Board of Directors.
This announcement is made accordingly.
Board of Directors, Lian Shi Aviation Technology Co., Ltd.
March 18, 2026
Stock Code: 000697 Stock Abbreviation: ST Lian Shi Announcement No.: 2026-015
Lian Shi Aviation Technology Co., Ltd.
Announcement on Application for Revocation of Other Risk Warning on Stock Trading
The company and all board members guarantee that the disclosed information is true, accurate, and complete, with no false records, misleading statements, or major omissions.
Special Reminder:
The company has applied to Shenzhen Stock Exchange to revoke the “other risk warning” on its stock trading. The approval process is still pending, and investors should be cautious of investment risks.
The company held the 27th meeting of the 11th Board of Directors on March 18, 2026, which approved the proposal to revoke the risk warning. This does not require shareholder approval. The relevant matters are announced as follows:
On April 16, 2025, ShineWing Zhonghe issued an audit report with a “material uncertainty related to going concern” paragraph for 2024, stating that as of December 31, 2024, current liabilities totaled 2.138 billion yuan, current assets 1.28 billion yuan, with current liabilities exceeding current assets by 858 million yuan. The due principal of debts maturing in 2024 and 2025 totals 1.052 billion yuan, with interest of 36 million yuan. The company cannot settle these debts and lacks the ability to do so.
Additionally, on January 21, 2025, the company’s first extraordinary general meeting approved the restructuring proposal, citing inability to pay debts but with restructuring value, and filed for court restructuring. The process is in preparation, and whether the court will approve or accept the application remains uncertain.
Although the notes mention measures to ensure ongoing operations, the overall situation indicates significant doubts about the company’s ability to continue as a going concern. This does not affect the issued audit opinion.
According to Shenzhen Stock Exchange Rule 9.8.1 (2024 revision), if a listed company’s recent three-year net profit (excluding non-recurring gains/losses) is negative and there is material uncertainty about ongoing capacity, the stock will be under “Other Risk Warning.”
Since April 21, 2025, the stock trading has been under “Other Risk Warning,” and the stock abbreviation changed to “ST Lian Shi.”
Details are disclosed in the announcement on April 18, 2025, on www.cninfo.com.cn and major newspapers.
The 2025 financial statements audited by ShineWing show revenue of 1.87389 billion yuan, net profit of -518 million yuan, and net profit after non-recurring items of -526 million yuan. The company’s owner’s equity is 3.34378 billion yuan.
ShineWing also issued a special statement confirming that the “material uncertainty about continuing as a going concern” has been resolved.
According to the latest audit report, the company’s financial condition has improved, and it meets the conditions for revoking the risk warning under the relevant rules. The company applies to Shenzhen Stock Exchange for revocation.
The company’s application is subject to approval by Shenzhen Stock Exchange, and whether it will be approved is uncertain. Investors are advised to invest rationally and pay attention to risks. The company will disclose updates timely.
The company’s designated disclosure media are www.cninfo.com.cn and major newspapers. All information is based on disclosures on these platforms. Investors should follow subsequent announcements and be cautious.
This announcement is made accordingly.
Board of Directors, Lian Shi Aviation Technology Co., Ltd.
March 18, 2026
Stock Code: 000697 Stock Abbreviation: ST Lian Shi Announcement No.: 2026-014
Lian Shi Aviation Technology Co., Ltd.
Announcement on the Losses Reaching One-Third of Paid-in Capital
The company and all board members guarantee that the disclosed information is true, accurate, and complete, with no false records, misleading statements, or omissions.
On March 18, 2026, the 27th meeting of the 11th Board of Directors approved the proposal that losses have reached one-third of paid-in capital. The details are as follows:
Audited by ShineWing Zhonghe, the company’s net profit attributable to shareholders in 2025 was -518 million yuan. As of December 31, 2025, the consolidated unamortized losses are 4.091 billion yuan, and the parent company’s unamortized losses are 3.713 billion yuan. The paid-in capital is 1.396 billion yuan, exceeding one-third of the total.
According to relevant laws and regulations, this matter requires shareholder approval.
In the reporting period, revenue was 1.87389 billion yuan, operating profit was -466.7 million yuan, total profit was -467.4 million yuan, and net profit attributable to shareholders was -518 million yuan. Revenue increased by 7.08% over last year, but costs increased by 9.72%, and impairment provisions for goodwill and deferred tax assets were made, leading to a sharp decrease in net profit.
The company completed judicial restructuring, which significantly improved financial health, with a low debt ratio.
Post-restructuring, the company has shed heavy debt, with a debt ratio below industry average, enabling “lightweight” development. The company will focus on high-end aerospace manufacturing, strengthening management, reducing costs, improving governance, and turning existing business losses into profits. It will also acquire high-quality assets to enhance core competitiveness and profitability, following strategies of “cost reduction, efficiency improvement, and overseas consolidation.”
In overseas markets, the company will maintain Airbus core supplier status, ensure timely delivery, negotiate price increases, and develop new business areas like MRO and eVOTL. It will optimize existing business profitability by analyzing costs, exiting loss-making packages, and shifting work to lower-cost regions.
Domestically, Chengdu Gardner will leverage its certifications and manufacturing capacity to develop domestic civil aircraft supply chain, participate in key projects, and expand into low-altitude economy, maintenance, and passenger-to-freighter conversions.
Supporting Documents
Resolutions of the 27th meeting of the 11th Board of Directors.
This announcement is made accordingly.
Board of Directors, Lian Shi Aviation Technology Co., Ltd.
March 18, 2026