Equity Transaction Price Expression Inaccurate *ST Huifeng Receives Warning Letter

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Because of inaccurate descriptions of the equity transfer price, *ST Hui Feng (002496) also disclosed receiving a warning letter from the Jiangsu Securities Regulatory Bureau on the evening of March 18.

After investigation, *ST Hui Feng signed a transfer agreement in July 2018 with related parties regarding 49% equity of Shijiazhuang Ruikai Chemical Co., Ltd., with a transaction price of 270 million yuan. The company’s statements about the equity transfer price in the 2018-2020 annual reports were inaccurate, violating relevant regulations. The company’s chairman Zhong Hangen, then General Manager Pei Bo Ping, then Secretary of the Board Wei Guangquan, and then Financial Officer Yang Jinhua failed to perform their duties diligently and are primarily responsible for the above violations.

According to Article 59 of the “Measures for Information Disclosure,” the Jiangsu Securities Regulatory Bureau decided to impose administrative regulatory measures by issuing a warning letter to the company and relevant responsible persons, which will be recorded in the securities and futures market integrity archive. The company should take effective measures to strengthen internal control and information disclosure management, and strictly fulfill its information disclosure obligations as required. All directors and senior management should enhance their understanding of securities laws and regulations, and improve their ability to perform their duties.

In response, *ST Hui Feng stated that after receiving the above “Warning Letter,” the company and relevant personnel attached great importance to the issues pointed out in the letter, will seriously summarize and learn lessons, further strengthen the study and understanding of relevant laws and regulations such as the “Administrative Measures for Information Disclosure of Listed Companies” and the “Stock Listing Rules of the Shenzhen Stock Exchange,” improve awareness of compliance operations, enhance corporate governance, strengthen information disclosure management, prevent similar incidents from happening again, and effectively safeguard the interests of the company and all shareholders, promoting sustainable, stable, and healthy development.

*ST Hui Feng’s main businesses include biological agriculture, petrochemical storage, and supply chain. According to the company’s recent forecast for 2025 performance, net profit attributable is expected to loss between 170 million and 220 million yuan, representing an increase in loss of 9.61% to 41.85% compared to the same period last year; net profit after non-recurring gains and losses is expected to be a loss of 130 million to 170 million yuan, a decrease in loss of 27.3% to 44.41% compared to the same period last year.

The company stated that the net profit attributable to shareholders in 2025 will be negative mainly due to changes in fair value of financial assets held, impairment losses on fixed assets, and provisions for investor litigation damages based on litigation judgments; the company’s operational expectations during the transformation phase did not meet expectations.