Yunnan Jinggu Forestry faces lawsuits, frozen assets, and heavy impairments

Yunnan Jinggu Forestry's controlled subsidiary, Tang County Huiyin Wood Co., Ltd., is embroiled in 19 property preservation and litigation cases totaling approximately 110.48 million yuan, primarily related to private lending disputes. These legal actions have resulted in the freezing of Huiyin Wood's nine bank accounts and the suspension of its two production lines, impacting the company's production and sales. The company has formed a special task force and engaged legal counsel to address these issues.

In addition to the lawsuits, Yunnan Jinggu Forestry announced a significant impairment of assets totaling 72.03 million yuan for the first half of 2025. This includes write-downs for inventory (15.01 million yuan), fixed assets (47.97 million yuan), intangible assets (1.67 million yuan), and goodwill (6.38 million yuan). These impairments, along with declining revenue of 123.33 million yuan (a 45.03% decrease from the previous year) and a net loss of 202.36 million yuan, indicate a substantial deterioration in the company's financial performance.

The company's half-year report highlights further challenges, including a 43.59% decline in artificial board production and a 37.16% drop in sales compared to the same period last year. These operational setbacks, combined with the ongoing legal battles and the planned sale of Huiyin Wood's 51% equity, raise concerns about the company's sustained profitability and may trigger delisting risk warnings.