Jinggu Forestry faces SSE inquiry over asset sale, financial risks

Yunnan Jinggu Forestry Co., Ltd. received an inquiry letter from the Shanghai Stock Exchange on November 25, 2025, concerning its major asset restructuring draft plan. The company intends to sell 51% equity in Tangxian Huiyin Wood Industry Co., Ltd. to its controlling shareholder, Chow Tai Fook Investment Co., Ltd., via a cash transaction. This follows an acquisition of Huiyin Wood Industry’s 51% equity in 2023.

The inquiry highlights that Huiyin Wood Industry, which met performance targets in 2023, incurred significant losses in 2024 and further declined in 2025, impacted by civil lending lawsuits and production halts. The company plans to dispose of Huiyin Wood Industry during the performance commitment period and has accrued substantial impairment provisions. Some civil lending issues at Huiyin Wood Industry predated Jinggu Forestry's acquisition.

The Shanghai Stock Exchange has requested clarification on the prudence of the initial acquisition, the veracity of financial data related to risk events, and the significant decline in performance. The company is also asked to detail the repayment plan for an outstanding loan from Huiyin Wood Industry of 1,326 million yuan, clarify the adequacy of provisions for civil lending totaling approximately 313 million yuan, and address potential impediments to equity transfer and industrial and commercial registration due to frozen assets.