RiseSun guarantees subsidiary loan, total guarantees hit nearly 300% of net assets

RiseSun Real Estate Development Co., Ltd. has provided a mortgage and joint liability guarantee for its wholly-owned subsidiary, Xianghe Rongxin Real Estate Development Co., Ltd. This guarantee secures a special capital loan of 10 million yuan from Xianghe County Caixin Urban Investment Holding Group Co., Ltd., with the total guarantee amount not exceeding 11 million yuan and a term of up to 44 months.

The company's board believes this guarantee supports Xianghe Rongxin's development without harming the interests of RiseSun or its shareholders, citing the subsidiary's low operational risk and sufficient repayment capacity. However, a significant risk highlighted is that the company's total external guarantees, including this transaction, now exceed 100% of its most recent audited net assets.

As of the announcement date, RiseSun's actual total guarantee amount stands at 44.127 bn yuan, representing 297.05% of its latest audited net assets. Guarantees provided to external parties not consolidated in the financial statements amount to 7.756 bn yuan, or 52.21% of net assets. Additionally, the company has overdue guarantees totaling 10.251 bn yuan. Xianghe Rongxin itself has a reported asset-liability ratio of 143.43% as of June 30, 2025.