Zhejiang Construction Investment details strategies for managing bad debt and recovery

Zhejiang Provincial Construction Investment Group Co., Ltd. (Zhejiang Construction Investment) has clarified its provisions for overdue accounts receivable and collection measures, affirming their adequacy and feasibility. The company categorizes overdue accounts based on credit risk, applying specific bad debt provisions for high-risk accounts and a portfolio approach for lower-risk ones. Overdue receivables primarily stem from lengthy approval processes rather than adverse financial events for government, public institutions, state-owned enterprises, and large private enterprises.

For key projects like Huaibei Ruijing Real Estate and Wenzhou Guopeng Real Estate, specific recovery actions are in place, including asset collateralization, internal contractor guarantees, and legal enforcement, demonstrating a comprehensive recovery strategy. For instance, Huaibei Ruijing's overdue balance of CNY 81.2544 million has a bad debt provision of CNY 16.2509 million (20.00%). Additionally, the controlling shareholder, Zhejiang State-owned Capital Operation Co., Ltd., has pledged to advance funds of CNY 24.81563 million for outstanding overdue receivables under specific conditions, ensuring no loss to Zhejiang Construction Investment. The company’s bad debt provision policies align with accounting standards and industry peers.