Zhongli Group divests subsidiary amid stock volatility, external guarantees shift

Jiangsu Zhongli Group reported abnormal stock trading, with its closing price deviating by over 20% across two consecutive trading days (December 11-12, 2025). The company confirmed no undisclosed major matters and its overall operational status remained normal. This volatility coincides with the company's decision to divest its 100% equity in Qinghai Zhongli Optical Fiber Technology Co., Ltd. for CNY 951,461.90. This transaction was approved by the board on December 12, 2025.

As a result of the equity transfer, Jiangsu Zhongli Group's existing guarantees for Qinghai Zhongli, totaling CNY 28,631.74, will passively transform into external guarantees for a non-consolidated entity. These guarantees were initially provided to support Qinghai Zhongli’s operations.

The board believes this move aligns with its restructuring plan to divest inefficient assets, aiming to improve operational efficiency, optimize industrial layout, and enhance asset structure. Post-transaction, Qinghai Zhongli will no longer be part of Jiangsu Zhongli Group's consolidated financial statements. The total external guarantee balance for Jiangsu Zhongli Group and its subsidiaries will be CNY 1.58 bn, representing 111.25% of its most recently audited net assets. External guarantees for non-consolidated entities account for CNY 721m or 50.75%.