*ST Mubon: There exists subsequent risk of bankruptcy declaration and liquidation procedures due to restructuring failure

(Source: Caixin)

Finally, according to relevant regulations, if the court approves the applicant’s reorganization application for the company, the company’s stock will be subject to a delisting risk warning.

Recently, *ST Mubang (Rights Protection) (603398.SH) issued an announcement regarding abnormal fluctuations in its stock trading. According to the announcement, the closing prices of the company’s stock deviated by more than 12% cumulatively over three consecutive trading days. According to the relevant provisions of the Shanghai Stock Exchange Trading Rules, this constitutes an abnormal fluctuation in stock trading.

In response to the abnormal trading fluctuations, the company conducted an investigation into the matter and issued inquiries to its controlling shareholder and actual controller. After self-examination, the company confirmed that its production and operations are normal, with no significant changes in daily operations, market environment, or industry policies. Costs and sales have not experienced large fluctuations, and internal production and business order are normal. Additionally, the company verified with its controlling shareholder Jiangxi Mubang New Energy Holding Co., Ltd. and the actual controller Liao Zhiyuan that as of the date of this announcement, aside from the major matters disclosed related to the pre-reorganization, there are no other major undisclosed information, including but not limited to major asset restructuring, share issuance, significant transactions, business reorganization, share repurchase, equity incentives, major business cooperation, or introduction of strategic investors. Furthermore, the company has not found any media reports or market rumors that could significantly impact the stock trading price, nor does it involve market hot concepts.

The company has highlighted several major risks. First, there is a significant delisting risk due to revenue being less than 300 million yuan. The company’s annual audit accountant’s special statement indicates that it cannot yet confirm that the company’s operating income, after excluding non-core business income and non-substantive income, will exceed 300 million yuan in 2025. Second, there is a delisting risk if the annual audit accountant issues a non-unqualified internal control opinion, such as if the 2025 financial statements or internal controls receive a non-unqualified audit opinion, leading to the company’s stock being delisted from the Shanghai Stock Exchange. Third, there is other delisting risk, meaning that even if the court formally accepts the reorganization application, there remains a risk of bankruptcy declaration and bankruptcy liquidation if the reorganization fails. Fourth, the company and its actual controller received a “Preliminary Administrative Penalty Notice,” mainly related to the financial data of the 2023 and 2024 semi-annual reports, which may impact the beginning balance of 2025. Fifth, whether the company can enter reorganization remains uncertain; the Nanchang Intermediate Court’s initiation of pre-reorganization does not mean formal acceptance of the reorganization application. Lastly, according to relevant regulations, if the court approves the applicant’s reorganization application, the company’s stock will be subject to a delisting risk warning.

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