Restructuring plan implementation and continuous operational capability enhancement *ST JiaoTou is expected to "drop the star and remove the hat"

Originally from: Securities Daily Online

By Li Rushi, a reporter for Securities Daily

On March 28, Yunnan Transportation Investment and Ecological Technology Co., Ltd. (hereinafter “*ST Jiaotou”) released its 2025 annual report. In 2025, the company achieved total operating revenue of RMB 513 million; its net loss attributable to shareholders of the listed company was RMB 24.8732 million, a year-on-year reduction in losses of RMB 62.8593 million.

Regarding the improvement in performance, *ST Jiaotou stated that the company has made every effort to advance judicial reorganization work, optimize its financial fundamentals, and turn net assets attributable to shareholders from negative to positive, with net assets reaching RMB 1.3 billion. At the same time, the company has continued to do a good job in its primary responsibilities and main business, stabilizing operating performance. The amount of remaining contracts that can be executed is approximately RMB 2.0 billion, and the company’s going-concern capability has been effectively enhanced.

On this basis, *ST Jiaotou also published an announcement saying it will apply to the Shenzhen Stock Exchange to remove “delisting risk warnings” and “other risk warnings.” This also means that after the execution of the “Reorganization Plan,” the company’s performance may see a new turning point.

Net assets turned positive after the reorganization plan took effect

Going-concern capability improved

Specifically, in 2025, *ST Jiaotou made every effort to advance judicial reorganization. By implementing the “Reorganization Plan” and taking measures such as converting capital surplus into share capital, introducing investors, disposing of assets, and using the shares issued by capital conversion to settle part of its debts, the company effectively improved its asset-liability structure. It achieved a turnaround in net assets attributable to the listed company, turning them from negative to positive and increasing them to RMB 1.286 billion. By the end of 2025, the company’s asset-liability ratio had been reduced to 50.53%, which is within a reasonable range, further improving its ability to repay debts and its financing flexibility.

According to industry insiders, compared with the period in 2024 when *ST Jiaotou was deeply trapped in a debt crisis, the restructured *ST Jiaotou reduced liabilities by more than RMB 1.0 billion. Even for just the financial expenses alone, it is expected to reduce expenditures by around RMB 30 million.

The annual report shows that *ST Jiaotou’s principal business involves landscaping and ecological and environmental protection engineering. In 2025, the company’s engineering construction revenue was RMB 490 million, accounting for 95.64% of operating revenue.

*ST Jiaotou’s secretary to the board, Zou Jihu, told a reporter from Securities Daily: “Due to the impact of litigation-related provisions for corresponding cost expenses, the company was unable to achieve profitability in 2025. However, the company optimized its financial fundamentals through judicial reorganization. The remaining amount of contracts that can be executed is about RMB 2.0 billion, and the going-concern capability has been effectively enhanced. Meanwhile, there is a rich stock of greening and environmental protection projects. In addition, the company achieved about RMB 600 million in creditor claim recoveries throughout the year. The net cash flow from operating activities was RMB 141 million. The company’s operating performance in 2026 is expected to be further optimized.”

It is worth noting that, according to the reorganization plan, *ST Jiaotou’s controlling shareholder, Yunnan Jiaotou Group, will, based on the company’s development needs and market environment, focus on areas such as green energy, survey and design, digital and intelligent transportation, and high-quality highway assets. Through methods such as issuing shares to purchase assets and cash acquisitions, it will inject, at an appropriate time, industrial resources under Yunnan Jiaotou Group that have relatively high relatedness to industries and are fairly mature in incubation and cultivation. *ST Jiaotou’s principal business may become more diversified, forming new profit growth points.

A key step toward “removing the star and returning to a normal listing”

Focus on injection of quality assets

On March 28, *ST Jiaotou also released an announcement stating that it will apply to the Shenzhen Stock Exchange to withdraw “delisting risk warning” and “other risk warning.”

The announcement shows that, according to Articles 9.3.8 and 9.3.12 of the Shenzhen Stock Exchange Listing Rules, the situation in which *ST Jiaotou’s net assets are negative has been eliminated, and it does not fall under any other circumstances in which “delisting risk warnings” are imposed.

At the same time, according to the 2025 annual audit report issued by Zhongshen Zhonghuan Certified Public Accountants (Special General Partnership), the situation in which *ST Jiaotou was subject to “other risk warnings” due to “in the most recent three accounting years, the net profits before and after deducting non-recurring profit and loss were all negative, and the audit report for the most recent year indicates that the company’s going-concern capability is subject to uncertainty” has been eliminated. It does not touch other circumstances under the Shenzhen Stock Exchange Listing Rules that require “other risk warnings” to be imposed.

Bai Wenxi, Chairman of Zhongo & Kunlun (Beijing) Asset Management Co., Ltd., told a reporter from Securities Daily: “*ST Jiaotou’s previous imposition of ‘other risk warning’ was mainly due to uncertainty in its going-concern capability. In its 2025 annual report, not only did the company turn net assets positive, but operating cash flows also flowed in on a positive basis. Coupled with sufficient remaining contract amounts, this provides strong support for recognition of going-concern capability. After applying to remove the star and return to a normal listing, the company will resume normal trading status, which will help improve liquidity and investor confidence, and the company’s valuation will also increase.

‘Next, the market’s focus will shift to the progress of the injection of the assets promised by *ST Jiaotou’s controlling shareholder—especially whether business transformation in directions such as green energy, survey and design, and digital and intelligent transportation can be implemented. This will determine whether the company can achieve the crucial leap from “shell protection” to “high-quality development.”’ Bai Wenxi further said.

In response, relevant officials from *ST Jiaotou told a reporter from Securities Daily that Yunnan Jiaotou Group, as an important industrial investor in the “Reorganization Plan,” also promised in the reorganization plan document that at an appropriate time, the group will inject its corresponding high-quality business into the listed company, creating a new framework for high-quality development. It is worth the market’s expectation.

(Editor Qiao Chuanchuan)

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