Once a leader in smart cities, three consecutive years of losses, fundraising account frozen

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With three consecutive years of losses and accumulated undisclosed losses exceeding share capital, and with more than RMB 129 million in raised funds having been judicially frozen—ST Yinjing (rights protection) disclosed the operational predicament it is currently facing in its 2025 annual report, revealing the challenges confronting this former smart city leader.

The annual report shows that in 2025, the company’s operating revenue fell 68.14% year over year, and the loss in net profit attributable to shareholders widened by 90% compared with the prior year; the company’s ability to sustain operations is being tested.

It is noteworthy that Certified Public Accountants Zhongxi issued an audit report with an unmodified opinion that includes a paragraph on material uncertainty related to its ability to continue as a going concern for the company’s 2025 annual report. As of December 31, 2025, the company’s cumulative losses were RMB 1.86B, and its undisclosed losses already exceeded share capital. Unrestricted monetary funds were RMB 18.7577 million; long-term borrowings due within one year were RMB 50.04M; short-term borrowings were RMB 1.44B, of which RMB 104.0 million had already become overdue, creating significant pressure to repay short-term debts. These matters and/or circumstances indicate that there may be uncertainties that could lead to significant doubts about the company’s ability to continue as a going concern.

Undisclosed losses exceed share capital

In 2025, ST Yinjing achieved operating revenue of RMB 175 million, down 68.14% year over year; the loss in net profit attributable to shareholders was RMB 1.79B, compared with a loss of RMB 941 million in the same period of the prior year; the loss in net profit after deducting non-recurring items was RMB 1.79B, compared with a loss of RMB 941 million in the same period of the prior year; net cash flow from operating activities was RMB 0.9796 million, compared with -RMB 347 million in the same period of the prior year.

According to the announcement, from 2023 to 2025, ST Yinjing’s net profit attributable to shareholders was -RMB 236 million, -RMB 941 million, and -RMB 1.79B, respectively. As of December 31, 2025, cumulative losses were RMB 1.86B, and undisclosed losses had already exceeded share capital. As of end-2025, the parent company’s undistributed profits were -RMB 1.45B, and the company’s fundamentals continued to deteriorate.

Meanwhile, the company has triggered multiple other risk alert scenarios under the listing rules for ChiNext on the Shenzhen Stock Exchange: previously, it was administratively penalized for violations in information disclosure and then “received an ST designation” (adding ST to the stock name); this time, it was further subjected to other risk warnings starting from April 3 due to the fact that, for three consecutive accounting years, the lower of net profit before and after deducting non-recurring items was negative, and the audit report included a paragraph on material uncertainty related to its ability to continue as a going concern.

Facing multiple operational predicaments, ST Yinjing’s management disclosed four measures to improve operations in the annual report: the newly appointed chairman, Yao Chengling, pledged that if needed, in 2026 the company will provide RMB 50 million in financial assistance; optimize the company’s asset structure, revitalize existing assets, and intensify asset disposal efforts; accelerate project receivables collection and establish a leadership team for accounts receivable led by senior executives; proactively reduce advance-funding business, optimize cash flow, and carry out strategic cooperation with central enterprises such as China Railway Construction Engineering Co. to expand business, etc.

Nearly all raised-funds accounts are “frozen”

A special report disclosed concurrently with the 2025 annual report on the storage and actual use of the company’s raised funds in 2025 further reveals ST Yinjing’s severe liquidity crisis.

According to the announcement, in 2023, ST Yinjing raised RMB 1 billion through a stock issuance to specific investors (net proceeds of RMB 986 million). By the end of 2025, only RMB 108 million in total had been invested into the raised-funds projects. The raised funds forcefully transferred by the court reached RMB 316 million, including RMB 293 million transferred in 2024 and RMB 22.65 million transferred in 2025.

Regarding account freezes, among the company’s total of eight special accounts for raised funds, seven have been judicially frozen, with a total frozen amount of RMB 129 million, accounting for 99.99% of the balance of the corresponding accounts, leaving only one special account not frozen. The legal cases leading to the freezes total as many as 16, covering disputes over liability for damages to shareholders’ interests, disputes over financial loan contracts, disputes over bills, contract disputes, and so on.

It is noteworthy that this special report is the first to disclose in detail three labor arbitration cases—the applicants are Xie * Hai, Yu * Min, and Cheng * Chuan, respectively—and the causes of action are all “labor arbitration.” The case statuses include “awaiting first-instance court hearing” and “settled through mediation.” These three labor arbitration cases have entered the court’s execution and preservation procedures and have resulted in the court taking corresponding measures against the company’s special accounts for raised funds.

Non-compliance in raised-funds management

In addition to freezes due to external lawsuits, the company’s own management of raised funds also shows compliance issues.

The report shows that the company routed raised funds back to non-raised-funds accounts through suppliers, with a cumulative amount of RMB 143 million; it transferred RMB 50 million out through related parties such as Hangzhou Juneng Digital Intelligence and Hangzhou Lingtou Technology for daily operations without fulfilling the deliberation and approval procedures; in 2023, it used raised funds to pay expenses for non-raised-funds projects of RMB 93.35 million, including purchases of hardware and software and renovations of non-raised-funds sites. However, the special report clearly states that all of the above funds have been returned to the special accounts for raised funds.

In addition, the company used idle raised funds twice to temporarily supplement working capital. After the first installment of RMB 200 million was repaid in April 2025, following a 12-month extension, it was immediately approved for a replenishment plan of no more than RMB 400 million; by the end of 2025, RMB 305 million had already been used.

ST Yinjing said the company is replacing the frozen amounts of raised funds with its own funds, and will complete the account replacement and unfreezing of the frozen amounts as soon as possible. An insider in the audit industry told a reporter that as of December 31, 2025, the company has interest-bearing liabilities of more than RMB 1.5 billion; in 2025, it paid more than RMB 80 million in interest. On the balance sheet, monetary funds are insufficient to pay one quarter of interest. Given that there are many lawsuits and production and operations themselves require liquidity, there are doubts about whether the replacement can be carried out smoothly.

In addition, regarding the RMB 316 million raised funds that have already been forcibly deducted, the company stated that it has not yet been returned to the raised-funds accounts.

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