"Height restriction" stacking over 63 million yuan in overdue debt, Yihua Lu has a pre-loss of over 6.9 billion yuan in three years. How much room is left for self-rescue? The company states it will resolve the issues through these methods.

The Daily Economic News Reporter: Yang Yu The Daily Economic News Editor: Du Yu

After issuing an early-year warning about a large loss, Yihua Lu (SZ300212, stock price 10.74 yuan, market value 7.732 billion yuan), a subsidiary of state-owned China Electronics Technology Group, has once again exposed financial difficulties. On the evening of April 2, Yihua Lu released an announcement disclosing that the company and its two subsidiaries had a cumulative total of 63.4817 million yuan in overdue debts that could not be repaid, accounting for 8.71% of the company’s audited net assets for 2024.

However, overdue debt is only the tip of the iceberg of the company’s operational difficulties. On March 20, the company announced that due to a service contract dispute in which it failed to fulfill its payment obligation, the company and its legal representative, Xiao Yi, had been issued a “Restriction of Consumption Order” by the court.

Image source: Yihua Lu announcement

Overdue debt of more than 63.00 million yuan will accelerate self-rescue by recovering accounts receivable

As of April 2, Yihua Lu and its subsidiaries, Chengdu Jinyi Data Lake Information Technology Co., Ltd. and Tianjin Huayi Zhicheng Technology Development Co., Ltd., had a cumulative total of 63.4817 million yuan in overdue debts that could not be repaid.

The announcement provides detailed information on 14 overdue debts. The creditors include Beijing Bank Co., Ltd. Zhongguancun Sub-branch, China General Nuclear International Financial Leasing (Tianjin) Co., Ltd., AVIC International Financial Leasing Co., Ltd., China Construction Bank Co., Ltd. Tianjin Jinnan Sub-branch, and others. Among them, the earliest due date for an overdue payment is February 13, 2026, with an amount of 9.4018 million yuan.

Image source: Yihua Lu announcement

Regarding this instance of overdue debt, Yihua Lu stated in the announcement that the company will continue to engage in active negotiations with the creditors, develop relevant response plans, and strive to reach agreement with the creditors on a debt resolution plan as soon as possible. At the same time, the company plans to raise funds for debt repayment as its top priority by strengthening cost control and accelerating the recovery of accounts receivable, so as to resolve the issue of overdue debt as quickly as possible.

The announcement also indicates that the above-mentioned creditors may take property preservation measures, including but not limited to freezing assets. As a result, the company may need to pay related breach-related penalties and other expenses, and may face risks such as lawsuits and arbitration.

In fact, Yihua Lu’s tight cash flow situation had long been reflected in its financial reports.

As of the end of the third quarter of 2025, the net cash flow from operating activities was -2.16 billion yuan, and the net cash flow from financing activities was -4.94 billion yuan; the company’s monetary funds were 4.20 billion yuan, while short-term borrowings were as high as 32.52 billion yuan, and long-term borrowings were 13.68 billion yuan. The company’s 2025 performance forecast shows that Yihua Lu expects its net assets to turn from positive to negative, putting it in a situation where it may be subject to risk warning for delisting.

For three consecutive years, the company has fallen into massive losses; the company and its legal representative have been “restricted from high consumption”

Compared with the pressing need to address overdue debt, Yihua Lu faces an even bigger crisis in its own operating situation and asset quality. The company’s 2025 performance forecast released by Yihua Lu shows that it expects its net profit attributable to the parent company to be a loss of 2.176 billion yuan to 2.791 billion yuan in 2025, which means it will enter a third consecutive year of massive losses. In 2023 and 2024, Yihua Lu recorded net losses of 1.89 billion yuan and 2.865 billion yuan, respectively. Total cumulative losses over three years are expected to reach 69.31 billion yuan to 75.46 billion yuan.

Image source: Yihua Lu announcement

In response, the company’s main explanation is that due to large fixed expenditures such as finance costs, it has not yet achieved an operational turnaround to profitability; at the same time, it conducts impairment tests on assets related to the data lake business and certain equity investments in which the operating circumstances have changed, and it makes provisions for asset impairment based on the results of the tests.

The data lake business was a key transformation direction for Yihua Lu in recent years. Since 2017, relying on a government big data foundation, the company has built data lakes across the country, aiming to realize full lifecycle management of data—“collection, storage, governance, use, and ease.” However, this once highly anticipated business has now become a heavy burden dragging down the company’s performance.

Pressure on funding has triggered a chain reaction. In addition to the above-mentioned overdue debt issues, according to Yihua Lu’s March 20 announcement, due to a service contract dispute with Beijing Times Lingyu Technology Co., Ltd., the company failed to pay 2.14 million yuan of the contract payment and litigation fees on time, and the court has taken restriction measures against the company and its legal representative, Xiao Yi. The company said that this matter has not yet had a major impact on its day-to-day operations and financial condition, and it is actively communicating to resolve it.

Daily Economic News