According to the Zhitong Finance App, Hengsheng Real Estate (00845) announced that on December 31, 2022, the Group's loan principal and interest payable of RMB 3,274 billion and RMB 1,622 million respectively were overdue. Furthermore, a number of principal amounts not mentioned above totaling RMB 7.797 billion and interest on loans were overdue during the loan period. Although the overdue amounts were subsequently paid by December 31, 2022, such loans were still considered to be in default on December 31, 2022. These constituted default matters. On December 31, 2022, a number of loans with a principal amount of RMB 4,837 million other than those mentioned above also resulted in cross-default. Furthermore, after December 31, 2022, a number of loans with a principal amount of RMB 2,912 million were not repaid according to the repayment schedule in the loan agreement, thus constituting a default under the relevant loan agreement.

The company is currently seeking legal advice on the breach of contract with a view to dealing with related matters through appropriate means. In addition, the company is also continuously trying to obtain funds to repay its arrears or seek extensions or refinancing of such loans.