Zhitong Finance App News, *ST Huichen (688500.SH) announced that on December 22, 2023, the company received the “Decision on Administrative Supervision Measures” issued by the Beijing Regulatory Bureau of the China Securities Regulatory Commission. The decision states:

In June 2017, Huichen Co., Ltd. acquired 48% of the shares of Beijing Xintang Puhua Technology Co., Ltd. (Xintang Puhua for short), and Xintang Puhua became a company in which Huichen Co., Ltd. participated. In December 2020, Huichen Co., Ltd. further acquired 22% of Xintang Puhua's shares, and Xintang Puhua became a holding subsidiary of Huichen Co., Ltd. By fabricating business with third parties, signing sales contracts with no commercial substance, and confirming project revenue in advance, the “Beijing Huichen Capital Information Co., Ltd. Prospectus for the initial public offering of shares and listing on the Science and Technology Innovation Board” disclosed by Huichen Co., Ltd. on July 13, 2020, and the 2020 to 2022 annual report disclosed after initial listing were falsified. In 2018, Xintang Puhua inflated revenue and profits in four projects by signing non-commercial real sales contracts, taking into account the impact of factors such as bad debt losses and impairment, which led to an inflated profit of 5,5531 million yuan in 2018 for Huichen Co., Ltd., accounting for 7.33% of the total profit disclosed in the current period. In 2019, Xintang Puhua and others inflated revenue and profits in five projects by signing sales contracts with no commercial substance and confirming project revenue in advance, causing Huichen Co., Ltd. to inflate operating income by 7.217 million yuan in 2019, accounting for 1.88% of the current disclosed operating income; taking into account the impact of factors such as bad debt losses and impairment, inflated profit of 17.8588 million yuan, accounting for 25.16% of the total profit disclosed in the current period. In 2020, through fictional business with third parties, signing sales contracts with no commercial substance, and confirming project revenue in advance, etc., Xintang Puhua and others virtually increased revenue and profits in 10 projects, causing Huichen Co., Ltd. to inflate revenue by 43.9681 million yuan in 2020, accounting for 11.29% of the operating income disclosed in the current period; taking into account the impact of factors such as bad debt losses and impairment, inflated profit by 609.616 million yuan, accounting for 60.69% of the total profit disclosed in the current period. In 2021, Xintang Puhua and others inflated revenue and profits in six projects by constructing business with third parties and confirming project revenue in advance, causing Huichen Co., Ltd. to inflate operating income by 24.2413 million yuan in 2021, accounting for 5.09% of the current disclosed operating income; considering the impact of factors such as bad debt losses and impairment, profits were reduced by 17.2111,900 yuan, accounting for 36.45% of the absolute value of total profit disclosed during the period. Affected by related projects from 2018 to 2021, Huichen Co., Ltd. reduced profits by 105 million yuan in 2022, accounting for 49.84% of the absolute value of the total profit disclosed in the current period, due to multiple bad debt losses, impairment of goodwill, etc.

The Beijing Securities Regulatory Bureau decided to take administrative supervision measures to issue warning letters against Liu Xiaokui, He Wei, Li Yonglin, Jiang Yi, Ma Shaoping, Hong Jinming, Zhang Wenli, Zhang Haiping, He Xiaoman, Wu Yunchuan, Zhu Fengjia, Yu Bingyi, etc., and record them in the securities and futures market integrity file.