Liuzhou Chemical Industry Co., Ltd. (*ST Liuhua) held its first-half 2026 performance briefing on August 10, reporting a significant turnaround. The company's revenue reached 76.68 million yuan, up 12.81% year-on-year, while net profit attributable to shareholders jumped 311.98% to 14.18 million yuan. The growth is attributed to two factors: a low base in the same period last year, and higher market prices for hydrogen peroxide products compared to the previous year, which boosted product gross margin by 19.20 percentage points and improved profitability.
The improved financial performance also benefits investor claims. On April 10, 2026, Liuzhou Chemical Industry issued a revised 2025 earnings forecast, swinging from a previously projected profit of over 6 million yuan to a massive loss of 30 million yuan. The company now expects a net loss of 30 million yuan for 2025, with a core loss of 30.2 million yuan. This contrasts sharply with the January 21 forecast of a 628 million yuan profit. The company attributed the drastic revision to the audit process, stating that the auditor adopted a more conservative approach, leading to large asset impairment charges that reduced profits.
Notably, the company has been tagged with a "*ST" designation due to simultaneously triggering both the "net loss" indicator and the "revenue below 3 billion yuan" threshold. Lawyer Liu Peng from Shanghai Huzi Law Firm argued that such inaccurate earnings forecasts reflect poor transparency and weak internal controls. He stated that the dramatic profit swing constitutes a securities misrepresentation, and investors who suffered losses due to the company's failure to disclose information properly have the right to seek compensation through civil litigation. Eligible investors are those who bought shares between January 21, 2026, and April 10, 2026 (inclusive), and sold or held them after April 11, 2026, resulting in a loss.
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