Huawen Media Group (SHE: 000793), a company under special treatment, has released its preliminary earnings for the first half of 2026, showing a significant improvement from a loss to a profit. Concurrently, a securities misrepresentation lawsuit filed by investors has been accepted by the court.
The company announced an estimated net profit attributable to shareholders of 47 million to 60 million yuan for the first six months of 2026. This marks a sharp reversal from a net loss of approximately 76.41 million yuan recorded in the same period last year. However, the company's non-GAAP net profit, which excludes certain one-time items, is projected to remain in the red, with an estimated loss between 40 million and 56 million yuan, though this is an improvement from the 71.24 million yuan loss a year earlier.
Separately, the legal process for investor compensation is advancing. A lawsuit alleging securities fraud has been formally filed with the court on behalf of investors by attorney Liu Peng from Shanghai Huzi Law Firm.
The legal action stems from a regulatory penalty. On April 22, 2025, the company received an administrative penalty decision from the Hainan Securities Regulatory Bureau. The core violation cited was the inclusion of false records in the company's financial reports.
This misrepresentation not only misled investment decisions but also undermined the principles of fairness and transparency in the capital markets. After verifying the evidence, the Hainan regulator imposed strict penalties on the company and relevant responsible individuals, providing a solid legal basis for subsequent investor claims.
Regarding eligibility for the claim, investors who purchased shares between April 27, 2022, and April 19, 2024 (inclusive), and subsequently sold them at a loss or continue to hold them after April 20, 2024, can register to participate.
Investigations by the regulator revealed that the company improperly used the gross method to recognize revenue from internet advertising recharge services conducted by a subsidiary. This accounting practice led to inflated operating revenue and costs, resulting in false records in its 2021 annual report, 2022 interim report, and 2022 annual report.
In summary, from 2021 to 2022, the company cumulatively overstated its revenue by 422 million yuan through the improper application of the gross accounting method for its internet advertising business. It was not until April 30, 2024, that the company issued an announcement to correct these accounting errors.
It is important to note that in such cases, compensation from the listed company typically only occurs after investors proactively initiate legal proceedings. Therefore, eligible investors who have suffered losses are encouraged to actively participate in the rights protection process to seek restitution.
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