Ife Elevators Co.,Ltd. (SZ002774, stock price: CNY 9.85, market cap: CNY 3.316 billion) announced on December 3 that it received a joint notice from the Guangdong Provincial Department of Science and Technology, the Department of Finance, and the State Taxation Administration. The company's high-tech enterprise qualification for 2021–2023 has been revoked.
The company stated that the revocation will affect its financial performance, though the exact impact remains subject to further clarification by tax authorities and final confirmation by auditors.
According to the "High-Tech Enterprise Certification Management System," 45 companies in Guangdong, including Ife Elevators, Guangzhou Duoyi Network Co., Ltd., and Guangzhou Langqi Industrial Co., Ltd., had their high-tech status revoked following investigations, expert reviews, and formal notifications.
The revocation notice, issued in late November, allows affected companies to appeal within 60 days or file a lawsuit within six months. However, Ife Elevators' announcement did not mention any plans for appeal.
The immediate consequence of losing high-tech status is a higher tax burden. Under Chinese tax laws, high-tech enterprises enjoy a reduced corporate income tax rate of 15%, compared to the standard 25%. The authorities will recover tax benefits from the year of disqualification.
Ife Elevators reported revenue of CNY 951 million in the first three quarters of 2024, down 14.82% year-on-year, with net profit falling 38.97% to CNY 52.06 million. Its R&D expenses from 2021 to 2024 ranged between CNY 38.64 million and CNY 70.74 million annually.
In recent years, few listed companies have faced similar revocations. Notable cases since 2020 include *ST Huifeng (SZ002496), Junya Technology (SH603386), and Bichuang Technology (SZ300667). For example, *ST Huifeng's tax rate reverted to 25% after its 2013–2016 high-tech status was withdrawn due to environmental violations.
