SHANDONG MOLONG(00568): The debtor's bankruptcy liquidation application has been approved.

SHANDONG MOLONG (00568) has announced that Shouguang Baolong has reached a repayment agreement with the company, in which Shouguang Baolong is required to pay the company a total of RMB 462 million in outstanding accounts receivable related to the debt. According to the debt transfer agreement, a total of RMB 169 million of the debt has been transferred by the company to Shandong Shouguang Vegetable Wholesale Market Co., Ltd. As of the date of this announcement, the remaining balance of the debt is RMB 292 million. Shouguang Baolong has mortgaged its fixed assets and intangible assets to the company, including land, properties, equipment, etc. (valued at RMB 509 million as of September 30, 2023), as collateral for repayment of the debt under the Shouguang Baolong repayment agreement. The company has the right to exercise the rights of a mortgagee over the collateral. Previously, the company has made a bad debt provision of RMB 80.93 million for the debt. In order to truthfully and objectively reflect the company's assets and financial position, the company has made provisions for impairment losses and bad debts in accordance with the principles of prudence, relevant provisions of the Enterprise Accounting Standards, and company accounting policies. The specific amounts will be determined after auditing by the accounting firm, and the company's announcement shall prevail. The company believes that its production and operations are currently normal, and the bankruptcy liquidation matter has not had a significant impact on the company's normal operations. As of the date of this announcement, the specific plan for bankruptcy liquidation has not yet been formulated, and it is expected that the bankruptcy liquidation process will be complex and lengthy, and the timeline difficult to determine. Therefore, the impact of the bankruptcy liquidation matter on the company's future performance cannot be accurately estimated at this time. The company will closely monitor the progress of the bankruptcy liquidation matter, actively and lawfully protect the company's rights, and minimize related losses.