ST Jinglan: The target material business has not yet formally started production, and there is uncertainty in the injection of Xinxin Technology assets.

ST Jinglan has announced a significant deviation. The company's target material business is currently in the stage of maintenance and re-production of the acquired production line, and has not yet formally started production, nor has it generated any related business revenue and profit. Currently, the competitive landscape of the ITO target material industry has become mature, with many domestic and foreign producers possessing mature production technology, stable customer channels, and large-scale production capacity. Downstream customers of target material business have strict requirements for core indicators such as product purity and density, and have established strict supplier admission and product verification systems. Even if the company produces ITO target material products, they will need to undergo a long period of market validation, and there is significant uncertainty in market development and order acquisition. The company's target material business faces significant market challenges in terms of future profitability. According to the company's "Reorganization Plan," the industrial investors have promised to initiate the asset injection process of Xinlian Environmental Protection Technology Co., Ltd. before December 31, 2025. The company has failed to complete the restructuring plan on time. Due to previous administrative penalties, the company expects that it will not be able to complete the asset injection through stock issuance within the next 3 years, and can only do so through cash payment. However, the company's funds are limited, and it plans to gradually acquire cash, with the risk of not completing the entire asset injection by December 31, 2027, as well as facing uncertainties such as approval and valuation negotiations.