Meizhi Holdings Completes Settlement of Two Major Litigation Cases Involving Amount of 19.6727 Million Yuan

Shenzhen Meizhi Decoration Design Engineering Co., Ltd. (Stock abbreviation: Meizhi Co., Ltd., Stock code: 002856) recently announced the latest developments in two major litigation cases. The announcement shows that the settlement agreements for both cases have been fully executed, related claims and debts have been settled, and the cases are closed, involving a total settlement amount of 19.6727 million yuan.

It is understood that the first case involves a construction contract dispute between Meizhi Co., Ltd. and Chengdu Urban Rail Transit Co., Ltd., China Railway Electrification Bureau Group Co., Ltd., and China Railway Electrification Bureau Group Beijing Construction Engineering Co., Ltd., regarding the new Chengdu to Pujiang railway station building and residential construction project CPZF section. The second case involves a dispute over a sales contract for materials related to the Guangqing Intercity Rail Transit Project GQZH-3 section, including the Quangyuan Station and Quangyuan Complex glass curtain walls, between Meizhi Co., Ltd. and China Railway Electrification Bureau Group Beijing Construction Engineering Co., Ltd., and China Railway Electrification Bureau Group Co., Ltd. Previously, the company had reached a settlement and disclosed relevant progress.

The announcement discloses that as of the date of this announcement, both defendants have paid the amounts as stipulated in the settlement agreements. The defendant in the first case paid 5.1727 million yuan, and both parties completed the settlement of project payments and related obligations for the Chengdu West Station, Chongzhou Station, Xilai Station, Chaoyang Lake Station, Yangma Station, and Qionglai Station, extinguishing the claims and debts; the defendant in the second case paid 14.5 million yuan, and the rights and obligations under the involved sales contracts have been terminated, with no further disputes.

Regarding the impact of these cases on the company, Meizhi Co., Ltd. stated that according to the “Enterprise Accounting Standards” and relevant regulations, the settlement amounts received this time involve reducing the corresponding litigation-related revenue and reversing the bad debt provision for related accounts receivable recognized earlier. The impact on the company’s current and future profits will be subject to the audit results confirmed by the annual auditing agency.

Additionally, the announcement mentions that, aside from the disclosed litigation and arbitration matters, the company and its controlling subsidiaries have had a total of 14 litigation and arbitration cases over the past twelve months, with a total involved amount of 5.3696 million yuan, accounting for 5.05% of the company’s latest audited net assets. All cases involve amounts below 10 million yuan. As of the date of this announcement, the company and its controlling subsidiaries have no other undisclosed litigation or arbitration matters that need disclosure.

The company will continue to take effective measures to protect the legitimate rights and interests of the company and all shareholders. Investors are advised to be aware of investment risks.

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