Enlightenment Environment Mired in Litigation: Outstanding Litigation Amount of 4 Billion Yuan, Pending Fulfillment of 7.7 Billion Yuan

China Economic Journal Reporter Chen Jiayun Beijing Report

On March 12, Enlighten Environment (000826.SZ) issued a second warning notice regarding the possible delisting risk of its stock, clearly stating that its net assets attributable to parent company at the end of 2025 are expected to be negative. If confirmed after audit, the company will trigger a delisting risk warning. The next day, the company disclosed an update on litigation progress, with a total unsettled litigation amount of 4.088 billion yuan, and nearly 7.737 billion yuan in judgments pending execution.

An Enlighten Environment spokesperson told China Business Journal, “The disclosed litigation cases include some where the company, as plaintiff, is claiming repayment, and we are actively recovering accounts receivable. The existing receivables are mainly government-related payments, and we are continuously pushing for collection.” The person added that the company’s various operations are proceeding normally and the business is stable.

Litigation Troubles

According to the announcement, among the 4.088 billion yuan in unsettled lawsuits, Enlighten Environment and its controlling subsidiaries are involved as plaintiffs in cases totaling 543 million yuan, mainly related to administrative litigation, construction disputes, and receivables recovery; as defendants, they are involved in cases totaling 3.545 billion yuan, mainly in construction contract disputes and debt litigation.

The announcement also disclosed the verdicts of several key cases. In case (2025) Jing 01 Minchu 940, Beijing First Intermediate People’s Court ordered Enlighten Environment to repay a total of 230 million yuan in principal and interest to Enlighten Technology Service Co., Ltd., along with subsequent interest, legal fees, and preservation insurance costs. The court accepted the case with a fee exceeding 1.19 million yuan borne by Enlighten Environment. In case (2025) Jing 0112 Minchu 7726, Enlighten Environment is required to pay Beijing Times Taoyuan Environmental Technology 6.244 million yuan for the contract and overdue payment losses, covering all case acceptance and preservation fees.

Additionally, several cases have entered enforcement stages. One related to the Xi’an Qihang project was ordered by the court to escalate enforcement, with bank deposits and assets of Enlighten Environment subsidiaries frozen and sealed. The Jiangsu Lianshui People’s Court issued an assistance enforcement notice, freezing a debt claim of 32.56 million yuan against Hunan Sander Kaitian Recycled Resources Technology Co., Ltd., with a three-year sealing period.

The announcement shows that many of Enlighten Environment’s previous lawsuits have been concluded and are now in the performance phase, with a total amount of 7.737 billion yuan pending fulfillment.

The company admits that, given the large overall litigation amount and some cases entering the performance stage, it faces significant litigation risks and liquidity pressures. The company is actively working to resolve litigation and enforcement risks, communicating with relevant parties to seek prompt and proper resolution of the cases.

Delisting Risk Warning

On March 12, Enlighten Environment issued the “Second Warning Notice Regarding Possible Delisting of the Company’s Stock.”

The announcement states that, based on preliminary calculations by the company’s finance department, its net assets attributable to the parent at the end of 2025 are expected to be negative. If confirmed after audit, the company will meet the criteria for delisting risk warning under Article 9.3.1, Item (2) of the Shenzhen Stock Exchange Listing Rules, and its stock abbreviation will be marked with “*ST.”

According to relevant rules, after the 2025 annual report is disclosed, the stock will be suspended for one trading day, and upon resumption, the delisting risk warning will be officially implemented. As of now, the audit of the 2025 annual report is still underway.

The earnings forecast indicates that Enlighten Environment expects a net profit attributable to shareholders of the listed company between -2.8 billion and -3.5 billion yuan in 2025, with a net profit excluding non-recurring gains and losses between -2.2 billion and -2.7 billion yuan.

Regarding the reasons for losses, the company explained that some of its controlling subsidiaries’ equity was auctioned off judicially, resulting in significant investment losses; accounts receivable continued to grow, leading to large credit impairment provisions; some transferred assets have not yet been settled, and some projects underperformed, resulting in asset impairment losses; additionally, the overall debt pressure is high, with some debts overdue, leading to heavy financial costs and penalties.

In fact, Enlighten Environment’s poor performance has been evident for some time. From 2022 to 2024, the company’s revenue declined for three consecutive years, and losses widened.

Financial data shows that in 2022, Enlighten Environment achieved revenue of 7.1 billion yuan, down 16.29% year-on-year, with a net loss of 964 million yuan attributable to the parent, and a non-recurring net loss of 863 million yuan; in 2023, revenue fell to 5.402 billion yuan, down 23.91%, with a net loss of 1.572 billion yuan and a non-recurring net loss of 1.5 billion yuan; in 2024, revenue was 5.245 billion yuan, down 2.92%, with a net loss of 3.058 billion yuan and a non-recurring net loss of 2.342 billion yuan.

(Edited by Dong Shuguang; reviewed by Wu Kezhong; proofread by Yan Yuxia)