Xinjiang International Industry Co Ltd

International Industrial announced on the evening of October 9 that its board of directors approved a proposal to withhold estimated liabilities. Based on a tax dispute, it calculated estimated liabilities of 107 million yuan as of September 30, 2026, which is expected to reduce the company's current-period profit by 107 million yuan. The company's net profit attributable to the parent for the first half of 2026 was 15.2598 million yuan, and this withholding amount is about seven times that net profit, which may cause its third-quarter 2026 results to swing from profit to loss. The tax dispute originated from a notice ordering correction within a prescribed period issued on June 17, 2025 by the Second Tax Office of the Urumqi High-tech Zone Taxation Bureau of the State Taxation Administration, which determined that the company's enjoyment of the Western Development corporate income tax preferential policy for 2022 was disputed, requiring it to pay back taxes of 66.7264 million yuan and a late payment penalty at 0.05 percent per day. The administrative lawsuit filed by the company was dismissed by the Tianshan District People's Court of Urumqi on August 31, 2026. On the same day, the company's board also approved the termination of the issuance of shares to specific investors and the withdrawal of application documents. This is the third version of a private placement plan that has failed to be implemented in the past four years. The 2025 version had a fundraising cap of 662 million yuan, to be fully subscribed by the controlling shareholder Xinjiang Rongneng. Financial data shows that as of June 30, 2026, the company achieved operating revenue of 922 million yuan, down 2.48 percent year on year, net profit attributable to the parent of 15.2598 million yuan, down 38.39 percent year on year, and net cash flow from operating activities of negative 265 million yuan, down 558.95 percent year on year.

At a shareholders' meeting held on September 28, International Industrial failed to pass a proposal to extend the validity period of its private placement resolution, with 70.90% of valid voting rights cast against it, all from minority shareholders. The controlling shareholder, Xinjiang Rongneng Investment Development Co., Ltd., holds 109.7089 million shares, a 22.82% stake, and abstained from voting on this item when attending the meeting in person. Since the votes in favor did not reach two-thirds of the valid voting rights of non-affiliated shareholders, the proposal was not approved. Another proposal to extend the board of directors' authorization was passed with a 92.53% approval ratio, but the actual opposition ratio from minority shareholders to this proposal was even higher, reaching 72.50%. It was the participation of the 109.7089 million shares held by Xinjiang Rongneng in the vote that changed the final outcome. The private placement plan launched by International Industrial in 2025 intends to raise no more than 662 million yuan, fully subscribed by Xinjiang Rongneng in cash. After deducting issuance expenses, all proceeds will be used to supplement working capital, and the subscribed shares will be locked up for 36 months. Based on the maximum issuance volume under the original plan, Xinjiang Rongneng's shareholding ratio would rise from 22.82% to 40.63%. The company cautioned that indicators such as earnings per share may be diluted in the short term after the issuance. In June this year, the company adjusted the original fixed issue price of 4.59 yuan per share to no less than 80% of the average stock trading price over the 20 trading days before the issuance date. In the first half of this year, International Industrial's net profit attributable to the parent company was 15.2598 million yuan, down 38.39% year-on-year. Net cash flow from operating activities was negative 265 million yuan, compared with negative 40.2857 million yuan in the same period last year. Accounts receivable at the end of the period were 1.135 billion yuan, up from 752 million yuan at the end of last year. Some industry insiders said that if the company revises the plan and resubmits it for review, it should first convene a board meeting to finalize the plan before submitting it to the shareholders' meeting for deliberation, and the process of re-performing the procedures may still generally take about half a month.