Performance Significantly Revised Down, Net Assets Turn Negative, Meizhi Holdings Faces Delisting Risk Warning

AI Inquiry · From a Glorious Listing to Negative Net Assets, What Has Meizhi Co., Ltd. Experienced?

On the evening of March 17, Shenzhen Meizhi Decoration Design Engineering Co., Ltd. (002856.SZ) released a “2025 Performance Forecast Revision Announcement,” significantly lowering its previous annual performance expectations. After the revision, the company’s net profit attributable to the parent company is expected to widen its losses, and more importantly, the company forecasts that by the end of 2025, its owners’ equity will turn negative. This means that after the 2025 annual report is disclosed, the company’s stock may be subject to delisting risk warning (*ST) by the Shenzhen Stock Exchange.

Public information shows that Meizhi Co., Ltd. was established in November 1984 and listed on the Shenzhen Stock Exchange in March 2017. Its headquarters is located in Futian District, Shenzhen. It is a professional construction decoration design and construction enterprise integrating building decoration, curtain walls, and building electromechanical systems. The company’s main business is the design and construction of building decoration projects, mainly undertaking public building decoration, residential fine decoration, and curtain wall decoration projects. Its clients include transportation agencies, cultural industries, financial real estate, government agencies, and other large customers. The main revenue sources are decoration and renovation, and construction engineering, which together account for over 95%.

Since its listing, the company has maintained a foothold in the building decoration industry with stable project resources, but in recent years, industry environment and internal management issues have caused continuous performance pressure.

This performance forecast revision reveals only a small part of Meizhi Co., Ltd.‘s operational difficulties. The announcement shows that in its initial 2025 performance forecast disclosed on January 31, 2026, the company expected net profit attributable to the parent to be between -75 million and -112.5 million yuan, with net profit after non-recurring gains and losses between -58.32 million and -95.82 million yuan. After the revision, the forecasted net profit attributable to the parent is between -132 million and -198 million yuan, and net profit after non-recurring gains and losses between -148 million and -214 million yuan, representing an increase in expected losses of approximately 40% to 76%. Meanwhile, the company estimates that by the end of 2025, its owners’ equity will be between -40 million and -75 million yuan, turning from positive 106 million yuan at the end of the previous year, directly touching the core indicator for delisting risk warning.

Regarding the reasons for the downward revision, Meizhi Co., Ltd. explained in the announcement that as the 2025 financial audit progressed and after full communication with the auditors, the company, based on prudence, adjusted multiple financial data. Specifically, the company reduced its previously recognized deferred income tax assets, re-estimated the investment value of its associated subsidiaries considering their operational status and industry environment, and thoroughly reviewed and re-assessed accounts receivable and contract assets, prudently increasing impairment provisions. These measures collectively led to significant adjustments in the company’s performance and net assets, ultimately resulting in a forecasted negative net asset balance at the end of the period.

Looking back at recent financial performance, Meizhi Co., Ltd.'s operational situation has continued to deteriorate. Financial data shows that since 2021, the company has reported four consecutive years of negative net profit attributable to the parent, with cumulative losses exceeding 700 million yuan. The quarterly financial data for 2025 is also not optimistic: Q1 net profit loss of 21.24 million yuan, Q2 loss expanding to 34.76 million yuan, Q3 loss of 44.26 million yuan, with total assets shrinking from 1.827 billion yuan at the beginning of the year to 1.707 billion yuan at the end of Q3, while total liabilities remain above 1.6 billion yuan. The high asset-liability ratio and liquidity pressures are prominent.

Additionally, the company has intensified efforts to recover accounts receivable, leading to increased litigation costs, and its personnel reduction policies have caused temporary rises in labor costs, further worsening profitability.

Beyond ongoing financial losses, Meizhi Co., Ltd. has previously been penalized by regulators for corporate governance and information disclosure irregularities. In August 2022, the Shenzhen Securities Regulatory Bureau issued a correction order after investigation found issues such as undisclosed non-operational fund transactions with the original controlling shareholder, unauthorized loans to related parties without shareholder approval, irregular meeting records, and poor fund management.

Regulators required the company to rectify these issues within a set timeframe, urge the original controlling shareholder to repay misappropriated funds, and develop accounts receivable recovery plans. However, subsequent financial performance indicates that the effectiveness of these rectifications has not met expectations, with ongoing difficulties in recovering receivables and asset impairments continuing to trouble the company.

Based on the latest performance forecast and regulatory rules, it is highly likely that Meizhi Co., Ltd. will be subject to delisting risk warning. According to the revised “Shenzhen Stock Exchange Listing Rules” in 2025, if the company’s owners’ equity attributable to the parent at the end of 2025 is negative, its stock will be subject to delisting risk warning after the annual report is disclosed, with the stock abbreviation prefixed with “*ST.”

Currently, Meizhi Co., Ltd. has pre-communicated with its auditors regarding the performance forecast revision. There are no major disagreements, and the final financial data will be based on the audited annual report. However, the company has explicitly indicated that the possibility of negative net assets at year-end is high, and the pressure of delisting risk warning is already present.

It is worth noting that Meizhi Co., Ltd. expects to disclose its 2025 annual report by April 29, 2026. Before that, the company will issue at least two more risk warning announcements to fully alert investors to the delisting risk. Regarding future developments, the company states it will carefully analyze the reasons for the forecast revision, strengthen information disclosure review, and actively take measures to improve operations. However, given the intensified competition in the building decoration industry and the weak downstream demand in the real estate sector, whether the company can reverse losses and improve net assets remains uncertain.