There are two reasons for the continuous decline, namely impairment of long-term equity investments and bad debts in accounts receivable.

According to Baili Technology’s performance announcement, the specific reason is that it is estimated that an impairment provision of approximately 200 million yuan will be made for the equity investment in Shanxi Lubao Xinghai New Materials Co., Ltd., and some customers still owe money. It took a long time and failed to collect repeatedly. The collection of money was stagnant and was expected to be difficult to collect. As a result, bad debt provisions of about 550 million yuan were made for overdue accounts receivable, which caused the stock to plummet.

Baili Technology was disciplined, the asset transaction parties were also named, and the company’s profit forecast was reduced by about 96.09%.