*ST Jingfeng subsidiary loses second-instance appeal in construction contract dispute, involving approximately 32.18 million yuan

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Hunan Jingfeng Pharmaceutical Co., Ltd. (Stock abbreviation: *ST Jingfeng, stock code: 000908) announced on March 18 that it disclosed a construction contract dispute involving its subsidiary Shanghai Jingfeng Pharmaceutical Co., Ltd. (hereinafter referred to as “Shanghai Jingfeng”) and Shanghai Baoji Pharmaceutical Co., Ltd. (hereinafter referred to as “Baoji Pharmaceutical”) with Shanghai Jingfeng Construction Group Co., Ltd. (hereinafter referred to as “Jingfeng Construction”). After a second-instance trial by the Shanghai Second Intermediate People’s Court, the appeal was rejected, and the original judgment was upheld. The company has made provisions for related expected liabilities and financial expenses based on the court’s ruling, which will be included in the 2025 financial results. The company also stated that it has filed for a retrial in accordance with the law, and the final actual impact will be subject to the court’s final ruling.

The announcement shows that the case originated from the “Industrialization Center Project Phase II Construction Contract” signed on June 8, 2020, between Shanghai Jingfeng and Jingfeng Construction, with a total contract price of 40.48 million yuan. In February 2022, the two parties and Baoji Pharmaceutical signed a “Tripartite Agreement” regarding the remaining project payments, compensation, and buyback. Due to issues with payment for the project, Jingfeng Construction filed a lawsuit with the Shanghai Baoshan District People’s Court in January 2025.

In August 2025, the Shanghai Baoshan District People’s Court issued a first-instance judgment requiring Shanghai Jingfeng to pay Jingfeng Construction 25.6365 million yuan for the project and corresponding interest (calculated at an annual rate of 6% from January 1, 2022, until actual payment). Baoji Pharmaceutical was held jointly liable for the debt, and Jingfeng Construction had priority rights to recover within the scope of the owed project funds. Shanghai Jingfeng appealed the first-instance judgment to the Shanghai Second Intermediate Court, requesting a ruling that Baoji Pharmaceutical should bear the payment responsibility and that the company itself would not bear the litigation costs.

After review, the Shanghai Second Intermediate Court recently issued Civil Judgment No. (2025) Hu 02 Min Zhong 11236, which rejected the appeal and upheld the original judgment. The case’s second-instance court acceptance fee of 169,982 yuan was split equally between Shanghai Jingfeng and Baoji Pharmaceutical.

According to the announcement, the total amount involved in this lawsuit is approximately 32.1804 million yuan, broken down as follows:

*ST Jingfeng stated that, aside from the above lawsuit, the company and its controlling subsidiaries have no other major lawsuits or arbitration matters that need disclosure but have not been disclosed. This lawsuit has no significant impact on the company’s daily operations, and the final financial impact will depend on the retrial outcome and actual enforcement. The company will continue to monitor the case progress and fulfill its information disclosure obligations in a timely manner according to relevant regulations.

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Editor: Xiao Lang Kuai Bao