Yihua Lu's Dilemma: Overdue Debt and a Pre-loss of Over 6.9 Billion Yuan in Three Years

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On the evening of April 2, Easylink released an announcement stating that as of the date of the announcement, the company had accumulated overdue debts totaling RMB 63.48 million that had not been repaid.

Easylink, which has been posting consecutive losses in 2023 and 2024, is expected to incur losses of RMB 2.176 billion—RMB 2.791 billion in 2025. Its cumulative losses over three years are expected to reach RMB 6.931 billion—RMB 7.546 billion.

RMB 63.48 million debt overdue

Easylink is a state-owned enterprise (SOE) listed company that is controlled by China Electronics Technology Group Corporation, a central government-owned entity. It is a traffic data service provider.

In its April 2 evening announcement, Easylink stated that, based on statistics and verification by the relevant departments of the company, as of the date of the announcement, the company’s accumulated overdue debts totaling RMB 63.48 million had not been repaid, accounting for 8.71% of the company’s audited net assets for fiscal year 2024.

Easylink’s overdue debts totaling RMB 63.48 million involve 14 transactions. Creditors include China General Nuclear International Financial Leasing (Tianjin) Co., Ltd., Hesheng Financial Leasing (Shanghai) Co., Ltd., AVIC International Financial Leasing Co., Ltd., Beijing Bank Co., Ltd. Zhongguancun Sub-branch, and others. Among them, Beijing Bank Co., Ltd. Zhongguancun Sub-branch has the highest amount involved—9 notes totaling RMB 38.5776 million.

Image source: company announcement

In response, Easylink said that it will continue to actively negotiate with creditors, formulate relevant contingency plans, and strive to reach consistent opinions with creditors as soon as possible on debt resolution solutions. At the same time, the company will raise funds for debt repayment by strengthening cost control and accelerating the collection of accounts receivable, among other measures, to resolve the issue of overdue debts as soon as possible.

Easylink also said that due to the debt default/overdue situation, the above-mentioned creditors may take property preservation measures, including but not limited to freezing assets, and the company may need to pay related default/penalty fees and other expenses arising from this, and may also face risks such as litigation and arbitration.

In addition, on March 20, Easylink released an announcement regarding restrictions on high consumption imposed on the company and its legal representative.

The announcement from Easylink stated that in the case involving a service contract dispute between Shidai Lingyu and the company, after being heard by the People’s Court of Shijingshan District, Beijing, the court ruled that the company must pay Shidai Lingyu RMB 2.14 million for contract payments and amounts such as litigation fees. Because the company did not pay the above amounts within the period specified in the enforcement notice, upon Shidai Lingyu’s application for enforcement, the court imposed restrictions on consumption on the company and its legal representative, Xiao Yi, by restricting consumption.

In addition, Easylink said that within any consecutive twelve-month period, as a defendant, the company and its controlling subsidiaries have an accumulated total amount involved in lawsuits and arbitration cases of RMB 57.1165 million, across 22 cases.

Or may face delisting risk warning

On January 30, Easylink released a profit warning announcement stating that it expects net losses of RMB 2.176 billion—RMB 2.791 billion in 2025; net losses after excluding non-recurring items of RMB 2.242 billion—RMB 2.805 billion.

Regarding its performance losses, Easylink said that because the company has large fixed expenditures such as finance costs, it has not yet achieved a turnaround in operations to profitability. According to the Accounting Standards for Enterprises, the company conducts impairment tests on data lake-related assets and certain equity investments in which the business situation has changed, among other items. Based on the results of the tests, recording asset impairment provisions is the main reason the company formed large losses.

The company said it will intensify efforts to improve quality and efficiency, expand its advantageous businesses, and explore emerging businesses. At the same time, it will further reduce costs and increase efficiency, reform the organizational structure, control and reduce cost spending, and strive to achieve an operating turnaround to profitability as soon as possible.

It is worth noting that Easylink posted losses of RMB 1.89 billion and RMB 2.865 billion in 2023 and 2024, respectively. Its cumulative losses over the three years 2023, 2024, and 2025 are expected to reach RMB 6.931 billion—RMB 7.546 billion.

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Editor: Yang Hongbo