Dongjiang Environmental Company Limited (Dongjiang Environmental) will pay a further RMB1.20 million in current loan interest to Postal Savings Bank after its controlling subsidiary, Mianyang Dongjiang Environmental Technology, failed to meet repayment obligations on a RMB260 million loan facility.

The payment stems from a joint-liability guarantee Dongjiang Environmental provided in 2020 to support Mianyang Dongjiang’s bank financing. Persistent industry competition has curbed waste-treatment volumes and pressured pricing, leading to liquidity constraints at the subsidiary and repeated shortfalls in loan servicing.

Following earlier compensation instalments disclosed between September 2024 and March 2026, the parent will now execute another guarantee payout, which it has booked as a receivable from Mianyang Dongjiang. Management stated it will push the subsidiary to enhance market collection efforts, cut costs and improve operations to expedite repayment.

Concurrently, Dongjiang Environmental has issued demand letters to the counter-guarantors and lodged a lawsuit against Diwosi and Xinkeyuan in the Mianyang High-tech Industrial Development Zone People’s Court to enforce counter-guarantee responsibilities.

The company pledged ongoing disclosure of material developments and advised shareholders and potential investors to exercise caution when trading its shares.