HC Group Inc. announced that PricewaterhouseCoopers (PwC) resigned on 20 March 2026 at the Board’s request, and Rongcheng (Hong Kong) CPA Limited has been appointed as auditor from 23 March 2026 until the next annual general meeting.

PwC’s resignation letter highlighted three unresolved areas:

1. B2B prepayments and refunds – large, same-month payments lacked purchase orders or contracts, and several suppliers shared contact details with Group subsidiaries. PwC recommended an independent investigation and additional audit procedures.

2. Cotton trading logistics – PwC sought detailed analysis of prepaid transportation fees and related government subsidies.

3. Going-concern assessment – PwC requested 12-month cash-flow forecasts, underlying assumptions, and stress-testing aligned with significant liabilities.

PwC stated it had not received sufficient information, nor a timeline to complete additional procedures, and projected extra audit fees. HC Group formed a committee under the Audit Committee, engaged a professional adviser to examine supplier transactions, and is reassessing accounting treatments and negotiating with lenders on cash-flow assumptions. Disagreement on timetable and fees led the Board to seek a new auditor.

The Audit Committee selected Rongcheng after reviewing its proposal, Hong Kong listed-company experience, independence, market standing, and team resources, concluding the change serves shareholder interests.

Trading in HC Group shares was suspended from 18 March 2026 and remains halted, as audited 2025 results are unlikely to be finalised by 31 March 2026. The company will issue further announcements when appropriate, and investors are advised to exercise caution.