Universal Technologies Holdings Limited (Universal Tech) released a quarterly update outlining progress on liquidity enhancement and resolution of auditor concerns linked to its water-supply litigation exposures.

The group retained banking facilities totalling RMB1.05 billion (approximately HK$1.17 billion) as of 31 December 2025, of which RMB385.34 million (about HK$428.18 million) remained undrawn. All lines mature between October 2028 and March 2036, and the board expects renewal at expiry based on long-standing relationships with lenders.

Trade payables tied to the disputed water-supply business stood at HK$511.40 million at period-end. Management continues legal action while negotiating with the government-designated water plant to seek an amicable settlement.

Parallel talks are under way for a potential disposal of subsidiaries involved in part of the water-supply segment. Management targets agreement in 2Q 2026 and completion in 3Q 2026. A successful sale could resolve outstanding litigation amounts, remove the water-cost drag on margins and deconsolidate the related payables, materially improving liquidity. No binding terms have been signed to date.

Cost-control targets have been communicated to all business units to curb administrative and operating expenses. Directors, supported by the audit committee, have reviewed 12-month cash-flow forecasts and concluded the group can meet obligations and continue as a going concern.

The interim financial statements for the six months ended 31 December 2025 were not reviewed by the external auditor, who will reassess going-concern assumptions during the audit of results for the year ending 30 June 2026.

Shareholders are advised that negotiations may or may not lead to definitive agreements, and to exercise caution when dealing in Universal Tech shares.