Chuangxin Industries (HKG:2788) said its unit Inner Mongolia Chuangyuan Metal may be liable to pay 400 million yuan to 500 million yuan in taxes as it undergoes a so-called tax guidance because of its inclusion in the preferential tax policy for high-tech enterprises, according to a filing with the Hong Kong bourse Monday.

The aluminum company's shares fell over 4% in morning trade Tuesday.

Chuangxin Industries said it has sufficient cash and bank deposits to cover the potential tax payment and the issue is not expected to have any material adverse effect on the group's overall financial condition.