The release of a second risk warning announcement regarding the potential termination of its stock listing by Xiong'an New Power Technology Co., Ltd. (hereinafter referred to as "New Power") has drawn significant market attention. The company, due to receiving negative opinions on its financial reporting internal controls for two consecutive fiscal years, saw its stock placed under delisting risk warning (*ST) starting April 30, 2026. Should the 2026 internal control audit yield the same adverse result, the company faces compulsory delisting.

Internal Control Issues Trigger Warning

According to the announcement, New Power's financial reporting internal controls for the 2025 fiscal year received a negative opinion from Lianada Certified Public Accountants, and the 2024 fiscal year controls similarly received a negative opinion from Zhongxingcai Guanghua Certified Public Accountants. Per Article 10.4.1(6) of the Shenzhen Stock Exchange ChiNext Listing Rules (2026 Revision), a company's stock trading is placed under delisting risk warning if its financial reporting internal controls receive an adverse or disclaimer of opinion for two consecutive fiscal years.

More critically, according to Article 10.4.18(6) of the same rules, if, after being placed under such a warning for the above reason, the company's financial reporting internal controls for the first subsequent fiscal year (i.e., 2026) again receive an adverse or disclaimer of opinion, the Shenzhen Stock Exchange will terminate the listing of the company's stock.

This makes the outcome of the 2026 internal control audit the decisive factor for New Power's continued listing status.

Going Concern Also in Question

Beyond the internal control issues, New Power's financial fundamentals are also under pressure. The announcement indicates that the company's lower of net profit before or after non-recurring gains and losses has been negative for the last three fiscal years. Furthermore, the audit report for the 2025 fiscal year issued by Lianada Certified Public Accountants included language stating there is "significant uncertainty regarding the company's ability to continue as a going concern." Consequently, the company's stock continues to be subject to other risk warnings (ST).

Thus, New Power is simultaneously under both a delisting risk warning (*ST) and other risk warnings (ST), placing it in a severe predicament.

Remedial Actions Underway with Uncertain Outcome

In response to the delisting risk, the company's board stated it is actively promoting the rectification of internal controls. The announcement disclosed that the company is continuously advancing a comprehensive self-inspection and optimization of internal controls. Building on previous efforts to identify control deficiencies and rectify key business processes, the company plans to engage external professional consulting firms to implement a step-by-step enhancement of internal controls. This includes a comprehensive diagnosis of internal control system flaws, compiling a list of issues, revising supporting management systems, and optimizing business processes and approval authorities to establish an internal control system that is "comprehensive, executable, and monitorable." Concurrently, the company is conducting compliance training for directors and senior management to reinforce responsibility for internal control execution, improve corporate governance, and solidify the foundation for compliant operations.

Regarding the inter-period cost and expense issues raised in the audit, the finance department is continuously reviewing related documentation to address the root cause. However, whether these rectifications will be effective by the 2026 audit deadline remains highly uncertain.

Ongoing Risk Warnings Mandated

In accordance with Article 10.4.10 of the Shenzhen Stock Exchange ChiNext Listing Rules, during the period a company is under a delisting risk warning, it must disclose a risk warning announcement regarding potential termination of listing once a month. Within one month after the end of the fiscal year, another disclosure is required. Thereafter, and until the disclosure of that year's internal control audit report, a disclosure is required every ten trading days. The current announcement is the second risk warning, and the company will continue to issue related announcements as per the rules.

For investors holding New Power stock, the final conclusion of the 2026 internal control audit report will be the key determinant of the company's fate. Before the official result is released, the company's ongoing disclosures regarding rectification progress and risk warnings warrant close attention. Rational investment and risk awareness should be the primary principles at this stage.