China Student Union (03332): Using reserves to offset losses

Zhitong Finance App News, Zhongsheng Union (03332) issued an announcement. In order to actively promote the company's high-quality development and enhance its ability to generate returns for investors, the board of directors of the Company decided to use reserves to offset the cumulative loss (use of reserves) on December 31, 2025 in accordance with relevant laws and regulations.

The Company's annual report for the year ended December 31, 2025 is mentioned. As of December 31, 2025, the parent company's cumulative loss amount was approximately RMB 306 million. As of December 31, 2025, the parent company's capital reserves were approximately RMB 544 million, while its statutory surplus reserves were approximately RMB 47.3 million.

The parent company's cumulative losses on December 31, 2025 were mainly due to the operating results of previous years. The portion of the capital reserve intended to be used to offset cumulative losses is entirely derived from capital (share) premiums paid by the Company's shareholders (shareholders) in cash, while the statutory surplus reserves stem from profit rather than shareholders' cash contributions.

According to the relevant provisions of the “Company Law of the People's Republic of China”, the “Notice Concerning Financial Processing Issues after the Implementation of the Company Law and Foreign Investment Law” issued by the Ministry of Finance of China, other relevant laws, regulations and regulatory documents, and the provisions of the company's articles of association, the board of directors decided to use the parent company's capital reserves of approximately RMB 258.7 million and statutory surplus reserves of approximately RMB 47.3 million (total approximately RMB 306 million) to offset the parent company's cumulative losses of RMB 306 million. The use of reserves will be limited to reducing cumulative losses to zero on December 31, 2025.

After the reserve utilization is completed, on December 31, 2025, the parent company's capital reserves will be reduced to approximately RMB 285.5 million, the parent company's statutory surplus reserves will be reduced to zero, and the parent company's cumulative losses will be fully offset to RMB 0. The use of reserves will help the company enhance its ability to generate returns for investors and support the company's high-quality development.