In a contract dispute case, HaTie Technology's wholly-owned subsidiary and its branch were sued.

Ha Tie Technology (688459) announced on the evening of March 20 that its wholly-owned subsidiary, China Railway Printing Co., Ltd. (hereinafter referred to as “China Railway Printing”), and the Sanhe branch of China Railway Printing (hereinafter referred to as “China Railway Printing Sanhe Branch”) recently received civil litigation materials including a complaint and summons served by the People’s Court of Tongzhou District, Beijing (hereinafter referred to as “Tongzhou District Court”). The Tongzhou District Court has accepted the contract dispute case filed by Beijing Baohong Specialty Paper Co., Ltd. (hereinafter referred to as “Beijing Baohong”) against China Railway Printing and China Railway Printing Sanhe Branch.

According to the introduction, on December 30, 2014, Beijing Baohong acted as Party B, while China Railway Printing (formerly known as China Railway Publishing House Printing Factory) acted as Party A. The two parties signed a “Technical and Production Cooperation Agreement,” agreeing to cooperate in the production and technology of magnetic card paper. Article 3, Clause 9 of the agreement stipulates that Party A guarantees that the procurement volume of magnetic card paper for 2015 will not be less than 400 tons, and the procurement volume for subsequent years will not be less than 600 tons. Party B must ensure that the equipment provided can meet the production requirements for the aforementioned output. Otherwise, Party B must compensate Party A for any economic losses incurred. Article 5, Clause 1 of the agreement states that both parties must strictly adhere to all terms of the contract, and neither party may change or terminate the contract midway without the other party’s consent. If either party violates the contract, they will be liable for all losses incurred by the other party due to the violation within one year from the date of the violation, and late compensation will incur a daily penalty of 0.5% on the amount owed. Article 5, Clause 7 stipulates that the validity period of this agreement is 10 years, and whether to continue cooperation will be determined by both parties through negotiation six months before the agreement expires.

After the agreement was signed, Beijing Baohong utilized all of its production technology, product technology, and related equipment such as coating machines to invest in production and incurred relevant costs for the production of magnetic card paper. Both parties had been fulfilling the agreement as stipulated in the early stages. From 2020 to 2024, China Railway Printing only purchased 434.041 tons of magnetic card paper from the plaintiff, which is a shortfall of 2565.959 tons compared to the minimum procurement volume stipulated in the agreement, resulting in a cost difference of 69.7941 million yuan.

After multiple communications from Beijing Baohong, China Railway Printing still did not stop its breach of contract, and China Railway Printing also purchased magnetic card paper from other third parties multiple times, constituting a breach of contract.

Beijing Baohong’s litigation request is for the court to order China Railway Printing and China Railway Printing Sanhe Branch to compensate the plaintiff for breach of contract damages amounting to 69.7941 million yuan; the litigation fees and preservation fees for this case shall be borne by China Railway Printing and China Railway Printing Sanhe Branch.

Ha Tie Technology stated that as of the announcement date, this lawsuit has not yet been heard in court, and the outcome of the lawsuit is uncertain. The amount involved is only the plaintiff’s claim, and it is currently not possible to estimate the potential impact of this significant lawsuit on the company’s profits for the current or future periods. The company will conduct corresponding accounting treatment based on relevant accounting standards and the results of the case.

Ha Tie Technology has established a comprehensive industrial chain technology system covering ten professional fields including railway vehicles, machinery, civil engineering, electrical engineering, power supply, freight, and urban rail transit. Its product matrix includes online dynamic safety detection solutions for a full range of rail transit equipment such as high-speed trains, passenger cars, freight cars, locomotives, and subways, achieving intelligent monitoring in multi-dimensional interactive scenarios of ground-vehicle-network.

The performance report disclosed by Ha Tie Technology for the year 2025 indicates that during the reporting period, the company achieved total operating revenue of 1.13 billion yuan, a year-on-year increase of 2.16%; achieved operating profit of 134 million yuan, a year-on-year decrease of 9.74%; achieved total profit of 134 million yuan, a year-on-year decrease of 8.91%; achieved net profit attributable to shareholders of the parent company of 111 million yuan, a year-on-year decrease of 11.55%; achieved net profit excluding non-recurring gains and losses of 107 million yuan, a year-on-year decrease of 15.86%.

Ha Tie Technology stated that the company’s overall operations remained stable during the reporting period. In terms of market expansion, the company adhered to a market-oriented approach, steadily expanding market share through consolidating traditional business advantages and laying out emerging fields as a dual driving force. In terms of technological innovation, the company increased investment in the research and development of new products and technologies, with multiple R&D projects making positive progress. The decline in the company’s net profit is mainly attributed to a decrease in cash management income year-on-year and increased R&D investment.