Financial Risk Analysis of Huangshi Group's High External Guarantees

Based on currently available information, I will provide a detailed analysis of

. It should be noted that due to data access limitations, this analysis will be based on a general financial risk framework for external guarantees.

External guarantee refers to the guarantee provided by an enterprise for the debt of a third party. When the guaranteed party fails to fulfill its debt obligations, the guarantor must assume joint and several liability. For listed companies, high external guarantees are a double-edged sword—they may support the group’s business development, but they may also bring significant financial risks.

• Risk Nature
  : The debt from external guarantees is not reflected in the liability items of the balance sheet and belongs to “contingent liability”
• Potential Impact
  : Once the guaranteed party defaults, the guarantor must immediately fulfill the repayment obligation, which may lead to sudden large expenditures
• Typical Cases
  : Many listed companies have experienced performance reversals and sharp stock price fluctuations due to guarantee compensation

• Fund Freeze
  : When the guarantee amount is too large, a large amount of funds may be frozen by banks as margin
• Reduced Financing Capacity
  : Banks will consider the external guarantee amount when evaluating the enterprise’s credit line
• Cash Flow Pressure
  : When compensation occurs, the enterprise needs to use operating cash flow or borrowings to repay debts

• Explicit Off-Balance Sheet Liabilities
  : After compensation occurs, the liability ratio may rise sharply
• Deterioration of Financial Indicators
  : Affects key indicators such as ROE and current ratio
• Refinancing Difficulties
  : High liability ratio may lead to increased financing costs or closed financing channels

• Suspicions of Interest Transfer
  : High guarantees are often accompanied by related-party transactions, which may involve interest transfer
• Signal of Internal Control Deficiencies
  : Excessive related-party guarantees may reflect imperfect corporate governance structures
• Regulatory Attention
  : Exchanges and the CSRC pay high attention to such behaviors, which may lead to regulatory letters or penalties

• Legal Disputes
  : Disputes over compensation may lead to litigation, resulting in legal costs and reputation losses
• Bank Blacklist
  : Multiple defaults may lead to being included in the inter-bank market blacklist
• Supply Chain Impact
  : A decline in credit ratings may affect cooperation with suppliers

• Profit Erosion
  : Compensation losses directly erode net profits
• Reduction of Shareholder Equity
  : A decline in net assets leads to a reduction in net assets per share
• Stock Price Pressure
  : Expectations of performance decline lead to investor sell-offs

• Guarantee Chain Risk
  : In group enterprises, guarantees by subsidiaries may trigger chain reactions
• Industry Risk Transmission
  : If the guaranteed party belongs to a high-risk industry, risks may backfire on the guarantor
• Regional Risk
  : Guarantee circle issues in some regions may lead to regional financial risks

Warning Indicator	Risk Threshold	Investor Response
External guarantee as a percentage of net assets	Over 50%	High vigilance
Guarantee concentration (top five guaranteed parties)	Over 60% of total guarantee amount	Diversify risks
Financial status of the guaranteed party	Asset-liability ratio over 80%	Pay attention to compensation possibility
Guarantee term structure	High proportion of short-term guarantees	Liquidity pressure

1. Key Focus
   : Regularly check the guarantee details in the “Contingent Events” notes of the company’s annual report
2. Risk Assessment
   : Calculate the ratio of external guarantee amount to net assets to assess potential risk exposure
3. Dynamic Tracking
   : Monitor the operating status and financial health of the guaranteed party
4. Diversified Investment
   : If the company’s guarantee risk is too high, it is recommended to appropriately reduce the position ratio

: High external guarantees are an important risk point for listed companies, and investors should include them as core considerations in their investment decisions. It is recommended to fully understand the company’s guarantee policy, the qualifications of the guaranteed party, and historical compensation records before making investment decisions.

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