CHINA LIT (00772.HK) shares fell as much as 7% after the company said a subsidiary will pay approximately RMB300 million in supplementary enterprise income tax and late payment surcharges for 2020 to 2022. The charge will reduce profit attributable to equity holders by the same amount in 2026.
CHINA LIT (00772.HK) shares slid 7% after the company disclosed a RMB300 million tax liability for its Xinjiang subsidiary.
"Following a self-review prompted by a tax authority notice, the subsidiary identified tax risks and will make a supplementary payment of approximately RMB300 million for the years 2020 to 2022," the company said in a filing.
The stock opened 3.55% lower and touched an intraday low of HKD22.92 before recovering slightly to HKD23.04, down 7.02%. About 2.27 million shares changed hands, generating HKD52.9 million in turnover. Short-selling volume accounted for 22.1% of trading, or HKD30.5 million.
The payment covers enterprise income tax and late payment surcharges for the subsidiary's operations in Khorgos, Xinjiang. The company said the matter does not involve any administrative penalties and that the payment has been completed.
The RMB300 million charge, equivalent to about $41.5 million, will be recognized in the company's 2026 profit or loss, reducing profit attributable to equity holders by the same amount. The unexpected liability raises questions about tax compliance across the company's other subsidiaries.
The decline puts the stock near its session low, with elevated short-selling volume suggesting bearish positioning. Investors will watch for any further tax-related disclosures from the company's other subsidiaries.
This article is for informational purposes only and does not constitute investment advice.
