Dongjiang Environmental Company Limited (stock code: 00895) will perform additional guarantee compensation obligations of RMB21.34 million after its controlling subsidiary, Mianyang Dongjiang Environmental Technology Co., Ltd., failed to meet loan repayments to Postal Savings Bank.

The payment, covering outstanding principal and interest, arises from a RMB260 million joint-liability guarantee granted in 2020. Intensifying competition in the hazardous-waste sector, lower treatment prices and sub-par waste-collection volumes have constrained the subsidiary’s cash flow, preventing timely debt servicing.

Following the upcoming payment, Dongjiang Environmental will book the RMB21.34 million as a receivable from Mianyang Dongjiang. Management has instructed the subsidiary to accelerate market expansion, cut operating costs and improve cash generation to repay the amount.

Under the Counter-Guarantee Agreement, Dongjiang Environmental has issued demand letters to the counter-guarantors and reserves the right to pursue legal or arbitration remedies to protect shareholder interests.

The company pledges ongoing disclosure of material developments and advises shareholders and potential investors to exercise caution when trading its shares.