Sankeshu Receives 6.74 Million Compensation from Evergrande Dispute

On April 1, 2025, Sankeshu (603737) announced the verdict of a first-instance judgment regarding a contract dispute between its wholly-owned subsidiary, Fujian Sankeshu Building Materials Co., Ltd. (referred to as "Sankeshu Materials"), and a company within the Evergrande Group. The court awarded Sankeshu a total compensation of 6.74 million yuan. This case is currently in the first-instance judgment phase, involving a principal amount of 192 million yuan.

According to the announcement, Sankeshu Materials received a civil judgment from the Shenzhen Intermediate People's Court, which includes a refund of 200,000 yuan in intention deposit from Evergrande Real Estate Group (Shenzhen) Co., Ltd. (Defendant 3). Additionally, Shenzhen Yongheng Real Estate Co., Ltd. (Defendant 1) and Defendant 3 are ordered to jointly refund 780,000 yuan for the purchase price and to return the deposit of 5.76 million yuan in double. The total compensation amounts to 674,000 yuan. As this is a first-instance ruling, the involved parties have the right to appeal.

Sankeshu indicated it would continue to monitor the case and protect its legal rights. On March 13, 2025, the company disclosed that in June 2021, due to a rejected commercial acceptance bill from an Evergrande-affiliated company, Sankeshu Materials negotiated with Shenzhen Yongheng to offset debts with 49 residential units. The materials company paid 200,000 yuan in intention deposit, 2.88 million yuan in deposit, and 777,600 yuan in price difference. However, Shenzhen Yongheng and Evergrande failed to sign a formal sales contract and sold the properties to others, leading to the dispute.

Founded in 2002 and listed on the Shanghai Stock Exchange in 2016, Sankeshu has achieved rapid growth, becoming one of the fastest-developing companies in the industry. The group currently invests in and controls over 20 companies, with major centers in Shanghai, Guangzhou, and Beijing, and operates 13 production bases nationwide. After over two decades, Sankeshu has emerged as the largest domestic paint manufacturer in China and ranks among the top 13 global paint companies.

According to its performance forecast, Sankeshu expects a net profit attributable to shareholders for 2024 of between 310 million and 420 million yuan, representing a year-on-year increase of 78.63% to 142.02%. The company anticipates a net profit of between 144.1 million and 254 million yuan, excluding non-recurring gains and losses, which would be a year-on-year increase of 227.33% to 477.13%. For the first three quarters of 2024, Sankeshu reported revenues of 9.146 billion yuan, with product sales revenue reaching 8.768 billion yuan, a year-on-year growth of 1.51%.