Beijing Xunzhong Communication Technology Co., Ltd. (Xunzhong) has initiated legal proceedings against Beijing Zhongke Xinkong Innovation and Entrepreneurship Technology Development Co., Ltd. (Zhongke Xinkong) after the latter failed to deliver contracted computing-power services.

In December 2025, the two parties signed a Computing Power Service Agreement under which Zhongke Xinkong was to supply 256 high-performance intelligent computing node servers, along with related software and hardware support, in three consecutive 12-month phases. The first-phase service, valued at RMB161.28 million, was due to be activated by 30 January 2026 but was not delivered, constituting what Xunzhong terms a fundamental breach of contract.

Xunzhong filed its case with the Beijing Tongzhou District People’s Court, which has accepted the suit under case number (2026) Jing 0112 Min Chu 27016. The court has scheduled a hearing for the afternoon of 22 October 2026. Prior to trial, Xunzhong requested a pre-litigation asset freeze on Zhongke Xinkong’s bank accounts or equivalent assets totaling RMB40.00 million.

Key claims by Xunzhong include: 1) legal termination of the service agreement, 2) liquidated damages of RMB161.28 million for overdue delivery, 3) compensation of approximately RMB40.00 million for economic losses tied to third-party litigation, 4) reimbursement of all related legal fees, and 5) full responsibility for litigation, property-preservation, and enforcement costs.

Xunzhong’s board states that, as of the announcement date (26 August 2026), the lawsuit has not had a material adverse effect on the group’s business or financial position. Management will continue to pursue legal remedies and disclose further developments in accordance with Hong Kong Listing Rules. Shareholders and potential investors are advised to exercise caution when dealing in the company’s shares.