XUNZHONG (02597.HK): Latest update on litigation against Zhongke Xinkong over computing power service contract
NewTimeSpace News: On 26 August 2026, Beijing Xunzhong Communication Technology Co., Ltd. (stock code: 02597) announced the latest update on litigation. In December 2025, the Company (as plaintiff) entered into a Computing Power Service Agreement with Beijing Zhongke Xinkong Innovation and Entrepreneurship Technology Development Co., Ltd. (Zhongke Xinkong, as defendant), under which Zhongke Xinkong was required to provide the Company with 256 high-performance intelligent computing node servers forming a computing cluster service, together with necessary system software and hardware technical support, for a service period of 36 months in total (to be performed in three phases of 12 months each), with the total amount of the first-phase computing power services being RMB 161.28 million (tax inclusive) and the computing power resource services to be activated on or before 30 January 2026. As Zhongke Xinkong failed to deliver the computing power services as agreed, constituting a fundamental breach, and failed to perform its delivery obligations even after the Company's reasonable demands, the purpose of the service agreement has been directly frustrated.
The announcement stated that the Company has filed a lawsuit with the People's Court of Tongzhou District, Beijing (the Tongzhou Court), which has accepted the case (case no. (2026) Jing 0112 Min Chu No. 27016), and received a summons from the Tongzhou Court on 25 August 2026, with the hearing scheduled for the afternoon of 22 October 2026. The Company has also applied for pre-litigation preservation of property, requesting the sealing and freezing of Zhongke Xinkong's bank accounts in the aggregate amount of RMB 40.00 million or other equivalent property. The principal claims of the Company include: rescission of the service agreement; payment of liquidated damages of RMB 161.28 million for the overdue delivery of computing power services; compensation for economic losses caused by third-party litigation against the Company resulting from the defendant's breach (tentatively calculated at RMB 40.00 million); compensation for the lawyer's fees incurred in defending the third-party litigation and the legal fees for this case; and that all litigation costs, preservation insurance guarantee fees and enforcement costs of this case be borne by Zhongke Xinkong.
To the best knowledge, information and belief of the directors after making all reasonable enquiries, this litigation is a measure taken by the Company to safeguard its lawful rights and interests through legal means, and as of the date of this announcement, the litigation has not had any material adverse impact on the Company's business, operations and financial position.
NewTimeSpace Disclaimer: All content herein is the original work of NewTimeSpace. Any reproduction, reprinting, or use of this content in any other manner must clearly indicate the source as "NewTimeSpace". NewTimeSpace and its authorized third-party information providers strive to ensure the accuracy and reliability of the data, but do not guarantee the absolute correctness thereof. This content is for reference only and does not constitute any investment advice. All transaction risks shall be borne by the user.
