PV Shipment Returned To Vietnam After U.S. Entry Ban, Losses Under Review

Recently, Abalance Corporation announced that certain photovoltaic modules exported to the United States by its consolidated subsidiary, Vietnam Sunergy Joint Stock Company (VSUN), have been detained and denied entry by U.S. Customs and Border Protection (CBP).

According to the official notice issued by CBP, following customs review, the goods in question were evaluated under the Uyghur Forced Labor Prevention Act (UFLPA). Since the company was unable to provide sufficient documentation to qualify for an exemption, the modules were ruled inadmissible to the United States. The ruling took effect on January 11, 2026.

As a result of the entry ban, the corresponding U.S. regional sales revenue for the shipment cannot be recognized. Part of the PV modules has already been arranged for return to Vietnam, incurring related logistics and disposal costs. In response to the CBP ruling, VSUN has retained specialized U.S. legal counsel to submit supporting evidence to CBP and actively defend its case, in order to prove that no violations have occurred.

Regarding the follow-up disposal of the detained goods:

If the goods pass CBP review at a later stage, they may enter the U.S. market for normal sale.

If the re-examination is unsuccessful, the company will arrange to resell the modules to overseas markets outside the United States.

Since the resale price is expected to be lower than the original U.S. market price, a decline in the profit margin of the related business is anticipated.

The company emphasized that neither Abalance nor VSUN has procured or used raw materials originating from the Xinjiang region. All products involved in this incident were manufactured in strict accordance with the Group's procurement standards and quality management system. Moving forward, the company and VSUN will fully comply with CBP regulations, take necessary measures such as re-exporting the goods, and work with U.S. legal advisors and external professional institutions to properly handle subsequent procedures.

Potential losses related to this incident - including port detention fees, warehousing expenses, return shipping, and re-export costs - are still under detailed calculation, and an accurate total loss amount cannot yet be estimated.

However, based on preliminary calculations, the incident is expected to result in a loss of approximately 3 to 5 billion Japanese yen in the consolidated financial results for the fiscal year ending March 2026. As the relevant expenses have not been finalized, the exact loss figure remains unconfirmed and is expected to be determined by mid-May. The company will issue a separate announcement promptly once the information meets disclosure requirements.