ST Jinglan's stock price "three consecutive rises": Controlling shareholder defaults on performance compensation, expected loss exceeds 150 million yuan in 2025

Amid the noise of the capital markets, the frenzy over stock prices often masks the true quality of a company’s fundamentals.

On the evening of February 4th, ST Jinglan (also known as Jinglan Technology, SZ000711) issued an announcement regarding abnormal fluctuations in its stock trading. The company’s stock price closed with a cumulative deviation of over 15.97% in three consecutive trading days.

However, behind the “three consecutive rises” in stock price, ST Jinglan faces significant challenges in its fundamentals: tight on cash, overdue performance compensation payments from the controlling shareholder, and an even larger projected loss in 2025. Just over a month ago, the company’s controlling shareholder was publicly criticized by the Shenzhen Stock Exchange and ordered to rectify by the Heilongjiang Securities Regulatory Bureau for breaching performance commitments.

The company self-claims “no major changes”

According to relevant regulations from the Shenzhen Stock Exchange, ST Jinglan’s stock trading on February 2nd, 3rd, and 4th, 2026, saw the closing price deviation exceed 15.97% for three consecutive days, constituting abnormal stock trading fluctuations.

In response to market volatility, the board of ST Jinglan quickly issued a “calming agent.” The announcement clearly states that there have been no significant changes in the company’s operational situation or internal and external business environment recently. Upon investigation, the company’s controlling shareholder and actual controller did not buy or sell the company’s stock during the abnormal trading period. The company also confirms that neither it nor its controlling shareholder or actual controller has any major undisclosed matters or ongoing major planning stages related to the company.

This means that the recent sharp rise in stock price lacks substantial positive support.

A reporter from Daily Economic News notes that beneath the flashy appearance of the stock price increase, ST Jinglan’s operational status remains in a “winter.” Although the company’s revenue is expected to grow in 2025, its main business is still in a strategic transformation phase and has not yet achieved stable profitability.

Looking back at the first three quarters of 2025, ST Jinglan’s revenue increased by 310.85% year-on-year to 3.32 billion yuan, but its net profit attributable to the parent company was a loss of 105 million yuan, further widening the loss compared to the same period last year.

More concerning is that the company has been in continuous loss for several years. After completing bankruptcy reorganization at the end of 2023, the net profit attributable to shareholders of the listed company, excluding non-recurring gains and losses, was -119 million yuan in 2024.

According to ST Jinglan’s “2025 Performance Forecast,” the net profit attributable to shareholders after excluding non-recurring gains and losses in 2025 is expected to be between -220 million yuan and -150 million yuan, further expanding the loss compared to 2024.

In response, ST Jinglan stated in its February 4th announcement: Although revenue is expected to grow in 2025, the main business remains in a strategic transformation period and has not yet achieved stable profitability. Whether the company can successfully turn losses into profits in the future depends on multiple uncertain factors, including industry cycle fluctuations, market price changes, cost control effectiveness, the recovery of financing capabilities, and the success of new business initiatives.

ST Jinglan sinks into a liquidity quagmire

If operational losses are a “chronic disease,” then the breach of performance compensation by the controlling shareholder and the company’s liquidity crisis are urgent “acute diseases.”

During the 2023 restructuring, the controlling shareholder, Yunnan Jiajun Target Material Technology Co., Ltd. (hereinafter “Yunnan Jiajun”), made a “military order,” promising that ST Jinglan’s net profit after non-recurring gains and losses in 2024 would not be less than 30 million yuan.

However, reality was harsh. After calculations, ST Jinglan’s actual net profit after non-recurring gains and losses in 2024 was -22.0851 million yuan, triggering an obligation to pay 52.0851 million yuan in performance compensation.

As of the announcement date on February 4th, 2026, ST Jinglan had only received 6 million yuan of compensation, with the remaining 46.0851 million yuan overdue. This breach of contract prompted regulatory responses. The Shenzhen Stock Exchange issued a warning to Yunnan Jiajun, and the Heilongjiang Securities Regulatory Bureau ordered corrective measures.

Adding to the woes, new compensation risks are looming. A Daily Economic News reporter notes that, according to the performance forecast, the company’s 2025 performance will fall significantly below the 40 million yuan minimum commitment stipulated in the “Restructuring Investment Agreement,” likely triggering new, substantial cash compensation obligations.

Even more frightening than breach is the lack of funds. As of the end of Q3 2025, ST Jinglan’s cash on hand was only 9.1263 million yuan.

In its announcement, ST Jinglan admitted that it is still in a strategic transformation phase, with several subsidiaries planning projects requiring capital investment. If the relevant funds cannot be fully secured as planned, it could lead to project delays, slower-than-expected expansion of subsidiaries, and unmet project milestones, thereby affecting the company’s performance growth and overall strategic transformation.

Although ST Jinglan announced in December 2025 that it planned to initiate the process of injecting Xinlian Technology or its main business assets into the listed company, attempting to rescue itself through the “zinc steel solid waste resource utilization” track, funding hurdles remain the biggest obstacle.

As the company’s chairman Ma Liyang previously stated, “Funding is the core factor determining the scale and speed of development.” Given the company’s insufficient self-generated cash flow and the controlling shareholder’s liquidity difficulties, whether this large-scale asset injection plan can be realized remains uncertain.

Additionally, the current financial situation of the controlling shareholder, Yunnan Jiajun, is also concerning. As of January 28, 2026, Yunnan Jiajun had pledged 540 million shares, accounting for 100% of its holdings. While there is no risk of forced liquidation at present, the high pledge ratio reflects significant liquidity pressure, further fueling market doubts about its ability to fulfill performance compensation commitments.

Meanwhile, ST Jinglan also faces risks related to unfulfilled historical performance compensation from Zhongke Dingshi Environmental Engineering Co., Ltd. The original shareholders, Yin Xiaodong and others, have yet to make substantial progress in paying 16.4935 million yuan in cash compensation and returning shares.

ST Jinglan stated in the announcement that there are major uncertainties regarding whether this portion of performance compensation and shares can be recovered smoothly, which could adversely affect the company’s financial condition and shareholders’ interests.

(Source: Daily Economic News)