In-depth Impact Analysis of Ganfeng Lithium's Insider Trading Case

According to public information and brokerage API data, the details of Ganfeng Lithium’s suspected insider trading case are as follows [1][2][3]:

• Case Nature:
  Suspected unit crime of insider trading
• Insider Information:
  Between June and July 2020, Ganfeng Lithium and *ST Jiangte (now Jiangte Motor) engaged in contact regarding merger and acquisition matters; this undisclosed information constitutes insider information
• Illegal Behavior:
  Purchased a total of 16.7777 million shares of *ST Jiangte stock during the sensitive period, with a transaction amount of 24.8888 million yuan, then sold all to profit 1.1033 million yuan
• Decision Chain:
  Decided by then Chairman Li Liangbin, led by Secretary to the Board Ouyang Ming, and operated by the Securities Department
• Transaction Characteristics:
  Transaction timing is highly correlated with the progress of insider information

• For Ganfeng Lithium: Confiscate illegal gains of 1.1033 million yuan and impose a fine of 3.3159 million yuan
• For Li Liangbin: Warn and impose a fine of 600,000 yuan
• For Ouyang Ming: Warn and impose a fine of 200,000 yuan
• The company has paid the fines and confiscations as required and completed rectification

• Yichun Municipal Public Security Bureau transferred the case to the procuratorate for review and prosecution
• Marks the case moving from the administrative investigation stage to the criminal judicial process
• Legal consequences further escalated

According to criminal law provisions and relevant judicial interpretations [4][5]:

• Profit or loss avoidance of over 500,000 yuan (Ganfeng Lithium profited 1.1033 million yuan)
• Securities transaction volume over 2 million yuan (Ganfeng Lithium’s transaction volume was 24.8888 million yuan)

• Unit Crime:
  Impose a fine on the unit (usually 1-5 times the illegal gains, i.e., 1.1033 million to 5.5165 million yuan)
• Direct Responsible Persons:
  • Serious circumstances: Imprisonment of less than 5 years or criminal detention
  • Especially serious circumstances: Imprisonment of 5-10 years
  • Both are subject to fines

• Voluntarily paid administrative fines and confiscations
• The company stated active cooperation with the investigation
• No prior criminal record

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According to company announcements and brokerage API data,

[0][1][2]:

• The company’s announcement clearly states that “all production and operation activities remain normal and orderly”
• The case is a “specific historical event disclosed earlier” that occurred in 2020
• Current business activities have not been substantially affected

According to online search information [3], Ganfeng Lithium’s ongoing global lithium resource projects include:

• Argentina Mariana Lithium Salt Lake Project
• Argentina Cauchari-Olaroz Lithium Salt Lake Project
• Mali Goulamina Lithium Pyroxene Project

The progress of these projects is mainly driven by the company’s overall strategy and industry cycle;

.

• Its subsidiary Ganfeng Lithium Battery once had a spin-off listing plan
• According to the CSRC’s “Trial Rules for Spin-off of Listed Companies”, if a listed company or its controlling shareholder/actual controller has received administrative penalties within the past 36 months,
  it is not allowed to spin off for listing
  [3]
• Impact Period:
  From the July 2024 administrative penalty, at least until July 2027

• According to the “Administrative Measures for Registration of Securities Issuance by Listed Companies”, if the company is found to constitute a unit crime, its refinancing capacity may be affected
• However, if it is only subject to a fine and does not involve business suspension or rectification, the actual impact is relatively controllable

• The company needs to continuously disclose case progress, increasing information disclosure costs
• Compliance review efforts may increase, affecting decision-making efficiency

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According to brokerage API data, Ganfeng Lithium’s current financial status faces

[0]:

Financial Indicator	Value	Risk Assessment
Current Ratio	0.73	Serious below 1 , high short-term liquidity pressure
Quick Ratio	0.46	Extremely low, serious lack of short-term debt repayment capacity
Net Profit Margin (TTM)	-7.18%	Serious loss
ROE	-3.41%	Negative shareholder return
Debt Risk Level	high_risk	Classified as high risk in financial analysis

• Operating Revenue: 14.625 billion yuan, up 5.02% year-on-year
• Net Profit Attributable to Parent Company: Only 25.52 million yuan,
  profit margin of only 0.17%
• Non-GAAP Net Profit: Loss of 942 million yuan
  (down 163.43% year-on-year) [1][2][3]

• A-share (002460.SZ): Fell 4.74% on December 29, with trading volume surging to 68.48 million shares [0]
• Hong Kong stock (1772.HK): Fell 2.23% on the same day [0]
• Single-day trading volume on December 29 surged to 69 million shares, an increase of 19% compared to the monthly average of 58 million shares
  [0]

According to brokerage API’s DCF analysis [0]:

Scenario	Intrinsic Value	vs Current Price $65.32
Conservative	$147.44	+125.7%
Neutral	$203.28	+211.2%
Optimistic	$312.14	+377.9%

• Theoretical Valuation
  is based on rising lithium prices and industry prospects, considering the company seriously undervalued
• Current Price
  reflects market discounts for the following risks:

1. Uncertainty of Legal Risk
   (potential fines, criminal liability)
2. Serious Deterioration of Profitability
   (non-GAAP net loss of 942 million yuan)
3. Liquidity Crisis
   (current ratio of 0.73)
4. Governance Structure Concerns
   (executives suspected of crimes)

• Based on 5-year historical average data, not fully considering:
  • Cash flow impact of sudden legal risks
  • Sustained loss of non-GAAP net profit
  • Potential impact of liquidity crisis on operations
• Industry growth assumption (36%) may be overly optimistic
  , needing adjustment based on the company’s actual situation

• Scenario analysis should add legal risk premium
  to increase discount rate
• Cash flow forecast should consider potential fine expenses
  (estimated 1.1033 million to 5.5165 million yuan)
• Sensitivity analysis needs to include the impact of spin-off listing hindrance on valuation

---

According to online search information, the lithium industry is experiencing

[6][7]:

• Lithium carbonate price fluctuated downward from 75,200 yuan/ton at the beginning of 2025 to a low of 59,900 yuan/ton in June
• Rose rapidly in the second half of the year, reporting 104,900 yuan/ton on December 25 (
  annual increase of 39.5%
  )
• Futures price has approached 115,000 yuan/ton [7]

• Supply surplus pressure eased in 2025
• Explosive growth of energy storage market
  : China’s energy storage lithium battery shipments reached 165 GWh in Q3 2025, up 65% year-on-year
• Full-year energy storage shipments are expected to reach 580 GWh in 2025, with growth rate exceeding 75%
• JPMorgan predicts global energy storage battery shipments will grow 30% to 770 GWh in 2026 [7]

According to online search and brokerage API data [0][3]:

• World’s largest metal lithium producer
• China’s largest lithium hydroxide producer
• Leading enterprise’s energy storage cell capacity is in
  full production status

• Increased Competition
  : The industry shifts from “volume competition” to “resource competition, technology competition, product competition”
• Price Volatility
  : Although prices are rising, the characteristic of “wide fluctuation” is obvious
• Technology Iteration
  : New technologies like solid-state batteries may change demand structure

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Impact Dimension	Short-term Impact (<6 months)	Medium-term Impact (6-24 months)	Long-term Impact (>24 months)
Stock Price Performance	⚠️ Negative (4.74% drop already reflected)	➡️ Volatile consolidation	↕️ Return to fundamentals
Legal Risk	⚠️ High uncertainty (review and prosecution stage)	⚠️ Fine payment + executive liability	✅ Event ends, impact dissipates
Core Business	✅ Normal operation	✅ Sustained development	✅ Driven by industry cycle
Capital Operation	❌ Spin-off listing hindered until 2027	❌ Refinancing may be limited	➡️ Gradual recovery
Corporate Governance	⚠️ Reputation damage	✅ Deepened rectification	✅ Improved governance
Financial Status	⚠️ High liquidity pressure	⚠️ Profitability to be restored	➡️ Depends on industry recovery

• Assumption
  : Only fine penalty (1.1033 million to 5.5165 million yuan), executives exempt from criminal punishment
• Impact
  :
  • Fine has minimal impact on cash flow (accounting for 0.004%-0.04% of Q3 2024 operating revenue of 14.625 billion yuan)
  • Corporate governance improved, investor confidence restored
  • Spin-off listing hindered, but rising lithium prices drive performance improvement
• Stock Price Expectation
  : May recover to the $90-100 range within the year

• Assumption
  : Unit fine + executive probation (e.g., 3 years probation with 5-year term)
• Impact
  :
  • Fine controllable, executives restricted but not affecting operations
  • Spin-off listing confirmed to be hindered, financing cost slightly increased
  • Industry prosperity supports core business
• Stock Price Expectation
  : Maintain range-bound volatility of $60-80

• Assumption
  : Executives sentenced to actual imprisonment + huge fines + regulatory escalation
• Impact
  :
  • Management turmoil affects strategic execution
  • Increased regulatory attention, refinancing hindered
  • Reputation damage leads to tense customer/supplier relationships
• Stock Price Expectation
  : May fall below $50

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• This is
  legal continuation of a specific historical event
  , not a newly occurred illegal act
• The case happened in 2020, and the company has completed rectification
• Core lithium resource business has no direct connection to the case

1. Legal Risk Controllable
   : Fine has minimal impact on cash flow (<0.04% of revenue)
2. Capital Operation Limited
   : Spin-off listing hindered until 2027, but not core business
3. Core Business Unaffected
   : Global lithium resource projects and capacity progress driven by industry cycle
4. Stock Price Short-term Pressure
   : 4.74% drop reflects market sentiment, but medium and long term still dominated by fundamentals

• ⚠️
  Cautious Wait-and-See
  : Stock price volatility increases during case trial
• Event-driven investors can wait for the case to be finalized

• ✅
  Focus on Value Regression Opportunities
  :
  • Current price $65.32 vs DCF neutral valuation $203.28, with huge safety margin
  • Lithium price enters upward cycle, energy storage demand explodes, industry prosperity continues to rise
  • Company’s global lithium resource leader position remains unchanged
• ⚠️
  Key Risk Point Monitoring
  :
  • Liquidity Crisis
    : Current ratio of 0.73, may be forced to refinance and dilute if not improved
  • Profitability
    : Non-GAAP net loss of 942 million yuan needs fundamental improvement
  • Executive Risk
    : Actual imprisonment may affect management continuity

1. Unexpected Legal Judgment
   : Executives sentenced to actual imprisonment + fines exceeding expectations
2. Liquidity Crisis
   : May be forced to refinance at low prices if not improved
3. Lithium Price Volatility
   : Sharp price decline affects profitability
4. Increased Industry Competition
   : Technology iteration may impact market position

• Case progress (review and prosecution → court judgment → execution)
• Liquidity indicators (current ratio, quick ratio)
• Non-GAAP net profit improvement trend
• Lithium price trend and company production scheduling situation

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[0] Jinling API Data (Brokerage Data, Financial Analysis, Valuation Model)

[1] Caizhongshe - “Ganfeng Lithium’s Case of Suspected Unit Crime of Insider Trading Transferred to Procuratorate for Review and Prosecution”
https://m.caizhongshe.cn/news-7411389185464661391.html

[2] Sina Finance - “V View Financial Report | Ganfeng Lithium Receives Transfer Prosecution Notice: Suspected Unit Crime of Insider Trading”
https://finance.sina.com.cn/roll/2025-12-29/doc-inhenrqi0051238.shtml

[3] China Fund News - “Ganfeng Lithium Suspected of Unit Crime of Insider Trading, Case Transferred to Procuratorate for Review and Prosecution”
https://www.chnfund.com/article/ARcc9d6f9f-d3fe-c4ea-5c9c-3a1e7c8f58e8

[4] Sina Finance - “Ganfeng Lithium Suspected of Insider Trading Crime Transferred to Review and Prosecution”
https://finance.sina.com.cn/roll/2025-12-29/doc-inhenrqk4712284.shtml

[5] Beijing Criminal Defense Lawyer Network - “Crime of Insider Trading and Disclosure of Insider Information”
https://wwgglawyer.com/224.html

[6] Securities Daily - “2025 Lithium Carbonate Price Fluctuates Widely, Industry Development Expected to Be More Stable Next Year”
https://finance.eastmoney.com/a/202512253602093413.html

[7] Fortune Account - “Cycle ‘Breakthrough’, Lithium Carbonate Price Exceeds 110,000 Yuan”
https://caifuhao.eastmoney.com/news/20251223085129391297960

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This report is based on public information and professional data analysis, for investment reference only, not constituting investment advice. The case is still in the judicial process, and the final judgment result may differ from the prediction. Investors should continue to pay attention to the case progress and company announcements.