In-Depth Analysis of the Suspension and Verification Mechanism for Abnormal Consecutive Limit-Ups of A-Share Listed Companies

Based on the collected information, I will conduct a systematic analysis for you.

From December 25, 2025 to January 7, 2026, Fenglong Co., Ltd. recorded 8 consecutive limit-up trading days. As of January 7, the closing price was reported at 42.20 yuan per share, with a cumulative interval increase of 114.43%, and the cumulative increase deviation exceeded 100%, significantly deviating from the market index and industry index [1][2]. On the evening of January 7, the company released the Announcement on Severe Abnormal Fluctuation in Stock Trading and Risk Warning, clearly warning that if the stock price rises further abnormally in the future, it may apply for suspension for verification [1][2].

The sharp rise in the company’s stock price mainly stems from its acquisition tie-up with UBTECH, the global leader in humanoid robots. On December 24, 2025, UBTECH disclosed an acquisition plan, intending to acquire 43% of Fenglong Co., Ltd.'s shares at a consideration of 1.665 billion yuan [2]. However, the company also emphasized that UBTECH has no plan to change the main business of the listed company within the next 12 months, and there is no plan to achieve backdoor listing through the listed company within the next 36 months [2].

In accordance with relevant regulations such as the Stock Listing Rules of the Shanghai and Shenzhen Stock Exchanges and the Self-Regulatory Guidelines for Listed Companies No. 6 - Suspension and Resumption of Trading, the quantitative criteria for identifying severe abnormal fluctuations are as follows [3][4]:

When severe abnormal fluctuations occur in stock trading, the regulatory mechanism operates in accordance with the following procedures [3][4][5]:

1. Information Disclosure Obligation
   : Listed companies shall disclose a verification announcement by the next trading day
2. Verification Requirements
   : If the verification announcement cannot be disclosed as scheduled, the company shall apply for stock suspension for verification
3. Investor Briefing
   : If undisclosed material matters are found during verification, an investor briefing shall be held
4. Risk Warning
   : If a reasonable explanation for the fluctuation cannot be provided, the stock exchange may issue a trading risk warning to the market and implement suspension as appropriate

The regulatory measures that stock exchanges can take against abnormal fluctuations include [3][6]:

• Mandatory Suspension for Verification
  : The suspension period is generally 1-5 trading days
• Dragon and Tiger List Disclosure
  : Disclose information on the top 5 buying and selling seats
• Trading Account Restrictions
  : Impose measures such as restricting buying/selling quotas on abnormal trading accounts
• Regulatory Inquiry
  : Send an inquiry letter to the listed company requiring an explanation for the fluctuation
• Regulatory Warning
  : Issue a regulatory warning letter to companies and responsible persons suspected of information disclosure violations

During the suspension for verification, the stocks held by investors cannot be traded, which brings significant liquidity risk [3]. Looking at recent cases:

• Guosheng Technology
  : From October 31, 2025 to January 6, 2026, the cumulative increase reached 370.20%. It was forcibly suspended for verification on January 7, 2026, with the expected suspension period not exceeding 3 trading days [6]
• Tianpu Co., Ltd.:
  From August 22 to December 30, 2025, the cumulative increase was 718.39%, and it has been suspended for verification 5 times within four months [7][8]

After resuming trading following suspension for verification, stocks often face significant price fluctuations:

Listed companies usually emphasize that ‘there has been no material change in the company’s fundamentals’ in risk warning announcements, but market speculation is often based on information such as restructuring expectations and concept hotspots [1][2][8]. This information asymmetry exposes ordinary investors to a high risk of being trapped after chasing price hikes.

Judging from recent market practices, the suspension and verification mechanism has achieved certain effects, but also has obvious limitations:

• Cooling Effect
  : Some stocks experience a short pullback or limit-up opening after suspension for verification
• Strengthened Information Disclosure
  : Prompts listed companies to disclose material matters in a timely manner, reducing information asymmetry
• Deterrent Effect
  : Deters potential speculation and improves market transparency

• Short-Lived Effects
  : Taking Tianpu Co., Ltd. as an example, despite 5 suspensions for verification within four months, the stock price still rose by more than 700% cumulatively [7][8]
• Sustained Market Frenzy
  : From late December 2025 to early January 2026, the speculation frenzy for small-cap stocks remained at a high level
• Frequent Concept Speculation
  : Concept stocks such as brain-computer interfaces and commercial spaceflight have intensively released risk warning announcements [9]

The core challenges faced by the current regulatory mechanism include:

1. Difficulty in Managing Market Expectations
   : Speculation on restructuring concepts and hot concepts often precedes information disclosure, and investor expectations cannot be fundamentally reversed through suspension for verification

2. Limited Verification Depth
   : Stock exchanges mainly verify whether listed companies have undisclosed material matters, and it is difficult to effectively intervene in speculation driven by market sentiment

3. “Hotspot Riding” Behavior
   : Some companies cater to market hotspots by establishing subsidiaries, changing business scopes, etc. For example, Tianpu Co., Ltd. was given a regulatory warning for “riding the artificial intelligence hotspot” [8]

4. Liquidity Impact
   : Frequent suspensions may lead to concentrated selling after resumption, causing an impact on market liquidity

Based on the above analysis, it is recommended to improve the regulatory mechanism from the following aspects:

1. Strengthen Pre-Event Regulation
   : Strengthen real-time monitoring of abnormal trading accounts and advance the intervention timing
2. Improve Information Disclosure
   : Require listed companies to disclose information during the restructuring planning stage to reduce information asymmetry
3. Differentiated Regulation
   : For stocks with repeated abnormal fluctuations, consider extending the suspension period or adopting stricter restrictive measures
4. Investor Education
   : Strengthen risk warnings, guide investors to invest rationally, and avoid chasing price hikes and selling on dips

1. The

   suspension and verification mechanism
   is an important institutional tool for curbing abnormal fluctuations in the A-Share Market, but the current mechanism has limited effectiveness in responding to concept speculation

2. The

   Fenglong Co., Ltd. case
   reflects excessive market speculation on restructuring expectations; even though the company explicitly denied restructuring plans, capital continued to flow in

3. Investor risks
   are mainly reflected in three aspects: capital lock-up, post-resumption fluctuations, and information asymmetry

4. Regulatory effectiveness
   needs to be comprehensively improved from multiple dimensions such as institutional improvement and standardization of the behavior of market participants

For investors, when facing stocks with consecutive limit-ups like Fenglong Co., Ltd., they should:

• Prudently evaluate the matching degree between the company’s fundamentals and stock price
• Pay attention to the content of the company’s risk warning announcements
• Avoid blindly chasing price hikes and control position risks
• Fully understand the impact of the suspension and verification mechanism on liquidity

[1] 9-Consecutive-Limit-Up Fenglong Co., Ltd.: May Apply for Suspension for Verification if Stock Price Rises Further Abnormally

[2] Announcement of 9-Consecutive-Limit-Up Top-Performing Stock: Severe Abnormal Fluctuation in Stock Trading, May Apply for Suspension

[3] Popular Science: Abnormal Fluctuation Regulation and Risk Warning are Two Different Mechanisms in Securities Market Regulation

[4] Beijing Stock Exchange Solicits Public Opinions on Revising the Stock Listing Rules of the Beijing Stock Exchange

[5] Progress Announcement of Shengtong Energy Co., Ltd. on Planning Control Right Change

[6] Stock Price Tripled in Two Months, Deviating from Fundamentals; Cross-Border Guosheng Technology Suspended from Today

[7] Second Top-Performing A-Share Stock Issued a Regulatory Letter; Suspended for Verification 5 Times in 4 Months

[8] 16x Top-Performing Tianpu Co., Ltd. Given Regulatory Warning: Established Subsidiary to Speculate on “Artificial Intelligence”

[9] Xinhua Finance Morning Post: January 7

[10] A-Share Emergency! Late Night, Announcements from Multiple Top-Performing Stocks!