Investment Risk Assessment Report on ST Stocks Under the New A-Share Financial Delisting Rules

I will now provide you with a systematic and comprehensive analysis report.

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In April 2025, the Shanghai Stock Exchange officially released the “Stock Listing Rules (Revised in April 2025)”, marking the entry of the A-Share delisting system into the stage of comprehensive and strict implementation [1]. This institutional reform’s core goal is to promote the improvement of the quality of listed companies, effectively protect the legitimate rights and interests of small and medium-sized investors, and realize the survival of the fittest function of the capital market.

According to the policy orientation of the regulatory authorities, the delisting system reform presents the following characteristics:

- the financial delisting indicators are quantified, clear and enforceable; - the termination of listing procedure will be initiated if the delisting circumstances are triggered for two consecutive years; - covering four categories: financial, trading, major illegal, and voluntary delisting [2].

According to Article 9.3.1 of the “Shanghai Stock Exchange Stock Listing Rules”, if a listed company falls into any of the following circumstances, the Exchange will impose a delisting risk warning on its shares [1]:

Type of Delisting Circumstance	Specific Indicator
Combination of Operating Income and Profit	The lower of the audited total profit, net profit, or non-recurring net profit in the most recent fiscal year is negative, and operating income is less than 300 million yuan
Negative Net Assets	The audited end-of-period net assets in the most recent fiscal year are negative
Negative Audit Opinion	The financial accounting report for the most recent fiscal year is issued with an audit opinion of disclaimer of opinion or adverse opinion
Retroactive Application for Major Violations	Triggering any of the above circumstances after retrospective restatement due to illegal or irregular information disclosure

First, regarding the identification of “operating income”, the rules clearly require

. This means that it has become significantly more difficult for some listed companies to “pad operating income” through related party transactions, temporary income, and other methods [1].

Second, regarding the delisting trigger mechanism, if the above financial indicator circumstances are triggered for

, the Exchange will decide to terminate the listing of its shares. This means that the delisting risk warning (*ST) is not the end, but an “early warning signal” for delisting [1].

Third, regarding the “one-vote veto” mechanism for audit opinions, even if the financial indicators temporarily meet the standards, if the financial accounting report is issued with a qualified opinion, disclaimer of opinion, or adverse opinion, mandatory delisting will still be triggered [3].

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*ST Yanshi (Shanghai Guijiu Co., Ltd., Stock Code: 600696) is mainly engaged in the production and sales of baijiu, and is a typical “cross-border transformation” enterprise in the A-Share market. The company has changed its main business many times, known as the “King of Name Changes in A-Shares” by the outside world, and has successively involved in fields such as internet finance and real estate development. After 2018, it entered the sauce-flavor baijiu track through mergers and acquisitions [4].

, the company’s controlling shareholder is Shanghai Guijiu Enterprise Development Co., Ltd., and its concerted actors hold a total of 216,740,245 shares of the company, accounting for 64.80% of the total share capital, but [5].

According to the performance pre-loss announcement released by the company on January 12, 2025, after preliminary calculation by the finance department [3]:

“It is expected that the company’s operating income in 2025 will be less than 300 million yuan, and the lower of the total profit, net profit, or net profit after deducting non-recurring gains and losses will be negative. In accordance with the relevant provisions of the “Shanghai Stock Exchange Stock Listing Rules”, the company’s shares will be delisted due to triggering financial delisting circumstances.”

This announcement marks that *ST Yanshi has definitely triggered the delisting conditions and is about to face the final fate of

.

Judging from the obtained company financial data, the operating difficulties of *ST Yanshi have not happened overnight [6]:

Financial Indicator	Value	Risk Signal
Current Ratio	0.42	Significantly lower than 1, extremely weak solvency
Quick Ratio	0.08	Extremely lack of quick assets
ROE (Return on Equity)	-72.58%	Severe erosion of shareholder equity
Net Profit Margin	-293.92%	Sustained losses in core business
Operating Profit Margin	-161.98%	Low operating efficiency

, the company’s stock shows obvious characteristics of value destruction [6]:

Period	Decline
Past 1 Year	-69.90%
Past 3 Years	-87.13%
Past 5 Years	-76.10%

*ST Yanshi is facing not only financial delisting risk, but an extreme dilemma of

[5]:

In 2024, the company’s audited net profit was negative and operating income was less than 300 million yuan, and a delisting risk warning has been imposed since April 23, 2025. If the financial indicators trigger the delisting standards again in 2025, the listing will be directly terminated.

The 2024 financial report was issued with a

by Zhongxingcai Guanghua Certified Public Accountants. The matters involved in the qualified opinion have not been effectively resolved, and there is significant uncertainty as to whether they can be resolved in the future [3].

Mr. Han Xiao, the actual controller of the company, has been taken criminal compulsory measures by the public security organs due to the suspected illegal fund-raising crime of Haiyin Wealth Management Co., Ltd. [5]. This incident has caused multiple negative impacts on the company’s operations:

• Dealer relationships have been severely damaged, and the willingness to stock up and replenish goods has dropped significantly
• The capital chain remains tight, and rebates and goods returns cannot be fulfilled
• Market investment has been significantly reduced, and brand influence has shrunk sharply

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Based on the current delisting system, the risks faced by ST stocks can be divided into four levels:

Risk Level	Type	Trigger Condition	Irreversibility
Extremely High	Financial Termination of Listing	Operating income <300 million yuan + negative profit for two consecutive years	Irreversible
Extremely High	Trading Delisting	Closing price <1 yuan for 20 consecutive days or market value <300 million yuan	Irreversible
Extremely High	Major Illegal Delisting	Major illegal acts such as financial fraud	Irreversible
High	Delisting Risk Warning	Triggering financial indicators in a single year (*ST)	Reversible (in theory)
Medium-High	Other Risk Warning	Issues such as corporate governance, internal control (ST)	Reversible

Since 2024, the trend of normalized delisting in A-Shares has been obvious. *ST Meixun became the first delisted stock in 2025, and dozens of listed companies have successively issued delisting warnings [2].

, and the determination of the regulators to “delist all that should be delisted” is clearly visible.

After a delisting risk warning is imposed, the stock will be traded on the risk warning board, with a

. Trading permissions are restricted during the delisting consolidation period, liquidity shrinks significantly, and investors may face the extreme dilemma of .

Taking *ST Yanshi as an example, from December 2024 to January 2025, the stock price fell from USD 15.65 to USD 10.49,

[6].

Most ST companies are trapped in a vicious cycle of “loss - *ST - further loss - delisting”. Taking *ST Yanshi as an example, the company expects a net profit loss attributable to parent company shareholders of 50 million to 75 million yuan in the first half of 2025, and a non-recurring net profit loss of 30 million to 45 million yuan. The magnitude of loss reduction is limited, and the profitability of the core business is difficult to recover [7].

The *ST Yanshi case reveals an important risk:

. When a company’s actual controller encounters major legal problems, it is often accompanied by chain reactions such as share freezes, operating deterioration, and core executive departures, forming a dilemma of “it never rains but it pours” [4][5].

The dilemma of *ST Yanshi is closely related to the overall adjustment of the baijiu industry. In the first half of 2025, the recovery of the baijiu industry fell short of expectations, with slow terminal sales and inverted product prices becoming common phenomena. The trend of industrial concentration in advantageous production areas, advantageous enterprises, and advantageous brands is obvious, and

[7].

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*ST Yanshi’s transformation from internet finance to sauce-flavor baijiu seems to be chasing market hotspots, but in fact, it lacks deep industrial foundation and brand accumulation. The 6-year trademark dispute with Guizhou Guijiu finally ended with

, revealing the huge risk of “hotspot-chasing transformation” [4].

: When carrying out strategic transformation, enterprises must fully assess:

• Synergy with existing resources
• Industry barriers and competitive landscape
• Time cost required for brand building and market recognition
• Regulatory policies and legal compliance risks

The collapse of *ST Yanshi directly originated from the

of related parties. Haiyin Wealth was placed on file for investigation on suspicion of illegal fund-raising, and the actual controller was taken compulsory measures. This event quickly spread to the listed company through the equity link, leading to the collapse of dealer confidence and capital chain rupture [5].

: When evaluating ST companies, investors must conduct in-depth analysis of:

• Financial status and legal risks of controlling shareholders and actual controllers
• Dependence on related party businesses
• Risk exposure of related party transactions
• Share pledge and judicial freeze status

The financial deterioration of *ST Yanshi is not without traces. The 2024 annual report has shown:

• Significant decline in operating income
• Net profit turned from profit to loss
• Continuous deterioration of current ratio and quick ratio
• Inventory turnover days rose sharply (from 479.87 days in 2023 to 1669.76 days in 2024, and then to 6617.65 days in the first half of 2025) [4][7]

: Investors should establish a financial warning indicator system, focusing on:

• Continuous downward trend of operating income
• Sustained negative non-recurring net profit
• Sharp decline in inventory turnover efficiency
• Sustained net cash outflow
• Changes in audit opinions

For a long time, there has been a speculative culture of “speculating on ST stocks” in the A-Share market, where some investors gamble on company restructuring, shell preservation, or performance reversal. However, the *ST Yanshi case shows that

[2][3].

:

• The number of delisted companies in 2024 hit a record high
• In the distribution of delisting types, trading delisting accounts for nearly 40%
• The enforcement of financial delisting has been significantly strengthened

Behavioral Recommendations	Specific Explanations
Stay Away from High-Risk Targets	Strictly avoid ST/*ST companies with continuous losses, insufficient operating income, and non-standard audit opinions
Establish a Risk List	Conduct delisting risk screening on held stocks, focusing on financial indicators and audit opinions
Strengthen Fundamental Research	Conduct in-depth analysis of the company’s business model, financial health, and governance structure to avoid “news-driven” speculation

The *ST Yanshi case also exposes several concerns in the implementation of the delisting system:

First,

- The company disclosed the delisting risk in the performance forecast, but the stock price fluctuated abnormally in the early stage, so it is worth examining whether the information is sufficient and timely.

Second,

- During the delisting process, whether the channels for investor rights relief are smooth and whether the loss compensation mechanism is sound need further optimization.

Third,

- Guide investors to correctly understand the investment risks of ST stocks and reverse the irrational investment culture of “speculating on small and poor-performing stocks”.

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Based on the analysis of the *ST Yanshi case, it is recommended that investors use the following risk assessment framework:

Delisting Risk Score = Financial Indicators Weight (40%) + Audit Opinion Weight (25%) + 
                      Corporate Governance Weight (20%) + Industry Prospect Weight (15%)

:

• 0-30 Points
  : Low risk, can be concerned
• 31-50 Points
  : Medium risk, participate cautiously
• 51-70 Points
  : High risk, recommended to avoid
• 71-100 Points
  : Extremely high risk, strongly recommended to liquidate positions

Indicator Category	Specific Indicator	Warning Threshold
Operating Income Indicator	Operating Income	Warning if <500 million yuan for 2 consecutive years
Profitability Indicator	Non-recurring Net Profit	Warning if negative for 2 consecutive years
Asset Indicator	Net Assets	Warning if <200 million yuan
Liquidity	Current Ratio	Warning if <1.0
Audit	Audit Opinion	Warning for non-standard opinions
Equity	Proportion of Judicial Freeze	Warning if >30%

• Include companies that trigger or are close to the delisting red line in the investment blacklist
• Regularly scan the financial data and announcements of held stocks
• Set stop-loss disciplines to avoid deep traps

• Pay attention to risk warnings in performance forecasts and periodic reports
• Track audit reports and special opinions issued by audit institutions
• Monitor major events such as the company’s judicial lawsuits, equity freezes, and executive changes

• Immediately evaluate whether to continue holding once the company is designated as *ST
• Be sure to complete liquidation or share conversion before the delisting consolidation period
• Keep relevant evidence to prepare for possible rights protection lawsuits

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First,

. The 2025 new rules of the Shanghai Stock Exchange further strengthen the enforcement rigidity of financial delisting, and the combined indicator of operating income below 300 million yuan and negative net profit will become a “death knell” for many ST companies.

Second, *the ST Yanshi case has typical warning significance. From the failure of cross-border transformation, the transmission of related party risks, to the continuous deterioration of financial data, it shows the complete path of distressed enterprises moving towards delisting, providing investors with a vivid negative example.

Third,

. The speculative model of “speculating on ST stocks, gambling on restructuring” is no longer applicable against the background of normalized delisting, and investors must establish a new risk awareness and investment framework.

Fourth,

. Financial delisting, trading delisting, and major illegal delisting may be triggered at the same time, forming a “delisting combination punch”, which greatly compresses the escape time window for investors.

It can be predicted that with the in-depth advancement of the full registration system and the implementation of supporting rules of the new “Company Law”, the survival of the fittest function of the A-Share market will be further strengthened.

.

For investors, this is both a challenge and an opportunity:

• The challenge is: must abandon speculative thinking and establish professional research capabilities
• The opportunity is: high-quality companies will receive more resource inclination, and the investment environment will be healthier

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[1] Shanghai Stock Exchange. “Shanghai Stock Exchange Stock Listing Rules (Revised in April 2025)”. http://www.sse.com.cn/lawandrules/sselawsrules2025/bond/convertible/listing/c/c_20250609_10781292.shtml

[2] Yicai. “*ST Meixun Becomes the First Delisted Stock This Year, Dozens of Listed Companies Sound Delisting Warnings”. https://www.yicai.com/news/102468836.html

[3] Securities Times. “*ST Yanshi: The Company’s Stocks May Be Delisted Due to 2025 Performance Pre-loss”. https://www.stcn.com/article/detail/3587977.html

[4] Sina Finance. “The 16-Year “Guijiu” Battle Finally Ends! Shanghai Guijiu Can No Longer Be Called “Guijiu”, and Inventories Still Pile Up to 486 Million Yuan”. https://finance.sina.com.cn/wm/2025-10-10/doc-inftmnmi5874268.shtml

[5] Sohu Finance. “Breaking News! 600696 May Trigger Delisting, and the Stock Price Just Rose by the Daily Limit for 3 Consecutive Days”. https://m.sohu.com/a/975302257_115433

[6] Jinling AI. “Company Profile and Stock Price Data of *ST Yanshi (600696.SS)”. Based on broker API data

[7] Eastmoney. “ST Yanshi: 2025 Semi-Annual Performance Pre-loss Announcement”. http://vip.stock.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?stockid=600696&id=11237493

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: January 12, 2026

: Jinling AI Financial Analysis System