Core Points - *ST Gaohong's stock will be delisted due to a continuous closing price below 1 yuan for twenty trading days, effective November 3, 2025 [2] - The company is facing potential claims from investors who suffered losses due to its misconduct [3] - The company has been under investigation by the China Securities Regulatory Commission for information disclosure violations [2] Company Overview - *ST Gaohong was established on January 20, 1994, with a registered capital of 1.15786 billion yuan, and is based in Guizhou Province [4] - The company operates in smart connected ecosystems, digital transformation for government and enterprises, information security, and domestic IT products [4] - The current chairman is Fu Jinglin, and the company employs 445 people [5] Financial Performance - The company's revenue for 2022, 2023, 2024, and the first three quarters of 2025 were 6.122 billion yuan, 5.537 billion yuan, 1.464 billion yuan, and 571 million yuan, reflecting year-on-year declines of 19.78%, 13.51%, 75.31%, and 44.64% respectively [5] - The net profit attributable to shareholders for the same periods were -216 million yuan, -821 million yuan, -2.237 billion yuan, and -432 million yuan, with year-on-year changes of 45.46%, -8184.82%, -47.21%, and -586.90% respectively [5] - The company's asset-liability ratios were 51.78%, 57.84%, 82.44%, and 89.73% over the same periods [5] Risk Factors - The company has a total of 4,191 risk alerts, with 279 related to surrounding risks, 74 historical risks, and 528 warning alerts [6]

Core Viewpoint - *ST Gaohong has been implicated in a massive financial fraud spanning nine years, leading to a significant drop in stock price and potential delisting due to major violations of regulations [2][7][9]. Financial Fraud Details - The company inflated its revenue by nearly 20 billion yuan through fictitious trade activities from 2015 to 2023, with total inflated revenue amounting to 19.876 billion yuan and inflated profit totaling 76.2259 million yuan [4][6]. - Specific years of inflated revenue include: - 2015: 6.94 million yuan (9.34%) - 2016: 24.52 million yuan (28.27%) - 2017: 24.20 million yuan (26.97%) - 2018: 32.59 million yuan (35.18%) - 2019: 56.34 million yuan (49.38%) - 2020: 24.83 million yuan (35.38%) - 2021: 18.05 million yuan (21.11%) - 2022: 7.35 million yuan (10.72%) - 2023: 3.94 million yuan (6.65%) [5][6]. Regulatory Actions - The company received an administrative penalty notice from the China Securities Regulatory Commission (CSRC) for fraudulent issuance of stocks in 2020, which involved false data from 2018 to 2020 [2][6]. - Due to the ongoing investigations and findings, *ST Gaohong's stock has been marked with a "ST" label, indicating it is under special treatment due to financial irregularities [8][9]. Audit Opinions - The company has faced consecutive years of adverse audit opinions from different accounting firms, indicating significant issues with its financial reporting and internal controls [8]. - The 2023 audit report highlighted uncertainties regarding the company's ability to continue as a going concern [8]. Industry Context - Since 2025, a total of 24 companies have been delisted, with several facing similar financial misconduct issues, indicating a broader trend of regulatory scrutiny in the market [10]. - Other companies currently under investigation for major violations include *ST Suwu, *ST Zitian, and others, reflecting systemic issues within the industry [11].

Core Viewpoint - *ST Gaohong has been implicated in a massive financial fraud spanning nine years, leading to a significant drop in stock price and potential delisting due to major violations of regulations [1][5][6] Financial Misconduct - The company inflated its revenue by nearly 20 billion yuan through fictitious trade activities from 2015 to 2023, with total inflated revenue amounting to 198.76 billion yuan and inflated profit totaling 76.23 million yuan [3][4] - Specific years of inflated revenue include: - 2015: 6.94 million yuan (9.34%) - 2016: 24.52 million yuan (28.27%) - 2017: 24.20 million yuan (26.97%) - 2018: 32.59 million yuan (35.18%) - 2019: 56.34 million yuan (49.38%) - 2020: 24.83 million yuan (35.38%) - 2021: 18.05 million yuan (21.11%) - 2022: 7.35 million yuan (10.72%) - 2023: 3.94 million yuan (6.65%) [3][4] Regulatory Actions - The company received an administrative penalty notice from the China Securities Regulatory Commission (CSRC) for fraudulent issuance of stocks in 2020, which involved false data from 2018 to 2020 [4][5] - Due to continuous negative audit opinions from different accounting firms over the past two years, the company has been marked with a risk warning (ST) and is facing potential delisting [5][6] Industry Context - Since 2025, 24 companies have been delisted, with three companies facing delisting due to major violations, including *ST Gaohong [6][7] - Other companies currently under investigation for similar violations include *ST Suwu, *ST Zitian, and others, indicating a broader issue within the industry regarding financial misconduct [7]