Core Viewpoint - The stock price of Xuesong Development Co., Ltd. (ST Xuefa) has surged, with a 25% increase over six trading days, despite the company facing serious legal issues involving its actual controller Zhang Jin and its parent company Xuesong Holdings Group [3][42][44]. Group 1: Stock Performance - On February 11, ST Xuefa opened with a limit-up and recorded four limit-up days within six trading days [1][3]. - The stock reached a market capitalization of 2.747 billion CNY, with a closing price of 5.05 CNY on February 11, reflecting a 4.99% increase from the previous day [2][3][42]. Group 2: Legal Issues - On February 10, Xuesong Development announced that the Guangzhou Intermediate People's Court had publicly pronounced a verdict against Xuesong Holdings and Zhang Jin for fundraising fraud and illegal public deposit absorption [5][44]. - The company stated that it had not yet received the relevant judgment document and emphasized that Zhang Jin, while being the actual controller, does not hold any position within the company [8][47]. Group 3: Shareholding and Control - As of February 10, 2026, Zhang Jin indirectly holds approximately 377.5 million shares, accounting for 69.40% of the total shares, with about 372.7 million shares under pledge and judicial freeze [9][48]. - Over two years, more than 68.50% of the company's shares have been under judicial freeze, raising concerns about the future control of the company [9][51]. Group 4: Financial Performance - Xuesong Development projected a net loss of 173.8 million to 245.3 million CNY for 2025, indicating a worsening financial situation compared to a loss of 157 million CNY in 2024, with an increase of 14.59% to 61.74% [14][52]. - The company has shifted its main business focus from apparel to supply chain management, with supply chain revenue contributing over 90% since 2022, while apparel revenue has drastically declined [17][55].

Core Viewpoint - The trial of Xuesong Holdings and its founder Zhang Jin, along with 19 other defendants, is set to take place, with serious allegations of financial misconduct including fraud and illegal fundraising [1][22]. Group 1: Legal Proceedings - The "Xuesong case" involves 19 individuals and one corporate entity, with charges ranging from fundraising fraud to illegal public deposit acceptance [4][26]. - The prosecution claims that Xuesong Holdings caused losses of approximately 20 billion yuan, affecting around 8,000 investors [6][26]. - The trial is scheduled for October 28 to November 1, 2024, with indications that the repayment rate for Xuesong's products may be as low as 3% [16][38]. Group 2: Company Background - Xuesong Holdings was formerly known as Junhua Group, founded by Zhang Bingsheng, and transitioned into its current form in 2015 under the leadership of his son, Zhang Jin [7][27]. - The company experienced rapid revenue growth from 2015 to 2020, with revenues increasing from 59.3 billion yuan in 2015 to 233.4 billion yuan in 2020 [9][29]. - In July 2018, Xuesong Holdings entered the Fortune Global 500 with revenues of 32.7 billion USD [10][30]. Group 3: Financial Misconduct - Xuesong Holdings has been accused of issuing fraudulent financial products and misusing funds, leading to significant financial distress [19][42]. - The company faced allegations of issuing 220 billion yuan in false fundraising through its trust subsidiary shortly after its acquisition [11][32]. - By early 2021, several financial products issued by Xuesong began to default, leading to a public apology from Zhang Jin regarding the inability to fulfill repayment obligations [14][36].