*ST Wanfang Touches Market Cap Delisting Red Line for the First Time, Disclosure Violation Investigation Still Underway

AI Disclosure Violations Investigation: How Will It Affect the Delisting Timeline?

On the evening of March 16, *ST Wanfang (000638.SZ) issued its first risk warning notice regarding the possible delisting of the company’s stock due to market value termination. The announcement showed that the company’s closing stock price that day was 1.56 yuan per share, with a total market value of only 486 million yuan, first reaching the delisting red line of a market value below 5 billion yuan. Coupled with previously existing financial risks and investigation risks related to violations, the company is facing multiple overlapping delisting risks, officially sounding the alarm.

Public information shows that *ST Wanfang is fully named Wanfang Urban Investment Development Co., Ltd., established on November 20, 1996. Its headquarters is located in Jiangyuan District, Baishan City, Jilin Province, with a registered capital of 311 million yuan. It was listed on the Shenzhen Stock Exchange on November 26, 1996.

After multiple business adjustments and name changes, the company’s current main businesses focus on agriculture and military industries, while also engaging in astaxanthin industry. In agriculture, it mainly handles corn and rice procurement, processing, and sales. In the military sector, it provides precision-machined components for aerospace and other industries. The company has established cooperative relationships with enterprises such as Liaoliang Group and China Aerospace Science and Technology Corporation.

On April 30, 2025, the company was issued a delisting risk warning due to failing to meet financial indicators. Its stock abbreviation was changed from “Wanfang Development” to “*ST Wanfang,” and the daily price fluctuation limit was adjusted to 5%.

The core reason for the ST designation is that in 2024, the company’s operating revenue after deducting non-recurring items was only 228 million yuan, below the Shenzhen Stock Exchange’s threshold of 300 million yuan. Its net profit after deducting non-recurring items was a loss of 4.6013 million yuan, and for two consecutive years (2023-2024), the company reported losses in net profit after deducting non-recurring items, with ongoing deterioration in main business profitability. Additionally, the performance forecast released in January 2025 and the revised results in April showed a significant discrepancy: the former projected a net profit of 20-25 million yuan, while the latter revised it to a net loss of 4-6 million yuan after deducting non-recurring items, without timely warning of delisting risk. This “performance reversal” behavior was publicly condemned by the Shenzhen Stock Exchange and triggered an investigation by the China Securities Regulatory Commission.

The worsening financial condition is the core issue leading *ST Wanfang into delisting danger. According to disclosed financial data, in 2024, the company achieved operating revenue of 391 million yuan and a net profit attributable to shareholders of 10.65 million yuan, but the net profit after deducting non-recurring items was -4.6013 million yuan.

Entering 2025, the company’s operations further declined. In the first three quarters, total assets shrank from 302 million yuan at the beginning of the year to 266 million yuan. The net loss attributable to shareholders was 8.5933 million yuan, with basic earnings per share of -0.0276 yuan. Operating cash flow remained negative, highlighting cash pressure. More severely, the company expects its 2025 revenue to be only 200-250 million yuan, with after-deduction revenue of 150-200 million yuan, and all key profitability indicators—total profit, net profit attributable to shareholders, and net profit after deducting non-recurring items—are expected to be negative, reaching delisting conditions due to financial risks.

Meanwhile, the 2024 audit report was issued with a qualified opinion, citing uncertainties regarding the recoverability of other equity investments in Jilin Wanfang BaiAo Biotechnology Co., Ltd., which remain unresolved. If the 2025 audit report also contains a qualified opinion, it will further trigger delisting conditions.

In addition to financial risks, investigation risks also threaten *ST Wanfang. On July 25, 2025, the company received a notice of investigation from the China Securities Regulatory Commission for suspected violations of information disclosure laws. The investigation is ongoing, and no conclusive opinion or decision has been issued yet. If subsequent administrative penalties are imposed and the facts found involve major violations, the stock could be forcibly delisted for major illegalities, further increasing delisting risks.

Furthermore, in January 2026, the company received a “Tax Matters Notice” from tax authorities, requiring it to pay overdue taxes and penalties of 30.45 million yuan, adding further financial pressure and operational difficulties.

According to the Shenzhen Stock Exchange Stock Listing Rules, if a company’s stock market value remains below 5 billion yuan for 20 consecutive trading days, it will be delisted, and such delisting does not enter a delisting restructuring period. If the market value remains below 5 billion yuan for 10 consecutive trading days, the company must disclose risk warning notices daily until the situation is resolved or triggers delisting. Based on recent stock price trends, *ST Wanfang’s share price has been declining steadily over the past two months, accelerating since March, and on March 16, it hit the market value red line. If the stock price cannot recover, it will gradually approach the delisting threshold.

So far, *ST Wanfang has not disclosed specific measures to address multiple delisting risks. The absence of a controlling shareholder or actual controller further complicates risk mitigation efforts.