Sanfangxiang, which surged over 61% in five consecutive daily limits over six days, issued four reminders to investors: Actual control may change, product costs rise, and last year's loss forecast

Why did AI · Sanfangxiang’s stock price surge against the trend despite losses?

Everyday Economic News Reporter: Wen Duo Edited by: Liao Dan

Since March 12, 2026, Sanfangxiang (SH600370, stock price 3.63 yuan, market value 14.145 billion yuan) has hit the daily limit for five consecutive trading days, with a total increase of 61.33% over six trading days.

Contrasting sharply with this strong stock performance, Sanfangxiang expects its net profit for 2025 to be a loss of 760 million to 840 million yuan, a significant increase in loss compared to the previous year. More severely, all shares held by the company’s controlling shareholder, Sanfangxiang Group Co., Ltd. (hereinafter referred to as Sanfangxiang Group), and its concerted action partners have been judicially frozen and pledged.

Currently, the company has issued two announcements regarding abnormal stock movements and risk warnings. In these four notices, the latest risk warning issued after market close on March 18, 2026, clearly states that if the controlling shareholder’s shares are subject to judicial disposal, it may lead to a change in the company’s actual control.

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Company warns of potential change in actual control

According to the latest stock trading risk warning announced by the company on the evening of March 18, 2026, the company warns: “In the future, if the shares held by Sanfangxiang Group and Sanfangxiang Guomao are subject to judicial disposal, it may lead to a change in the company’s actual control.”

This warning appeared in a previous announcement at the end of February.

The risk stems from the fact that the shares held by the company’s controlling shareholder, Sanfangxiang Group, and its concerted action partner, Jiangsu Sanfangxiang International Trade Co., Ltd. (hereinafter referred to as Sanfangxiang Guomao), are fully under “frozen” and “pledged” status. As early as the February 26, 2026 announcement, the company disclosed this situation. The announcement showed that Sanfangxiang Group and Sanfangxiang Guomao together hold 3.167 billion shares, accounting for 81.29% of the total share capital, all of which are judicially frozen.

The reason for the freezing is that the controlling shareholder is involved in debt and contract disputes. The announcement disclosed: “Sanfangxiang Group and Sanfangxiang Guomao provided stock pledge guarantees for their financing and trade with Jiangyin Dongwu Construction Investment Co., Ltd.”

Later, due to related debt and contract disputes, Jiangyin Jisheng Investment Development Co., Ltd. and Jiangyin Dongwu Construction Investment Co., Ltd. applied for pre-litigation property preservation with Jiangyin People’s Court, leading to the freezing of these shares. Both companies are local state-owned enterprises with government backgrounds.

Although the company stated at the time that the freezing did not significantly impact corporate governance, the abnormal stock movements have repeatedly raised concerns among investors about potential changes in actual control.

Rising product prices have reduced downstream customer purchasing intentions

While the controlling shareholder risks remain high, Sanfangxiang’s stock price has shown a puzzling independent trend.

From March 11 to March 18, 2026, the stock price increased by a total of 61.33%. Since March 12, it has hit the daily limit for five consecutive days. During this period, the turnover rate also gradually increased from 2.68% on March 12 to 10.65% on March 18.

Behind this surge is the company’s poor performance. According to Sanfangxiang’s 2025 annual performance forecast, net profit attributable to shareholders is expected to be between -760 million and -840 million yuan, an increase in loss of 55.91% to 72.32% compared to the same period last year.

In response to the abnormal stock fluctuations, Sanfangxiang issued multiple notices on March 13, 16, 17, and 18, warning investors repeatedly of risks. The company explicitly stated that its main business had not undergone significant changes, nor had its profitability or gross profit margin.

Instead, influenced by geopolitical tensions and international energy prices, recent prices of major chemical products have fluctuated significantly. Due to rising raw material costs, the company’s on-hand orders have been affected, and the rapid increase in product prices has led to a decline in downstream customer purchasing willingness.

Clearly, Sanfangxiang’s current stock price trend has severely diverged from its fundamental business conditions. The company repeatedly reminds investors to be cautious about trading risks in the secondary market, make rational decisions, and invest prudently.

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