Hot narrative heats up, companies need to better adhere to disclosure boundaries

■ Liu Zhao

Recently, the China Securities Regulatory Commission announced an investigation into a listed company in Guangdong. The reason is that the company engaged in human-driven self-questioning and answering on online interactive platforms related to its business, and its information disclosures constituted misleading statements.

According to the review, this is the fourth listed company this year to be investigated for suspected misleading disclosures. In the context of increasingly diverse and faster information dissemination channels in the capital market, how listed companies manage their external communication boundaries has become an important issue in corporate governance.

Misleading statements often do not stem from deliberate falsehoods but more frequently from imprecise expression. The recent surge in misleading disclosures in the capital market is not coincidental. On one hand, the pace of industry theme shifts has accelerated, with concepts like brain-computer interfaces, artificial intelligence, computing power, and new energy being highly popular. Some companies tend to use conceptual and result-oriented expressions in investor relations to attract attention. On the other hand, the high frequency and rapid spread of Q&A on interactive platforms lead some entities to view these as low-cost communication channels, weakening the compliance review standards that apply equally to periodic reports and interim announcements. Deeper reasons include the fact that internal information flow, communication management, and compliance review mechanisms within some companies are not sufficiently sound. The technical descriptions by business departments and the disclosure standards are not effectively isolated and verified, leading to exaggerated statements and blurred boundaries, ultimately resulting in misleading disclosures.

From publicly available information, the responses involved in the incident focused on hot technologies and product developments. Some wording was highly definitive and forward-looking, while subsequent announcements indicated that related products were still in market cultivation stages, had not achieved large-scale sales, and thus had limited impact on current performance with uncertain future sales. The discrepancy between these pieces of information can easily amplify market expectations in a short period. Even if it does not cause drastic fluctuations, it can bias investors’ judgments, which damages the seriousness of information disclosure.

In recent years, online interactive platforms have become an important window for listed companies to communicate with investors. The content of Q&A exchanges often spreads rapidly to secondary markets and social media, forming broader public opinion. In this context, interactive responses are no longer just routine exchanges but part of the company’s information disclosure system. Viewing them as marketing tools or concept dissemination channels undoubtedly increases compliance risks.

In my view, the key to avoiding misleading statements is not to reduce communication but to enhance the professionalism and institutionalization of communication. First, listed companies should incorporate responses on interactive platforms into their internal control systems for information disclosure, establishing review mechanisms that meet the same standards as announcements. When dealing with sensitive matters, cross-departmental verification is necessary to ensure consistency with disclosed information and avoid misleading statements.

Second, there should be a stronger awareness of “phase-specific expression.” For products still in R&D or testing stages, it is important to clearly distinguish between technical validation, prototype testing, small-batch trial production, and large-scale manufacturing; for cooperation matters, to differentiate between intention agreements, framework agreements, and formal contracts; and for revenue impacts, to specify the conditions for recognition and the timing. Clearly communicating uncertainties is also a responsibility to the market.

Third, listed companies need to establish a stable external communication management mechanism. Currently, with the rapid rotation of hot topics, securities affairs departments face high-frequency questioning pressure. However, the more a company is in the spotlight, the more it should remain calm and restrained. Building a standard FAQ response library and setting expression red lines for high-risk areas, avoiding ad hoc responses, are effective ways to reduce misleading risks.

More importantly, from a governance perspective, the issue of misleading statements is fundamentally related to a company’s values and cultural orientation. If management overemphasizes market value management, market attention, or concept labels while downplaying long-term performance and core competitiveness, disclosures tend to become emotionally driven. Conversely, when a company bases its narrative on genuine operational results, its communication naturally relies on data and facts. Ultimately, the quality of information stems from the quality of management.

The operation of the capital market is built on the foundation of information symmetry and integrity. Interactive platforms, investor briefings, and media communications provide more channels for listed companies to showcase themselves, but also impose higher self-discipline requirements. In a complex and volatile market environment with frequent industry theme shifts, companies in the spotlight need to approach each external statement with caution.

The core of market pricing is information quality. During periods of rapid theme rotation and heightened market sentiment, it is especially important to stabilize expectations through truthful, accurate, and complete disclosures. Strict regulation of misleading statements is not only a safeguard for investors’ legitimate rights but also a necessary step to encourage listed companies to focus on value creation and improve governance standards.