The Web3 Industry Heats Up Concept Stocks, Multiple Listed Companies Under Inquiry

Recently, the blockchain concept has sparked a wave of enthusiasm in the A-share market, attracting the attention of regulatory authorities. Several listed companies have received inquiry letters from the exchange regarding their involvement in blockchain business, requesting explanations of the specific circumstances of the blockchain activities and their impact on the company's performance.

According to statistics, 11 companies have currently received regulatory inquiry letters from the Shenzhen Stock Exchange, of which 9 companies have responded. The inquiry letters mainly focus on three major aspects:

1. Require disclosure of the specific model of blockchain business, including application scenarios, profit models, etc;

2. Provide detailed information on business progress, including talent, technology reserves, investment funds, and expected revenue, etc;

3. Warning of business risks.

From the responses of various companies, most of them are still in the exploratory phase of their blockchain business, which has not yet had a substantial impact on their performance.

For example, Zhongqingbao disclosed that its blockchain business had a revenue of only 755,700 yuan in 2019; Cultural Great Wall stated that the relevant software has not yet been put into application; Jinglan Technology claimed that its blockchain system has provided services in some regions, but did not disclose specific performance data; Jingu Co., Ltd. admitted that the current commodity traceability is still in the early stage.

Analyses have pointed out that, currently, except for a few institutions that invest substantial resources in application development, most listed companies' blockchain businesses are still at the conceptual stage, and there is still a long way to go before large-scale application. During market corrections, these concept stocks may face significant risks.

The regulatory authorities aim to standardize the speculation on blockchain concepts and guide listed companies to develop their blockchain businesses rationally. Listed companies should prudently assess the application prospects of blockchain technology, avoid blindly following trends, and effectively protect the interests of investors.

Core Viewpoints

• Multiple listed companies received inquiries from the exchange regarding their blockchain business.
• The inquiry letter mainly focuses on the blockchain business model, progress, and risks.
• Most companies' blockchain operations are still in the exploratory phase and have not had a substantial impact on performance.
• Most publicly listed companies' blockchain businesses are still in the conceptual stage and are a long way from large-scale application.
• Regulatory authorities aim to standardize the speculation around blockchain concepts and guide listed companies to develop blockchain businesses rationally.