Six-day surge with five consecutive daily limits, increasing over 61% for Sanfang Lane: Four reminders to investors—possible change in actual control, rising product costs, and an expected loss last year.

Meiri Reporter | Wen Duo
Meiri Editor | 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 its 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 losses year-over-year. Even more severe, all shares held by the company’s controlling shareholder, Sanfangxiang Group Co., Ltd. (hereinafter referred to as Sanfangxiang Group), and its concerted parties 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.

Sfangxiang stock price trend over the past six trading days Image source: Wind

Company warns of potential change in actual control

According to the latest stock trading risk warning announcement released by the company on the evening of March 18, 2026, the company warns the market: “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 notice at the end of February.

The risk stems from the fact that all shares held by the company’s controlling shareholder, Sanfangxiang Group, and its concerted party, Jiangsu Sanfangxiang International Trade Co., Ltd. (hereinafter referred to as Sanfangxiang Guomao), are under “freeze” and “pledge” status. As early as the announcement on February 26, 2026, 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 freeze is that the controlling shareholder is involved in debt and contractual 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 contractual disputes, Jiangyin Jisheng Investment Development Co., Ltd. and Jiangyin Dongwu Construction Investment Co., Ltd. applied for pre-litigation property preservation with the Jiangyin People’s Court, leading to the freezing of the aforementioned shares. Both companies applying for the freeze are local state-owned enterprises in Jiangyin.

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

Rising product prices have reduced downstream customer purchasing willingness

While the controlling shareholder faces high risks, 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 five consecutive daily limit-ups. During this period, the turnover rate also gradually increased from 2.68% on March 12 to 10.65% on March 18.

Behind the sharp rise in stock price is the company’s poor performance. According to Sanfangxiang’s 2025 annual performance forecast, the company expects a net profit attributable to shareholders of -760 million to -840 million yuan, an increase in losses of 55.91% to 72.32% compared to the previous 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. The company’s order backlog has been affected by rising raw material costs, 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 of trading risks in the secondary market, make rational decisions, and invest prudently.

Cover image source: Meiri Media Library