Turning the tide! Falsification in the first year of listing led to ST—why does this commercial aerospace "dark horse" have the potential to explode?

Questioning AI · Why did ST Zhenlei’s fake revenue inflate lead to a surge in performance?

（ST Zhenlei weekly K-line chart）

Value Line | Source

Good Company | Column

Qiantang, Bian Jiang | Authors

Qiushui | Editor

Value Line Guide

Recently, Value Line has launched two new series: “Hot Companies” and “Good Companies.” Stay tuned, this issue presents the second article.

Recently, the US commercial aerospace sector has exploded. Last Friday, Rocket Lab (NASDAQ:RKLB) surged 34.22%, with a total market value of $8B. Behind the surge, the quarterly report exceeded expectations and set multiple historical records—revenue increased 63.5% year-over-year to $200.3 million, and the backlog doubled to over $2.2 billion.

Additionally, another satellite company, AST SpaceMobile (ASTS.US), will release its earnings after the market close on May 11th Eastern Time, also worth watching.

In June, the IPO of SpaceX is expected to become an important catalyst for the commercial aerospace sector, further boosting market sentiment.

Since May, domestic commercial aerospace launches have entered a dense period, with several significant launch missions scheduled one after another. The industry chain upstream and downstream will see substantial orders and performance support. The superposition and resonance of multiple factors are expected to jointly stimulate the continuous heating of the A-share commercial aerospace sector.

This issue of Value Line focuses on stocks within this sector that have recently been delisted or experienced significant share price declines—Zhenlei Technology (ST Zhenlei). The company has leading technology, solid fundamentals, and its stock price may see a turnaround from adversity.

Fake revenue, three drinks of “liquor”

On April 17th, the major commercial aerospace stock Zhenlei Technology (688270) received a “Preliminary Administrative Penalty Notice” from the Zhejiang Securities Regulatory Bureau (hereinafter referred to as “the Notice”). The company disclosed false statements in its annual report financial indicators, and its stock was subject to other risk warnings.

Investigation found that in 2022, Zhenlei Technology’s wholly owned subsidiary, Hangzhou Chengxin Technology Co., Ltd., inflated operating income by RMB 8.4265 million through related-party transactions with Shenzhen Ruikai Electronics Co., Ltd., accounting for 3.47% of the company’s disclosed operating income for that period; inflated total profit by RMB 6.7208 million, accounting for 6.24% of the company’s disclosed profit for that period, leading to false disclosures in the 2022 annual report.

The Zhejiang Securities Regulatory Bureau plans to warn Zhenlei Technology and impose a fine of RMB 2 million; relevant personnel will also be warned and fined separately.

Zhenlei Technology is one of the core suppliers of satellite internet chips and components, including power management chips, SIP modules, multi-channel integrated RF transceiver chips, high-speed high-precision ADC/DAC chips, digital beamforming chips, frequency synthesis chips, etc., covering various satellites and satellite communication payloads. It is a key RF, power, and ADC/DAC chip supplier in China’s satellite communication field.

The company was listed on IPO on January 27, 2022. After bottoming out in September 2024, its stock began to fluctuate upward. In November last year, the commercial aerospace concept stocks exploded, and by January 26 this year, the stock peaked with a maximum increase of about 10 times.

As early as September 21, 2025, the company’s chairman, Yu Faxin, was placed under detention by the Huangshi City Supervisory Committee in Hubei Province for personal reasons. However, the situation quickly stabilized—just nine days later, on September 30, the detention was lifted, and Yu Faxin resumed normal duties as chairman.

Landing the shoe, performance skyrocketing

It is worth noting that ST Zhenlei did not experience a sharp, single-cut decline like some other ST stocks, but instead largely recovered from the negative news on the same day. This trend clearly indicates that investors believe the issues are manageable.

In fact, ST Zhenlei belongs to active correction. On December 25 last year, the company issued an announcement regarding the correction of previous accounting errors, stating that Chengxin Technology’s 2022 operating income lacked sufficient basis for RMB 8.4265 million, leading to inaccuracies in financial data and disclosures from mid-2022 to Q3 2025. Subsequently, the company was filed for investigation by the CSRC for suspected information disclosure violations. The stock price fell sharply for two days afterward but then resumed its upward trend until peaking on January 26 this year.

The company’s announcement also states that it does not meet the conditions for mandatory delisting due to major violations. During the risk warning period, the stock does not trade on the risk warning board and is not subject to related regulations.

Market analysts suggest that for companies like Zhenlei Technology without a star designation, being on the exchange’s yellow card warning list due to disclosure violations can lead to some institutional funds withdrawing and liquidity shrinking. However, the company’s fundamentals have not materially deteriorated, and there is no immediate delisting risk. After completing compliance rectification, it can be delisted from the warning list smoothly.

This may mean that the “fake revenue” issue at Zhenlei Technology is essentially behind us.

On April 23, Zhenlei Technology’s 2025 annual report disclosed that thanks to the recovery of downstream industries and increased customer product demand, the company achieved RMB 432 million in revenue, up 42.30% year-over-year; net profit attributable to shareholders was RMB 133 million, up 5.8 times.

It is noteworthy that the gross profit margin of the company’s main business rivals Maotai! Among them, RF transceiver chips and high-speed high-precision ADC/DAC chips have gross margins as high as 94.27%, and power management chips as high as 86.75%! Details are as follows:

Looking at the growth rates of various products, power management chips have become a dark horse with over 60% growth. The company states that by 2025, it will have obtained third-party certification for multiple power module products, transitioning from small batch supply to mass production, with most products completing in-orbit flight verification.

Five days after the annual report disclosure, the company also announced its Q1 results. Performance continued to grow rapidly: revenue of RMB 121 million, up 67.01%; net profit attributable to shareholders of RMB 39.58 million, up 76.17%; and non-recurring net profit increased by 1.2 times year-over-year.

Strong technical foundation, future dark horse

Zhenlei Technology’s quick recovery from negative news is no coincidence; it has several “tricks” in the commercial aerospace industry chain.

Compared with recent years’ government work reports, the expression of commercial aerospace has undergone significant evolution: in 2024, commercial aerospace was included in the report for the first time, positioned as a “new growth engine”; in 2025, its position was elevated to an “emerging industry”; and this year, it was incorporated into the broader “aerospace” industry category, explicitly as a “new pillar industry.” Commercial aerospace is not only a high ground in national strategic competition but also a trillion-yuan blue ocean with huge commercial potential. According to forecasts by Qianzhan Industry Research Institute, from 2025 to 2030, China’s commercial aerospace industry will enter a golden development period, with the market size expected to reach RMB 80 trillion by 2030.

（US private launch rocket company RocketLab surges like a rainbow）

Satellite communication is one of the core scenarios of commercial aerospace. Countries are fiercely competing for satellite frequency and orbital resources. In 2025, China plans to launch 50 commercial missions, with 311 commercial satellites, accounting for 84% of all satellites launched that year, reflecting that China’s low-earth orbit satellite constellation network has entered intensive deployment. Meanwhile, overseas, SpaceX submitted an application to the FCC months ago, planning to launch up to one million satellites to build an “orbital data center.”

（SpaceX Falcon 9 rocket carrying 29 Starlink satellites lifts off）

Being in such a super track undoubtedly gives Zhenlei Technology wings for a leap. But strength is essential.

With a good track, good players are needed. The actual controller and chairman, Yu Faxin, born in 1975 in Tonglu, Zhejiang, studied under radar expert Liu Yongtan at Harbin Institute of Technology, and is now a distinguished professor at Zhejiang University. He previously worked at UT Starcom in the US, then led the establishment of Zhejiang Microwave Millimeter Wave RF Industry Alliance to build an independent and controllable industry chain.

However, his early entrepreneurial equity arrangements also attracted regulatory attention: in 2015, when the company was established, due to restrictions from his teaching position, Yu entrusted his mother and former employees to hold 60% of the shares until shortly before the Sci-Tech Innovation Board IPO application; notably, nearly RMB 60.75B of startup funds came from a gift by outsider Qiao Guibin, not equity investment—Yu’s initial capital was only RMB 30k.

Intermediary agencies explained this was based on recognition of his technical ability, but classifying nearly RMB 8B as a gift was rare in capital markets. Although this arrangement technically met the “clear equity” requirements for the Sci-Tech Innovation Board, the timing of the shareholding cleanup and the ambiguous nature of the gift increased the difficulty for review agencies to verify the authenticity of the company’s historical development.

It is this leader, with both academic background and governance controversy, who led the company to break through multiple RF analog technology bottlenecks, effectively supporting key domestic equipment.

And Zhenlei Technology’s technological innovation is very evident. Many of its products have filled domestic gaps and broken foreign monopolies. For example, the CX9840 series RF transceiver chips are the only domestically produced space-grade 8-receive/8-transmit chips verified with 100krad (Si) total dose radiation, comparable to US embargoed products from ADI; satellite digital beamforming (DBF) chips have broken international monopolies on phased array “brains”; high-speed high-precision ADC/DAC chips hold over 60% market share in the aerospace sector.

It is reported that the company can provide integrated solutions of “three cores” (RF transceiver + high-speed ADC/DAC + power management), forming strong customer stickiness. This vertical integration makes it a long-term core supplier for national projects like the StarNet GW constellation and G60 Starlink.

Some institutions believe that ST Zhenlei will enter a performance release period in the future, with growth mainly driven by three main lines:

First, domestic commercial aerospace support transitioning from small batch to mass delivery. The company’s core products, such as spaceborne RF transceiver chips and power management chips, are deeply supporting projects like StarNet (China Satellite Network Group) and G60 constellation. As China’s low-earth orbit satellite network enters intensive deployment, related products will shift from small batch, experimental satellites to continuous mass production.

Second, demand in specialized fields accelerates recovery. Large-scale deployment of core chips in data links, electronic countermeasures, phased array radars, and other specialized areas will drive orders and demand growth.

Third, high-margin chip core business builds barriers. RF transceiver chips and high-speed high-precision ADC/DAC chips have gross margins around 90%, with net profit margins consistently over 30%, providing core support for profit realization.

It is worth noting that some companies in the commercial aerospace sector, such as Xinwei Communications, have hit new highs, and recent rebounds of companies like Chaojie Co., Ltd. are approaching historical highs. Meanwhile, Zhenlei Technology is still about one-third below its January high.

From “inflated RMB 8 million” to “performance up 5.8 times,” the ST label on Zhenlei Technology seems more like a warning than a death sentence. The company’s fundamentals remain strong: technological barriers are still high, and the grand narrative of commercial aerospace has just begun.