On the evening of November 10, *ST Yuan Cheng announced it had received a preliminary notice from the Shanghai Stock Exchange (SSE) regarding its impending delisting. The company's stock had closed below a total market capitalization of 500 million yuan for 20 consecutive trading days, triggering mandatory delisting criteria. The stock opened with another limit-down drop on the same day, closing at 0.58 yuan per share, shrinking its total market value to 190 million yuan.

Headquartered in Hangzhou, this environmental services firm not only faces market-cap delisting but was also fined 37.4546 million yuan by the China Securities Regulatory Commission (CSRC) for three consecutive years of financial fraud. Its actual controller, Zhu Changren, was fined 28 million yuan and banned from the securities market for 10 years. The company's Q3 report shows approximately 12,600 shareholders still holding the stock.

Since October 13, *ST Yuan Cheng’s stock price has plummeted, enduring 21 consecutive limit-down sessions by November 10. As early as October 14, when its market cap first dipped below 500 million yuan to 485 million yuan, the market raised concerns, prompting the company to issue a risk warning. Under SSE rules, companies meeting the 20-day sub-500-million-yuan threshold face immediate suspension without a delisting grace period. Thus, trading of *ST Yuan Cheng was halted starting November 11, pending the SSE’s final delisting decision.

A graver issue stems from fraudulent financial reporting, which risks triggering a major-violation delisting. The CSRC’s October 10 penalty notice revealed that from 2020 to 2022, Zhu Changren orchestrated the inflation of labor and machinery costs for the Yuelong Mountain International Tourism Resort project, fabricating 209 million yuan in revenue and 50.46 million yuan in profits. The inflated profits accounted for 36.60%, 19.32%, and 1.62% of disclosed annual profits in 2020, 2021, and 2022, respectively. Additionally, in 2022, the company failed to properly account for price-review discrepancies in the Huaiyin project, overstating revenue by 14.16 million yuan and profits by 13.45 million yuan.

The fraud extended to financing: from July to November 2022, *ST Yuan Cheng raised 285 million yuan via a private share placement, using falsified Yuelong Mountain project financial data in its filings—constituting fraudulent issuance. The Zhejiang Securities Regulatory Bureau fined the company and five responsible individuals a combined 79.45 million yuan, with Zhu Changren personally penalized 28 million yuan and banned for a decade. Other executives faced fines ranging from 2 million to 5 million yuan.

Operationally, the company’s contraction and losses have worsened. From 2022 to 2024, revenue slid from 294 million yuan to 146 million yuan, with cumulative net losses exceeding 500 million yuan. In Q1-Q3 2025, revenue stood at 102 million yuan against a net loss of 143 million yuan, with Q3 revenue plunging 54.70% year-on-year to just 20.14 million yuan.

Beyond delisting, *ST Yuan Cheng’s debt crisis is escalating. Its 2025 interim report cited liquidity strain due to unpaid receivables, overdue bank loans, frozen accounts, and mounting repayment difficulties. As of mid-2025, cash on hand was a mere 8.3323 million yuan, dwarfed by 465 million yuan in short-term loans and 68 million yuan in current non-current liabilities.

Since early 2025, creditor banks have taken legal action. Shanghai Bank’s Hangzhou branch, ICBC’s Hangzhou Baochu sub-branch, and Agricultural Bank of China’s Hangzhou Jiefang Road sub-branch sued over loan defaults totaling 18.0759 million yuan, 33.5415 million yuan, and 49.2956 million yuan, respectively. Industrial Bank’s Hangzhou Linping sub-branch filed six lawsuits worth 138 million yuan, citing deteriorating creditworthiness and unpaid dues despite negotiations. Nanjing Bank’s Hangzhou branch and Hangzhou United Rural Commercial Bank’s Dingqiao sub-branch also sued for 22.4371 million yuan and 32.7643 million yuan, respectively, bringing total disputed loans to ~294 million yuan. Public records show *ST Yuan Cheng’s enforced penalties now exceed 97.6466 million yuan.

Notably, during its three-year fraud span, *ST Yuan Cheng’s audits were handled by Tianjian, Zhitong, and Zhongxing Cai Guanghua accounting firms—all issuing unqualified opinions. Its 2022 private placement underwriter, Haitong Securities, reported no major issues in that year’s supervision report, only disclosing internal control flaws and irregular fund flows in 2023. As delisting looms, scrutiny over these intermediaries’ accountability intensifies.