CSSC Offshore & Marine Engineering (Group) Company Limited (COMEC), trading under the stock code 00317, saw its shares plummet by 5.02% during the intraday trading session. The significant drop came shortly after the company announced a new financial services agreement, raising concerns among investors about the company's financial practices and future outlook.

COMEC disclosed plans for a 2026 Financial Services Framework Agreement with CSSC Finance, set to replace the current agreement expiring at the end of 2025. The new agreement encompasses various financial services, including deposits, lending, and foreign exchange services. Notably, some transactions under this agreement are classified as non-exempt continuing connected transactions and major transactions under Hong Kong Listing Rules, necessitating approval from independent shareholders at an extraordinary general meeting (EGM).

The market's negative reaction may stem from several factors related to this announcement. The requirement for shareholder approval at an EGM introduces an element of uncertainty, while the classification of certain transactions as major and connected might raise eyebrows regarding the company's financial practices. Furthermore, the proposed increase in annual caps for 2026, reflecting expectations of higher capital needs and deposit volumes, could be interpreted as a sign of increased financial risk or growing dependency on related parties. These factors combined appear to have dampened investor confidence, leading to the sharp decline in COMEC's stock price.