The stock price of “Tianshan Bio” (300313) surged recently. It hit the upper limit for seven trading days straight from August 19 to 27. Because the deviation of the price changes met the definition for severely abnormal fluctuations, the company issued an announcement that the trading of the stock would be suspended for inspection beginning on August 28. After the trading of the stock resumed on September 2, its price hit the cap again for two consecutive trading days. In only nine trading days, the stock price soared to CNY 23.16 per share from CNY 5.83 per share, an increase of 297.26%, and its turnover rate was 192.79%.

In terms of the company’s fundamentals, “Tianshan Bio” registered losses in both 2018 and 2019. The company’s net profit attributable to shareholders in the first half of 2020 recorded –CNY 7,647,900. Publicly disclosed information shows that, its wholly-owned subsidiary Tongliao Tianshan Animal Husbandry Co., Ltd. is engaged in beef cattle fattening business, and it currently has breeding stock of 596 cattle, all of which are not for slaughtering yet. With relatively short business time, it has not contributed to the income or profit of the company. There are no significant changes in the recent operation or internal or external operating environment of the company. Moreover, the company is currently being investigated by China Securities Regulatory Commission (CSRC) for being suspected of illegal information disclosure.

It was found that, in the nine trading days beginning on August 19, there are clear signs of speculation in the stock trading. Funds entered the market continuously for short-swing speculation, and a lot of individual investors followed blindly, but only a few institutional investors participated. First, most of the investors are individual investors, whose buying amount accounted for 97%. Second, small and medium investors that hold less than CNY 3 million of stocks are the main force, contributing to nearly seventy percent of the buying amount. Third, the overall participation of institutional investors is low, with a buying amount of only 3%. Fourth, in terms of the transaction habit of accounts topping the buying list, their average holding period was short, featuring short-swing trading. Fifth, buying at the raising limit is disperse, and small and medium investors are the main force.

By including “Tianshan Bio” in the list of key stocks under monitoring, SZSE closely watches its trading movements, promptly adopts self-disciplinary regulation measures against abnormal transactions, and strengthens inspection of trading behaviors. We will immediately report any clue of violations such as market manipulation to CSRC. At present, the PE ratio of “Tianshan Bio” is much higher than the industry average and the rise of the stock is not based on performance of the company, which is severely divorced from the company’s fundamentals. Once the stock price falls, small and medium investors who bought it at a high price will suffer unnecessary losses. Investors should raise risk awareness, participate in trading rationally according to laws and should not follow blindly and take chances.

Next, SZSE will implement thoroughly the principles of “system building, non-intervention and zero tolerance”, and fully put in place the work requirements of “the four awes (stand in awe of the market, rule of law, professionalism and risks) and one joint force (The capital market’s development needs all the efforts made by all sides)”. We will continue to regulate trading, actively forestall market risks, resolutely crack down on actions in violation of laws and regulations that maliciously disrupt the market order, to effectively maintain the market order, and fully protect investors’ legitimate rights and interests.