Five Companies Penalized in Quick Succession Overnight, Suspected of "Brain-Computer Interface" Concept Speculation and Financial Fraud

After the market close on March 17, the A-share market saw a crackdown by regulators. Yingji芯 (688209.SH), Yahui Long (688575.SH), *ST Xingnong (603789.SH), Kechuang Information (300730.SZ), and Xingyun Technology (300209.SZ) each announced receipt of administrative penalty decisions or prior notice letters. The specific reasons involve a variety of issues: some companies concealed equity agreements during restructuring, some engaged in hype around “brain-computer interface” concepts, and others directly manipulated financial data.

Yingji芯 and Yahui Long: Penalties related to “brain-computer interface”

The main issue with these two companies is misleading statements related to the “brain-computer interface” concept.

On January 5 this year, Yingji芯 asked on an interactive platform: “What is the company’s product progress and future plans in core chips such as EEG signal acquisition?” The next day, the company responded that it has entered the brain-computer interface chip field, and its IPA1299 chip is an 8-channel, low-noise 24-bit ADC chip designed for high-precision measurement of biological electrical signals, applicable to EEG signal collection and related scenarios. It is currently mass-produced and shipped, with performance comparable to leading overseas chips.

On January 7, under regulatory inquiry from the Shanghai Stock Exchange, Yingji芯 issued a supplementary announcement. The announcement stated that “the company’s brain-computer interface products use a non-invasive technical approach, which differs significantly from the invasive dominant technology abroad,” and that “IPA1299 was jointly developed with the affiliated company Jingxin Weier (Changzhou) Electronic Technology Co., Ltd.” It also mentioned that the product is in the market cultivation stage and has not yet achieved large-scale sales or revenue, which contradicts the previous description that “the IPA1299 chip has been mass-produced and shipped.”

In response, the Shenzhen Securities Regulatory Bureau stated in the “Preliminary Notice of Administrative Penalty” that the company provided inaccurate and incomplete information, constituting misleading statements. A total fine of 8 million yuan was proposed for the listed company, its CEO and chairman, and the secretary of the board.

Yahui Long’s case is similar. On January 6, the company announced a strategic cooperation agreement with Shenzhen Brain-Computer Interface Starlink Technology Co., Ltd., to jointly develop research products related to brain-computer interfaces and promote subsequent market expansion and promotion, aiming to improve diagnosis and treatment technology in central nervous system diseases. This caused its stock price to rise 6.52% that day, with trading volume surging 299%.

During subsequent regulatory processes, Yahui Long clarified in its disclosure that “the partner does not have invasive technology,” but did not fully disclose the actual development stage of the partner’s products. Later, in response to inquiry letters, the company also failed to disclose the actual progress of product development. Three consecutive disclosures were inaccurate and incomplete, resulting in fines totaling 7.5 million yuan for Yahui Long and its chairman and secretary. Notably, on the day Yahui Long was fined, the company also announced the resignation of its secretary Wang Mingyang “due to personal reasons.”

Market reactions on March 18 showed Yingji芯 closing at 21.74 yuan, up 3.38% year-on-year; Yahui Long closed at 15.15 yuan, down 0.79%. In terms of capital flow, the former saw a net inflow of 13.47 million yuan from main funds, while the latter experienced a net outflow of 3.88 million yuan.

Xingyun Technology: Concealing part of equity agreements

This is the only case involving penalties against entities other than the listed company itself.

Xingyun Technology’s announcement shows that the penalty only targets the company’s former controlling shareholder “Xiao Siqing,” current actual controller “Wang Wei,” and their concerted action partner “Shenzhen Tianxingyun Supply Chain Co., Ltd.” (referred to as “Tianxingyun”).

On September 30, 2024, Changsha Intermediate Court accepted the restructuring application of Xingyun Technology’s predecessor, “You Ke Shu.” At that time, You Ke Shu had been losing money for four consecutive years, with a total net loss of over 4.399 billion yuan from 2020 to 2023. In November 2024, “white knight” Wang Wei and Tianxingyun appeared as industry investors. Later that year, the court approved the restructuring plan, and in March 2025, the shares transferred to the designated shareholder were officially transferred. This marked Wang Wei’s formal takeover of the listed company.

However, Hunan Securities Regulatory Bureau’s investigation found that between September 2024 and March 2025, Wang Wei, Tianxingyun, and Xiao Siqing privately signed agreements and commitments that could directly affect the company’s equity structure. If fulfilled, these documents would cause significant changes to the company’s equity and impact restructuring progress and investor decisions. These documents, however, were never disclosed publicly.

The securities regulator determined that all three parties, as statutory information disclosure obligors, failed to fulfill their disclosure obligations. The penalties include fines of 3.5 million yuan for Xiao Siqing, 3 million yuan for Tianxingyun, and 3.5 million yuan for Wang Wei (including 50,000 yuan for Wang Wei as the responsible person for Tianxingyun’s violations).

Market reactions on March 18 showed Xingyun Technology opening lower and then rising to close at 11.01 yuan, up 5.78%. The company responded that the penalties mainly target the shareholders, and the control rights remain stable.

*ST Xingnong and Kechuang Information: Inflated 2023 performance

Unlike the previous three companies, the penalties against *ST Xingnong and Kechuang Information are related to financial fraud.

*ST Xingnong’s violations occurred in 2023. Zhejiang Securities Regulatory Bureau’s investigation revealed that the company, through its wholly owned subsidiary “Bazhou Xingguang Zhiyuan Smart Agriculture Technology Co., Ltd.,” engaged in false cotton harvesting and consulting services, inflating revenue by 60.73 million yuan, accounting for 19.69% of the reported revenue; and inflating profit by 5.29 million yuan, representing 9.77% of total profit. It was only in September 2025 that *ST Xingnong issued a correction announcement.

Kechuang Information’s issue involved revenue recognition methods. Hunan Securities Regulatory Bureau’s investigation showed that in April 2023, the company sold servers and application software to Dayu Digital Technology (Beijing) Co., Ltd. Under circumstances where the company did not have control over the goods, it still used the gross method to recognize revenue and incorrectly adjusted the amounts during the consolidation process. This led to an overstatement of revenue by 46.32 million yuan (33.57% of reported revenue) and profit by 12.79 million yuan (71.94%) in the first half of 2023. A year later, the company issued a correction and retrospective adjustment.

The penalties include fines totaling 6.9 million yuan for *ST Xingnong and its then-CEO, director, general manager, and the general manager and financial officer of its subsidiary; and 3.7 million yuan for Kechuang Information, its then-chairman, general manager, and the financial manager involved in accounting. Almost all management and operational personnel were affected.

Market reactions on March 18 showed *ST Xingnong closing at 6.13 yuan, up 4.97%; Kechuang Information at 13.57 yuan, up 8.21%. Notably, *ST Xingnong also issued an “Abnormal Trading of Stocks” notice, stating that the stock’s closing prices over three consecutive trading days had a cumulative deviation of 14.95%, with significant fluctuations, but the company’s fundamentals had not changed significantly. Investors are advised to trade rationally and be aware of risks.