Two sponsor representatives from Western Securities have been issued a regulatory warning by the Shanghai Stock Exchange for inadequate due diligence on the ST Xin'an convertible bond project. The exchange pointed out that ST Xin'an's capitalisation of research and development expenditure in 2025 had a significant impact on whether it could continue to meet the conditions for convertible bond issuance, but the sponsors failed to conduct prudent verification that fully considered the feasibility of the R&D technology, support from existing orders, and consistency of accounting policies, and the conclusions in the submitted special response documents were unclear. Previously, ST Xin'an revised its 2025 preliminary earnings estimate, adjusting its net profit attributable to the parent company after deducting non-recurring items from 73.8568 million yuan to 13.5648 million yuan, resulting in a negative cumulative net profit after deducting non-recurring items for the three years from 2023 to 2025, which meant it no longer met the issuance conditions. The sponsor representatives warned this time are Zhang Suxian and He Si. Notably, this is the second violation by Western Securities' investment banking division on the ST Xin'an project. In May this year, two other sponsor representatives were fined a total of 1.9 million yuan by the Jiangxi Bureau of the China Securities Regulatory Commission for illegally acquiring shares in the ST Xin'an IPO project.
Principal Financial Group IncWestern Securities Co LtdWestern Securities' sponsor representatives warned by Shanghai Stock Exchange for inadequate due diligence on ST Xin'an convertible bond project, indicating regulatory scrutiny and potential reputational damage.