Shenyang Chemical to face “ST” risk warning for past financial misstatements

Shenyang Chemical Industry Co., Ltd. (SZSE:000698) announced it will be subject to a "ST" other risk warning due to financial misstatements in its annual reports from 2018 to 2021, as outlined in a prior administrative penalty pre-notification received on September 30, 2025. The company's stock trading will be suspended on October 9, 2025, and resume on October 10, 2025, under the new "ST Shenhua" ticker, with a daily price limit of 5%.

The misstatements, primarily involving its wholly-owned subsidiary Shenyang Paraffin Chemical Co., Ltd., included artificially adjusting raw material input, semi-finished, and finished product quantities, as well as delaying inventory recognition. This led to false reporting of operating costs, total profits, net profits, assets, and liabilities. For instance, in 2018, operating costs were understated by 129,914,310.43 yuan, and total profits were overstated by the same amount.

The company has already undertaken a self-correction and rectification process, including a retrospective adjustment of accounting errors as disclosed in June and July 2023. Shenyang Chemical Industry plans to apply for the removal of the risk warning twelve months after the China Securities Regulatory Commission issues its official administrative penalty decision.