China A-share Market Historic Rarity! Hundred-Billion Market Cap ST Company Appears

Log in to Sina Finance App and search for [Information Disclosure] to see more evaluation levels.

When it comes to stock trading, look at the Golden Kylin Analyst Reports—authoritative, professional, timely, comprehensive—helping you discover potential thematic opportunities!

Currently, in the A-share market, some ST companies have a market value exceeding many non-ST companies. Some ST companies have a market value over 10 billion yuan, and there are even ST companies with a market value exceeding 100 billion yuan, attracting market attention.

Several experts interviewed by Securities Times believe that the reasons for these phenomena are diverse and that the market should view the market value of ST companies rationally.

Rare in history: ST companies with a market value of 100 billion yuan appear in A-shares

In the minds of ordinary investors, ST companies (including both ST and *ST cases) are often seen as synonymous with problematic companies. These companies generally have poor performance, many issues, and small market values. However, in the current A-share market, there is a growing group of ST companies with market values exceeding 10 billion yuan, and some exceeding 100 billion yuan.

Wind data shows that, as of now, there are 14 ST companies in the A-share market with a market value over 10 billion yuan, including *ST Songfa, *ST New Tide (rights protection), ST Renfu (rights protection), and *ST Chengchang, among others, with many exceeding 20 billion yuan. Among them, *ST Songfa’s market value has even surpassed 100 billion yuan, attracting widespread market attention. Its current market value even exceeds that of 95% of non-ST companies.

It is worth noting that, like many ordinary listed companies, the stock prices of ST companies fluctuate dynamically with changes in the stock market and company fundamentals, so their market value is not fixed. From a fundamental perspective, *ST Songfa is expected to “remove the star and帽” (i.e., lift the risk warning). The company recently announced an application to revoke the risk warning on delisting.

Data shows that among the 14 latest ST companies with a market value over 10 billion yuan, as many as 11 still had a market value below 10 billion yuan at the end of 2024, and 5 companies’ market value was below 10 billion yuan by the end of 2025. On the other hand, many companies that once had a market value exceeding 10 billion yuan saw their stock prices decline gradually after being subject to risk warnings, causing their market value to fall below 10 billion yuan. There have been cases in the past where companies with a market value exceeding 10 billion or even 100 billion yuan were subject to risk warnings and eventually delisted.

Characteristics of high-market-value ST companies

An analysis of current ST companies with a market value over 10 billion yuan shows that the reasons for being ST are diverse, including poor financial indicators, audit issues, false records, etc. Industry-wise, these companies are widely distributed across various sectors, with relatively more in defense, military industry, pharmaceuticals, and biotech. Some ST companies have relatively large assets, with substantial fixed assets or high revenue scales; some hold important industry positions and have high strategic value in the supply chain; others have strong transformation expectations, with the market holding high hopes for restructuring, transformation, or business improvement.

Senior market analyst Gui Haoming pointed out that the high market value of some ST companies is due to multiple reasons, including their large size, companies that are not loss-making but are labeled ST for non-financial reasons, and the fact that they are favored by capital, with their stock prices driven up by restructuring concepts.

Yu Yang, Deputy Director of the Financial Development and State-Owned Enterprise Research Institute at China (Shenzhen) Comprehensive Development Research Institute and a registered international investment analyst, told Securities Times that the fact that some companies under risk warning (ST, *ST) have higher market values than non-ST companies is an objective result of the refined differentiation of valuation logic and individual valuation in the A-share market. It breaks the traditional stereotype that “ST companies are low market value and low value.” The core reasons include:

1. Substantial improvement in fundamentals. Some companies are only ST due to short-term compliance issues or temporary operational fluctuations, not because their main business has collapsed. If they achieve performance turnaround, profit recovery, or business transformation, the market will price them based on their true operational value, pushing their market value back to a reasonable level.

2. Capital operation and bailout expectations add value premiums. Some ST companies are supported by state-owned capital or industrial capital, which through debt restructuring, asset injection, and business integration, help them escape difficulties. The market assigns a premium to their “turnaround,” directly boosting their market value.

3. Transaction structure and capital behavior drive valuation. The ST sector is limited by institutional holdings, mainly driven by retail and speculative funds. Coupled with small market caps and high share concentration, they are more susceptible to positive catalysts, causing temporary rises in market value. Meanwhile, the label of ST is gradually weakening in the market.

4. Sector and asset attributes support valuation. A few ST companies fit high-end manufacturing, strategic emerging industries, or possess core assets and scarce business attributes. The market prices them based on sector valuation systems, allowing their market value to surpass traditional non-ST targets.

In summary, this phenomenon reflects a more rational and personalized valuation in the A-share market. The market value is not necessarily related to the ST label, but high market value ST companies are only examples within the sector and do not represent the overall characteristics of the ST sector.

Yintai Securities strategist Chen Jianhua told Securities Times that since the risk warning system was introduced, it has undergone multiple major revisions. The regulatory approach has shifted from simply “protecting investors” to “eliminating the weak, normal delisting, and high-quality development.” He believes that with further improvement of trading systems, the scope of risk warnings in the A-share market has significantly expanded, which in some ways breaks the stereotype that ST stocks are junk stocks. Therefore, he suggests that it is not appropriate to judge market value solely based on the ST label. Some companies under “other risk warnings” may still have certain competitive advantages in assets and ongoing operations, so their market value may still be significant.

Rationally viewing the market value of ST companies

Experts generally agree that a rational view of the market value and investment potential of ST companies is necessary.

Yu Yang believes that the investment value of ST companies includes several aspects: first, valuation recovery from turnaround. For companies with stable main businesses that are only ST due to short-term issues, once rectified and帽 removed, the risk discount will disappear, and valuation will return to normal industry levels, offering significant recovery gains.

Second, the benefits of capital operation. Relying on bankruptcy restructuring, asset reorganization, and state-owned enterprise support, high-quality assets and debt exemptions can fundamentally improve company operations, allowing investors to share the benefits of restructuring.

Third, opportunities for mispriced targets. After being ST, institutional passive reduction can cause stock prices to oversell. If the fundamentals are intact, this creates a temporary valuation gap.

Fourth, high elasticity of trading. Overall, ST companies have lower market caps and higher stock price volatility. Under positive catalysts like operational improvements and capital operations, they have high price elasticity, suitable for professional investors to play.

Regarding the core potential risks of ST companies, Yu Yang pointed out several aspects: first, mandatory delisting risk. Companies that trigger delisting indicators related to finance, trading, regulation, or major violations will be delisted, posing extreme risks of principal loss—this is the most core risk for ST companies.

Second, financial and internal control risks. Many ST companies have issues such as losses, internal control failures, and disclosure violations, with significant uncertainties about financial authenticity and ongoing viability.

Third, market liquidity risk. The overall trading activity of the sector is low, and some targets may experience continuous limit-downs or liquidity shortages.

Fourth, valuation bubble burst risk. Targets driven solely by hype and lacking fundamentals may see their valuations deviate from reality, leading to rapid price corrections and significant market value reductions.

Fifth, shareholder equity dilution risk. Restructuring, debt-to-equity swaps, and private placements during bankruptcy reorganization can significantly dilute small and medium shareholders’ interests, risking imbalance in profit distribution.

Yu Yang reminds that the ST sector is a high-risk investment area. Its investment value exists only in cases of substantial fundamental improvement, high certainty of capital operations, and core competitiveness of the main business. Ordinary investors should fully recognize the risk attributes, exercise caution, strictly control positions and risk exposure, and avoid blindly participating.

Chen Jianhua also pointed out that under the current risk warning system, it is clear that companies labeled ST have significant flaws in some aspects. Overall, the ST sector remains one of the highest-risk areas in the market. He recommends that investors participate rationally, avoid blindly speculating, and focus more on fundamentals, carefully assessing the company’s ongoing operations and compliance improvements to truly grasp investment opportunities arising from fundamental improvements in ST-listed companies.

(Article source: Securities Times)