On October 9th, the controlling shareholder and chairman of Chendu Xinyisheng Communication Technology Co., Ltd. (Xinyisheng) sold stocks to cash out, corresponding to a market value of 4.181 billion yuan (RMB). The company’s stock price has surged over 600% from its low point in April 2025, prompting the chairman to cash out at this “peak”.
In the “Shareholder Inquired Transfer Pricing Information Promotional Notice” released on October 9th, Xinyisheng announced that the controlling shareholder and chairman Gaoguangrong intended to transfer 11.43 million shares, which accounts for 1.15% of the total share capital. The transfer plan has been subscribed to by 16 institutions, with the transfer pricing set at 328 yuan per share.
As of the closing on October 9th, Xinyisheng’s stock price was 351.15 yuan per share, with a total market value of 349 billion yuan. Based on the closing price, the transfer pricing is at a 6.6% discount from the closing price. If calculated based on the closing price of 365.77 yuan per share on September 30th, the chairman’s cash out amounts to 3.749 billion yuan; whereas based on the closing price, it corresponds to a market value of 4.181 billion yuan.
The announcement stated that this transfer was conducted privately and did not involve public auctions or bulk trading, and it is not classified as secondary market reduction. The recipients of the transfer are not permitted to transfer the shares received within 6 months, and it “does not involve changes in the company’s control rights, nor will it affect corporate governance structure and ongoing operations.”
According to Sohu Finance on October 10th, Xinyisheng’s stock price has surged over 600% since April 2025, with Gaoguangrong’s move considered a “peak” reduction.
This is not the first time Gaoguangrong has reduced holdings in the company. From October 2022 to July 2023, he reduced holdings by over 10.99 million shares through bulk trading and concentrated bidding, cashing out over 579 million yuan; In March and April 2023, Gaoguangrong illicitly transferred 1.42% of shares through family trust accounts, leading to confiscation of illegal gains totaling 9.4986 million yuan and a fine of 22 million yuan, totaling 31.4986 million yuan.
Additionally, company executives have frequently reduced holdings. Since 2023, there have been 42 reduction operations with no record of increase.
Following the disclosure of Xinyisheng’s reduction announcement, the company’s stock price plummeted. On October 9th, the stock price fell by 4% to 351.15 yuan per share, with a net outflow of major funds amounting to 2.032 billion yuan. Investors suspect that the chairman’s actions of “cashing out at a peak” were to avoid valuation risks.
Sohu Finance indicates that Gaoguangrong’s current share pledge ratio is at 42%, and if the stock price falls by over 20%, it may trigger a liquidation risk. Coupled with his historical violations, the company’s governance dimension may continue to face pressure.
Public information reveals that Chendu Xinyisheng Communication Technology Co., Ltd. was established on April 15, 2008, and is a Chinese supplier of customized products and professional system solutions for optical modules and subsystems. Its products are widely used in the AI field, making it a key player in providing crucial technology for AI infrastructure development in optical communication equipment manufacturing. Leveraging the dividends of artificial intelligence, Xinyisheng has experienced rapid growth in downstream demand in recent years, leading to a surge in performance.
As reported by Caixin on October 10th, in the first half of 2025, Xinyisheng’s revenue skyrocketed by 282.64% year-on-year, and net profit surged to 3.942 billion yuan, an increase of 355.68%. However, amidst rapid expansion, the pressure on its fund utilization is also rising.
By the end of 2024, Xinyisheng’s accounts receivable stood at 2.54 billion yuan, a more than 250% increase compared to the end of 2023, far exceeding the revenue growth rate at 179.15% during the same period. By mid-2025, its accounts receivable soared to 5.017 billion yuan, a year-on-year increase of 225.36%. Due to the significant increase in accounts receivable, the company’s net cash flow from operating activities in 2024 was only 641 million yuan, a decrease of 48.56% year-on-year, equivalent to only 7.41% of the current operating income. At the same time, Xinyisheng’s asset-liability ratio has been rapidly rising, from 15.12% in 2023 to 32.11% in 2024, further increasing to 33.08% by mid-2025.
Caixin believes that Xinyisheng heavily relies on overseas markets and faces the impacts of various factors such as exchange rate fluctuations, trade policies, and geopolitical frictions. Any slight disturbance may subject the company to turbulent times. Failure to sustain the fundamental aspects may ultimately lead to the collapse of the stock market myth.