Summary of Key Points
Zhao Ri Technology, a company that has been incurring losses for four consecutive years and is at risk of delisting, managed to achieve a 20% limit-up in its stock price through a combination of changes in controlling shareholders and the acquisition of assets from the new actual controller. However, this move hides behind various interest arrangements between the old and new shareholders. The old shareholder, Xinjiang Chaojun, sold all his shares at a 27% premium, successfully cashing out a large amount of money; the new controlling shareholder, Jing He Heng (with actual control by Qu Jialin), reduced costs by using low-priced shares from the acquisition of Bai Nei Technology and also profited from the rising stock price. Nevertheless, Bai Nei Technology has a low business entry barrier and its core competitiveness is not sustainable, making this capital maneuver more of a short-term stimulus rather than a creation of long-term value, which should be approached with caution.
I. A “Win-Win” Situation for Old and New Shareholders: A Perfect Transaction
Old Shareholder Xinjiang Chaojun: An Unexpected Windfall
Zhao Ri Technology has been losing money for four years, with revenues falling short of 150 million yuan, nearing the delisting threshold. According to regulations, Xinjiang Chaojun could only reduce his shareholdings by a maximum of 25% per year, making it difficult for him to withdraw completely from the company. However, Jing He Heng offered a price of 11.3 yuan per share (27% higher than the pre-shutdown price of 8.87 yuan), buying all his shares at once and allowing Xinjiang Chaojun to cash out 539 million yuan—almost like finding a windfall, so he was naturally willing to sell.
New Shareholder Jing He Heng: A Low-Risk, High-Return Strategy
Jing He Heng may have paid a high price for the shares, but he actually made back the investment through three strategies:
1. Profiting from Rising Stock Prices: As soon as the acquisition news was announced, the stock price soared (limit-up upon resumption of trading, closing near the cost price), and if it continued to rise, they could have made a profit on the difference.
2. Reducing Costs with Low-Price Shares: Part of the payment for acquiring Bai Nei Technology was in the form of Zhao Ri Technology’s own shares, priced at only 6.07 yuan per share (far lower than the purchase price of 11.3 yuan), effectively using cheaper shares to offset their overall holding costs.
3. Asset Appreciation: By turning Bai Nei Technology from a private company into a public one, its valuation could increase significantly, with this profit going to Qu Jialin (who holds 99.99% of the shares in Bai Nei Technology).
Moreover, Jing He Heng faced little financial pressure: his own funds were in place, and he also received a loan offer from a bank, resolving any funding issues.
II. Bai Nei Technology: impressive Performance but Limited Substance
Bai Nei Technology’s performance seems impressive: founded in December 2024, it earned a net profit of 21.89 million yuan in 2025 (ROE nearly 100%, meaning a 100% return on investment), and another 11.61 million yuan in the first quarter of 2026. However, its business is in server component testing and maintenance, which has a low entry barrier:
- Temporary Core Competencies: The company’s advantages, such as industry growth, team size, regional coverage, and spare parts supply, are easily replicable by others—anyone with the necessary equipment and engineers can enter the market.
- Unsustainable Industry Benefits: The current demand for AI computing power is high, but once more competitors enter, profits will be diluted. For example, if selling a server currently yields 1000 yuan in profit, ten companies competing for the same business might only leave them with 200 yuan.
In short, Bai Nei Technology seems to be more of a company that is taking advantage of current trends for quick profits rather than having a core technology that creates lasting value.
III. The Stock Price Limit-Up: A Short-Term Stimulus That Masks Long-Term Risks
Why did the stock price limit up? Because changes in control and acquisitions are typically positive signals in the capital market—new owners bring potential earnings, and investors see hope for the company’s future. However, wealth does not appear out of nowhere:
- If Bai Nei Technology’s performance declines (e.g., due to increased competition), its stock price could plummet.
- The current rise is driven by expectations; if these expectations are not met, retail investors who bought into the stock may suffer losses.
To illustrate: Imagine buying a beautifully packaged box, only to find plastic inside instead of gold. Similarly, Zhao Ri Technology’s current high stock price might be like such a package—whether the “gold” (Bai Nei Technology) is truly valuable remains uncertain.
IV. Beware of the Hidden Risks Behind Changes in Control and Acquisitions
Why should we be cautious? Such transactions have two major issues:
1. Aggressive Acquisition Method: Zhao Ri Technology acquired 100% of Bai Nei Technology’s shares outright, rather than starting with a smaller stake to test the waters. If Bai Nei Technology fails, the losses could be even greater.
2. Lack of Supervision: Qu Jialin is both the owner of the listed company and the acquired entity, essentially overseeing himself. If he claims that Bai Nei Technology will generate 100 million yuan in profits, it’s difficult for anyone to challenge his claims, potentially leading to fraudulent practices.
3. Capital Manipulation Over Value Creation: This type of operation focuses on short-term gains through “shell sales” and asset inflations rather than the company’s actual growth. It may be exciting in the short term but is not beneficial for investors in the long run.
The capital market needs companies that can generate sustainable profits, not those that rely on clever financial maneuvers. Such combinations of changes in control and acquisitions are more about redistributing wealth, and ordinary investors should be wary of being exploited.
Final Reminder
Although the stock price has risen, don’t blindly follow the trend. Investment should be based on the company’s true value, not on short-term capital games. If Bai Nei Technology’s competitiveness weakens, Zhao Ri Technology’s stock price could quickly fall back. Remember: There are no free lunches; seemingly perfect transactions often hide unseen risks.