Summary of Key Points
Zhonggong Education experienced a short-term surge in its stock price (over 18% in two days) due to a vulgar bet. Subsequently, regulatory authorities quickly initiated an investigation into the individuals involved in the speculation, which led to a nearly 10% drop in the stock price the following day. Behind this farce lies Zhonggong Education's decline from being the "number one stock for civil service exams" (with a peak market value of 260 billion yuan) to a company facing operational difficulties: its performance has shrunk by more than 80%, students are having trouble getting their fees refunded (with over 140,000 complaints from customers), the company is struggling with cash flow (it has only 100 million yuan in cash but owes 800 million yuan in short-term debts), and the equity of its controlling shareholder has been completely frozen. This incident not only exposes the irrational speculation in the stock market but also reflects the deep-seated crises within Zhonggong Education itself.
I. Vulgar Bet to Manipulate Stock Price: An Absurd "Emotional Outburst"
A person with the online username "Nanjing Road Baby Total" posted a sexually suggestive bet on a stock platform using a female profile picture (such as "I will do something if the stock price rises by a certain amount"). The post spread rapidly among stock enthusiasts due to its novelty. As a result, Zhonggong Education's stock price hit the daily limit up on July 6 and rose another 8% on July 7, climbing to the top of the popularity chart. However, the regulatory authorities reacted swiftly: the Shenzhen Stock Exchange first monitored the abnormal transactions, and the China Securities Regulatory Commission (CSRC) initiated an investigation into "An" on the evening of July 7, confirming that he was a man who had fabricated false information to disrupt the market. The stock price plummeted by 9.7% the next day, with investors complaining, "That bearded guy caused trouble and treated the stock market like a casino." Zhonggong Education responded, stating that this was an individual act and had nothing to do with the company's operations.
II. Low Stock Price as a Hotbed for Speculation: The Fall from 260 Billion Yuan to 12.5 Billion Yuan
At its peak in 2020, Zhonggong Education's stock price was 43.58 yuan, with a market value of 260 billion yuan, earning it the nickname "the leader in education stocks." However, its stock price has since dropped significantly, reaching as low as 1.34 yuan and remaining around 2 yuan for a long time, with very low trading volume. This situation, where the stock price is at a minimum level with minimal trading activity, allows a small amount of capital to easily trigger a limit up—this is precisely why such vulgar bets can cause significant price fluctuations in an unattended stock. Today, its market value has shrunk to just 12.5 billion yuan, representing a loss of over 240 billion yuan.
III. The "Backlash" of Contract Classes: From a Profit-Making Tool to a Cash-Flow Sinkhole
Zhonggong Education initially thrived on contract classes that guaranteed fee refunds if students did not pass the civil service exams; students paid in advance, and these fees became substantial prepaid amounts. In recent years, competition for civil service positions has intensified (with lower employment rates), leading to an increase in refund requests. From 2021 to 2023, the company suffered losses of over 3.5 billion yuan. In 2025, its revenue was only 2.2 billion yuan (80% less than 2020's 11.2 billion yuan), and its net profit dropped by 73% to 48 million yuan. The company now owes 508 million yuan in refunds, turning these contract classes from a profitable venture into a burden that drains its cash flow.
IV. Students' Difficulties Getting Refunds: Customer Service Admits "Lack of Funds"
There are over 140,000 complaints about Zhonggong Education on platforms like Black Cat, with most involving delays in refunding fees. For example, a student named Xiao Cha paid 34,000 yuan but was only entitled to a refund of 20,000 yuan after failing the exam; they were told to wait until October 2026 for a refund, with no clear rationale provided. The customer service department admitted, "Our business is currently in poor shape, and we don't have the funds available. We will try to refund the money once we recruit new students during the summer break. If you haven't received your refund, you can seek legal action." The company has only 108 million yuan in cash on its books but owes 800 million yuan in short-term debts, resulting in a debt-to-asset ratio of 85.88%. With so little money to cover its debts, where will the funds come from to refund students?
V. Complete Freezing of the Controlling Shareholder's Equity: Debt Reduction as a Critical Task
The company's owner, Li Yongxin, and his associates have had 100% of their shares frozen by the courts, and an additional 55.89% of their shares are pledged. Management indicates that the top priority is to "stabilize debt" through methods such as debt restructuring, securing low-interest loans from banks, and selling assets, while also hoping to improve revenue from its main business to gradually optimize its debt structure. However, with the current cash flow crisis and high refund pressures, it remains uncertain whether the company can turn things around.
Conclusion
This speculative farce serves as a stark reminder: on one hand, some individuals in the stock market exploit vulgar content to manipulate prices; on the other hand, Zhonggong Education has plummeted from a leader in its industry to a company struggling with massive refund issues. For ordinary investors, it's important not to be misled by short-term speculation—stock prices ultimately reflect the company's fundamental fundamentals. For Zhonggong Education, resolving refund and debt problems is essential for its survival. The rapid response from regulatory authorities also serves as a warning to those who think they can make quick profits in the stock market: the stock market is not a casino, and speculation comes with consequences.