On June 5, 2026, Anhui Xinke New Materials Co., Ltd. (referred to as "Xinke Materials", 600255) announced that its board of directors had decided to terminate a private placement and withdraw the application documents, with its share price plunging by 7.04% on the same day.

Just three days prior, this company, tagged by the market with the "high-speed copper connection" concept, had recorded three consecutive daily limit-up gains, with a monthly turnover rate exceeding 30% and its total market capitalization once reaching a high of 8.7 billion yuan.

More intriguingly, the underwriter for this private placement, Guotai Haitong Securities Co., Ltd. (GTHT, 601211), appeared repeatedly in prominent buy and sell positions on Xinke Materials' top trader list over several days.

Withdrawal Following One-Month Review

Looking back, the pace of this private placement was notably swift.

On the evening of January 12, 2026, Xinke Materials disclosed the private placement plan, proposing to issue shares to its controlling shareholder, Sichuan Rongxin Hongzi Technology Co., Ltd., at a price of 3.21 yuan per share, with the number of shares not exceeding 109 million and the total funds raised not exceeding 350 million yuan.

After deducting issuance expenses, the proceeds were to be used entirely to repay bank loans and supplement working capital.

On January 28, the company held an extraordinary general meeting of shareholders to review and pass the relevant proposals.

On May 6, the Shanghai Stock Exchange formally accepted the application documents, initiating the review process.

One month later, on June 5, the company and its underwriter, GTHT, jointly submitted a withdrawal application to the exchange, declaring the termination of the placement.

Only one month had passed from acceptance to termination.

Regarding the reason for termination, Xinke Materials' announcement only briefly mentioned "changes in market environment and other factors," stating that "the original plan no longer aligns with the company's actual situation."

For a company with liabilities amounting to 2.642 billion yuan and an asset-liability ratio approaching 60%, this explanation failed to convince the market.

Underwriter's Frequent Activity on Top Trader List

At the sensitive juncture of terminating the placement, the company's underwriter, GTHT, engaged in multiple trading activities.

According to top trader list data, on June 4, 2026, Xinke Materials closed at the daily limit-up, with a turnover rate as high as 34.37% and a trading volume of 2.959 billion yuan.

Among the top five buyers that day, GTHT Securities' Kunming Renmin Middle Road branch ranked first with net purchases of 40.5282 million yuan, and all purchases from this seat that day were net buys with no selling records.

Among the top five sellers, a seat from GTHT also appeared, with its Shanghai Changning District Tianshan Road branch net selling approximately 29.6973 million yuan.

Different branches of the same securities firm were simultaneously making large purchases and significant sales of the same stock on the same day.

On June 5, GTHT Securities Co., Ltd. Headquarters appeared again on the top trader list with purchases worth 58.9838 million yuan, while the Kunming Renmin Middle Road branch topped the seller list with net sales of 39.0103 million yuan.

On June 8, GTHT Headquarters sold another 60.1457 million yuan.

These three days of trading occurred precisely around the time of Xinke Materials' limit-up gains and the announcement of the placement termination, raising market questions about information barriers and the nature of the trades.

Under information barrier systems, strict "firewalls" should exist between a securities firm's investment banking department and its proprietary trading/brokerage business departments.

Furthermore, were these trades conducted by the proprietary trading desk? If so, does participating in trading of the client company's shares while serving as its underwriter comply with regulatory requirements?

If they were client trades, have the underwriter's information barriers truly been effective?

Currently, the nature of these trades and the types of accounts behind them await further disclosure, and it is unlikely that the China Securities Regulatory Commission (CSRC) and the Shanghai Stock Exchange will overlook this.

Financial Distress and High Debt

Returning to the core issue of the terminated placement: why would a company with high debt and tight funding voluntarily withdraw its application just one month after receiving acceptance notice from the exchange?

Financially, the annual report shows that Xinke Materials' operating revenue for 2025 was 4.751 billion yuan, a year-on-year increase of 20.01%, but its net profit attributable to shareholders was only 30.89 million yuan, a sharp decline of 50.46% year-on-year, presenting a typical case of "revenue growth without profit growth."

Net profit attributable to shareholders after deducting non-recurring items fell even more sharply by 67.52% to 12.13 million yuan.

Meanwhile, the asset-liability ratio climbed from 55.56% at the end of 2023 to 59.16%, with total liabilities increasing from approximately 2.137 billion yuan to about 2.642 billion yuan.

The current ratio was only 0.99, indicating that current assets were insufficient to cover current liabilities, raising concerns about short-term solvency.

More worryingly, net cash flow from operating activities was -92.87 million yuan, further deteriorating compared to the previous year.

Given this financial state, the 350 million yuan private placement was a genuine attempt to "bolster liquidity," making the sudden halt of this capital infusion a topic of market discussion.

"High-Speed Copper Connection" Hype and Stock Price Volatility

Among various opinions, one deserves attention—the "high-speed copper connection" concept.

In early June 2026, remarks by NVIDIA CEO Jensen Huang regarding data center connectivity solutions circulated in the market: "Use copper where you can, use optical where you must."

The A-share "high-speed copper connection" concept subsequently triggered a wave of limit-up gains, with Xinke Materials becoming one of the most sought-after targets.

From June 2 to June 4, Xinke Materials recorded three consecutive daily limit-up gains.

However, in a risk disclosure announcement on the evening of June 4, the company publicly admitted: "The high-speed copper connection cable project of our wholly-owned subsidiary, Sichuan Xinke Zineng Materials Technology Co., Ltd., has not yet commenced production and has not generated revenue.

The high-speed copper connection project of the affiliated company, Tuoxin Zhilian (Santai) Technology Co., Ltd., does not have a significant impact on the company's operating performance as the affiliated company is not consolidated into the financial statements."

In other words, the "high-speed copper connection" concept that fueled the stock's surge over three trading days has not yet contributed any substantive revenue to the company.

More critically, the intended use of the 350 million yuan from the terminated placement did not include the aforementioned copper connection project but was earmarked for repaying bank loans and supplementing working capital.

Just one day after the placement termination, CSRC Chairman Wu Qing explicitly stated at the Fourth Member Congress of the Asset Management Association of China: It is necessary to "resolutely curb concept speculation, complex nesting, excessive speculation, channel idling, and other forms of pseudo-innovation and chaotic innovation."

This statement echoed recent market concerns about concept speculation, though there is currently no public evidence linking it directly to Xinke Materials' termination of the placement.

Insider Selling and Large-Scale Cashing Out

It has been noted that before the placement termination, the company's core management had begun large-scale cashing out.

On March 7, 2026, Xinke Materials announced that Chairman Song Zhigang, Director and General Manager Wang Sheng, and Director, Vice General Manager, and Board Secretary Zhang Long planned to reduce their holdings by a total of no more than 1.95 million shares (approximately 0.108% of the company's total shares) through centralized bidding transactions between April 1 and July 1, citing "personal capital needs."

The implementation of the reduction plan proceeded faster than expected.

Three months later, according to shareholding change disclosures from the Shanghai Stock Exchange, Song Zhigang and Wang Sheng reduced their holdings by 900,000 shares and 525,000 shares respectively, cashing out 3.435 million yuan and 1.911 million yuan.

In fact, this was not the first time Song Zhigang and Wang Sheng reduced their holdings in the company.

Since their first reduction on November 5, 2024, Song Zhigang has cumulatively reduced his holdings by 2.1 million shares, cashing out approximately 6.9253 million yuan in total, while Wang Sheng has cumulatively reduced his holdings by 1.225 million shares, cashing out a total of 3.661 million yuan.

Entering 2026, the frequency of Song Zhigang's reductions noticeably increased.

Compared to the overall lower price range of the previous reduction round (2.67 yuan to 3.19 yuan), the average price for this round's reductions was concentrated in the range of 3.73 yuan to 3.85 yuan, indicating an overall upward shift in selling prices.

Currently, while the reasons for the placement termination, the underwriter's frequent trading, and the large-scale insider selling remain unclear, one thing is certain: although the company's revenue scale appears substantial, cash flow and net profit data prove that its ability to "generate cash" is not strong, and the path to improving profitability through internal growth remains long.

For investors, concept and performance are not equivalent.

There is always a time lag between a concept and the realization of performance, and the valuation bubble during this period is often paid for by following investors.