Investors who have suffered losses can seek compensation for the company's actions.
On July 17, 2026, Shandong Hiking International Co.,Ltd. (stock abbreviation: ST Xinhua Jin, stock code: 600735) announced that the company and related parties received the "Advance Notice of Administrative Penalty" (No. 2 of 2026) from the Qingdao Securities Regulatory Bureau.
According to investigations by the securities regulator, from November 2021 to August 2025, the company was involved in cumulative non-operational fund misappropriation by related parties amounting to 3.936 billion yuan. This information was not disclosed in a timely manner, resulting in material omissions and false records across multiple periodic reports.
Legal experts indicate that, based on the Securities Law and related judicial interpretations, investors who incurred losses due to the company's illegal information disclosure violations can file civil compensation lawsuits in accordance with the law.
Based on the preliminary penalty notice, the eligibility criteria for compensation claims have been updated. Investors who purchased shares between November 1, 2021, and August 26, 2025, and sold them after August 27, 2025, or still held them at a loss, now meet the requirements.
Regulatory Findings and Violations
The regulatory investigation identified the company's main violations.
Firstly, there was a failure to disclose massive fund misappropriation. From 2021 to 2025, funds from the company and its subsidiaries were transferred via intermediaries to its controlling shareholder, Xinhua Jin Group, and its related parties. The annual amounts were 115 million yuan, 561 million yuan, 454 million yuan, 1.582 billion yuan, and 1.224 billion yuan, respectively. Notably, the 2024 amount represented 104.35% of the company's most recently audited net assets.
Secondly, the financial reports contained false entries. To conceal the balance of misappropriated funds in the 2023 semi-annual report, the company artificially increased cash and cash equivalents by 190 million yuan and decreased other receivables by the same amount, inflating assets by 8.24%.
Thirdly, there were material omissions in periodic reports. The 2021 annual report, the 2022 semi-annual and annual reports, the 2023 semi-annual and annual reports, and the 2024 semi-annual report all failed to truthfully disclose the related-party fund misappropriation.
Proposed Penalties and Company Response
The Qingdao Securities Regulatory Bureau intends to order the company to make corrections, issue a warning, and impose a fine of 4.55 million yuan. Responsible individuals will also face simultaneous penalties. In its announcement, ST Xinhua Jin stated that, based on the findings in the Advance Notice, it judges that the information disclosure violations involved do not trigger other risk warning circumstances or major illegal forced delisting circumstances as stipulated by the Shanghai Stock Exchange's listing rules.
However, investor compensation claims triggered by these disclosure violations are already underway. The delivery of this preliminary penalty notice provides evidential support for subsequent litigation proceedings.
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