On the evening of December 26, A-share listed company Shengyuan Environmental Protection issued a bizarre announcement revealing a massive loss on a private fund product in which the company invested 60 million yuan. The loss occurred abruptly and was concentrated within a single week, with the weekly loss ratio reaching a staggering 72%. Such an extreme loss within such a short timeframe is almost beyond ordinary imagination.
According to Shengyuan Environmental Protection's announcement, the fund manager, Shenbo Xintou, engaged in illegal activities including unauthorized trading, violations of information disclosure obligations, and even falsification of fund net asset value information. The fund custodian, China Merchants Securities (CMSC), was found to have violated regulations by failing to perform its supervisory and verification duties. The company stated that it has reported the incident to public security authorities and has engaged lawyers to take corresponding legal actions, intending to initiate litigation or arbitration against Shenbo Xintou and CMSC. Shengyuan Environmental Protection became aware of this massive loss event no later than December 12, but did not disclose it until December 26, indicating a serious delay in information disclosure. Consequently, just one day later on December 27, the company, along with its Chairman, General Manager, and Board Secretary, received warning letters and regulatory letters from the authorities. The origin of this incident dates back to the first quarter of this year. In February and March 2025, Xiamen Jinlingji, a wholly-owned subsidiary of Shengyuan Environmental Protection, signed fund contracts with the private fund manager Shenzhen Shenbo Xintou Investment Management Co., Ltd. (hereinafter referred to as "Shenbo Xintou" or the "Fund Manager") and the custodian, China Merchants Securities (CMSC). Xiamen Jinlingji utilized idle proprietary funds as a single investor to subscribe to the "Shenbo Hongtu Growth No. 1 Private Securities Investment Fund" product issued by Shenbo Xintou, with a subscription amount of 60 million yuan. The fund manager, Shenbo Xintou, is registered with the Asset Management Association of China under number P1004558, and the fund custodian is China Merchants Securities (CMSC). The fund's investment scope primarily includes equity assets, fixed income assets, as well as futures and derivative products, classifying it as an R4 level investment product. By December 9, 2025, Shengyuan Environmental Protection communicated with the fund manager, planning to "redeem all fund shares this week and requested the latest NAV statement." On December 12, 2025, the company received the fund's NAV statement via email, showing values as of December 11, and the results were shocking. As of December 4, the fund's NAV per unit was still 0.9215 yuan, with a total net asset value of 55.29 million yuan. However, by December 11, after just one week, the NAV per unit had plummeted to 0.2696 yuan, and the total net asset value had drastically shrunk to 15.576 million yuan. This means that over the past several months, the product had incurred losses of less than 8%, but suddenly lost over 70% in the final week.
It raises curiosity as to why the fund experienced such severe losses seemingly "overnight." Furthermore, why did Shengyuan Environmental Protection suddenly request redemption on December 9? Had the company already been aware of the massive loss at that time? Shengyuan Environmental Protection ultimately applied to redeem the fund on December 25. By this time, the losses had further expanded. The fund's latest NAV per unit was 0.1846, with a cumulative net value growth rate of -81.54%, resulting in a loss amount of approximately 46.92 million yuan. It is important to note that the company's full-year 2024 net profit after non-recurring items was only 165.7 million yuan; the nearly 47 million yuan loss represents 28.31% of last year's net profit.
Regarding this massive loss, Shengyuan Environmental Protection stated that by obtaining complete product asset valuation statements, account transaction details, daily NAV sequence lists, and custodian account flow statements from the fund manager and custodian, preliminary results indicate the following: During its operation, the fund manager engaged in illegal activities including unauthorized trading, violations of information disclosure obligations, and even falsification of fund net asset value information. The fund custodian violated regulations by failing to perform its supervisory and verification duties, leading to significant losses for the investor, Xiamen Jinlingji. Currently, Shengyuan Environmental Protection has reported the case to public security authorities, which has been accepted, and has also filed a report with the Shenzhen Bureau of the China Securities Regulatory Commission, receiving proof of material receipt. Additionally, the company stated it has engaged lawyers to take corresponding legal actions regarding this matter and intends to initiate litigation or arbitration against the fund manager, Shenbo Xintou, and the fund custodian, China Merchants Securities (CMSC). Simultaneously, to prevent minority shareholders from bearing the losses, on December 27, Shengyuan Environmental Protection received a letter of commitment from its controlling shareholder and actual controller, Zhu Yuxuan and Zhu Hengbing. To maximize the protection of the company and shareholder interests, the two committed to providing advance compensation for the principal loss of the aforementioned fund investment. The final compensation amount will be the difference between the company's initial investment principal and the sum of the redemption amount received for the fund at that time and all funds actually recovered after the company takes relevant measures.
Although Shengyuan Environmental Protection's major shareholders have demonstrated a sense of responsibility, penalties are still warranted, particularly for the company's serious lack of timeliness in information disclosure. Consequently, on December 27, the Xiamen Securities Regulatory Bureau, which has jurisdiction over the company, issued a warning letter to the company, while the Shenzhen Stock Exchange's Growth Enterprise Market Department issued a regulatory letter to the company. The warning letter indicated that upon investigation, the private fund product subscribed to by Shengyuan Environmental Protection's subsidiary, Xiamen Jinlingji, suffered significant losses. The company failed to disclose this information promptly after becoming aware of it, delaying disclosure until the evening of December 26. Zhu Yuxuan, as Chairman of Shengyuan Environmental Protection, Zhu Hengbing, as the company's General Manager, and Chen Wenyu, as the company's Board Secretary, failed to fulfill their diligent and dutiful obligations as required and bear primary responsibility for the company's aforementioned regulatory violations. According to relevant regulations, the Xiamen Securities Regulatory Bureau decided to take supervisory measures by issuing warning letters to Shengyuan Environmental Protection, Zhu Yuxuan, Zhu Hengbing, and Chen Wenyu, and will record the relevant circumstances in the integrity档案. Information shows that Shengyuan Environmental Protection was established in 1997 and listed on the Growth Enterprise Market on August 24, 2020. The company's main businesses include waste incineration and sewage treatment. In terms of performance, the company's operating revenue has maintained low growth since listing, while net profit has experienced significant fluctuations. As of the market close on December 26, Shengyuan Environmental Protection's market capitalization was 5.351 billion yuan. As of December 19, the number of company shareholders was approximately 24,700.
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