Rongbay stated in response that the figure of “RMB 120 billion” was based on the company’s own estimate derived from a supply volume of 3.05 million tons.
On January 18, Rongbay Technology was formally placed under investigation by the China Securities Regulatory Commission (CSRC) for allegedly making misleading statements in its announcement regarding a RMB 120 billion procurement contract with CATL.
First, let’s briefly review this announcement “misstep.”
On the afternoon of January 14, Rongbay announced that it had signed a ” LFP Cathode Material Procurement Cooperation Agreement” with CATL. The agreement stipulated the supply of approximately 3.05 million tons of LFP cathode materials for the domestic market from the first quarter of 2026 to 2031, with the total estimated contract value exceeding RMB 120 billion.
This figure set a record for order value within the lithium battery industry.
On the same day as the announcement, Rongbay received an inquiry letter from the Shanghai Stock Exchange (SSE). The exchange demanded verification regarding the accuracy of the information disclosure, the binding nature of the agreement, and whether any insider trading was involved.
The SSE required Rongbay to provide a written reply within one trading day. Citing the need to “ensure the accuracy and completeness of the reply content,” Rongbay announced two consecutive delays. During this period, trading of its shares was suspended starting January 14, fueling ongoing market speculation.
The situation developed on January 18. On the same day the CSRC announced its investigation, Rongbay finally issued its reply announcement. It acknowledged the core point of contention: the agreement did not specify a concrete procurement value. The cited “RMB 120 billion” was the company’s own estimate based on the 3.05-million-ton supply volume. The final sales amount would depend on raw material prices and quantities at the time of actual orders, carrying significant uncertainty.
Simultaneously, Rongbay stated that it had no motive to hype its stock price using a large contract.
That evening, the CSRC website reported that due to suspected misleading statements in the major contract announcement, the company had been placed under investigation and would be dealt with according to law.
Regulatory intervention indicates that the information disclosure lapses have crossed a red line:
First, there was ambiguity in characterizing the amount. Authorities stated that the original announcement’s phrasing—”total contract sales value exceeds 120 billion yuan”—failed to clarify it was an estimate or highlight its uncertainty, making it highly likely to be misunderstood by investors as a firm contract value.
Second, there was a lack of adequate risk warnings. Regulatory analysis of the reply shows the agreement only specified the supply scope and period, without locking in core terms like purchase volume and price, meaning actual fulfillment faces major variables. However, the original announcement only mentioned “risks” generally at the end, failing to provide sufficient warning about the uncertainty of the estimated amount, violating the principle of completeness in information disclosure.
It is noteworthy that after the announcement on January 13, the company’s stock price rose nearly 15% that day, with trading volume surging, indicating many investors made trading decisions based on the “120 billion” information. Now with the information reversed, the company may face risks of investor compensation claims.
As the other party to the contract, CATL has not yet responded to this matter.
Discover more from ChinaEVHome
Subscribe to get the latest posts sent to your email.
