Asia Cuanon Technology Shanghai Co Ltd Faces Legal Challenges

Asia Cuanon Technology (Shanghai) Co., Ltd., a prominent player in the materials sector specializing in heat preservation and decoration products, has encountered significant legal hurdles. The company, listed on the Shanghai Stock Exchange, has seen its shares frozen due to legal actions against its controlling shareholders.

On May 19, 2025, Asia Cuanon Technology announced that the shares held by its controlling shareholder, Shanghai Cuanon Investment Co., Ltd., and its actual controller, Li Jinzhong, along with their affiliated entity, Shanghai Runhe Contract Investment Co., Ltd., have been frozen by judicial authorities. The shares affected amount to 78,655,500, 20,295,000, and 41,629,500, respectively, representing 18.35%, 4.74%, and 9.71% of the company’s total shares.

Additionally, the company disclosed that 749,000 shares bought back for repurchase purposes have also been frozen. The reasons behind these legal actions remain unclear, as stated in the company’s announcements.

Despite these challenges, Asia Cuanon Technology’s financial performance in the first twelve months of 2024 showed a strong reliance on its core business, with 92.81% of its revenue coming from construction energy-saving insulation and decoration materials.

The legal issues have raised concerns among investors, reflected in the company’s stock performance. On May 19, 2025, the company’s shares closed at 6.86 CNH, marking a significant increase from the previous day’s close of 6.24 CNH. This surge in stock price occurred amidst broader market movements, with the Shanghai Composite Index closing above its six-month average.

The company’s market capitalization stands at 2.69 billion CNH, with a negative price-to-earnings ratio of -7.87, indicating potential investor skepticism about its profitability.

As Asia Cuanon Technology navigates these legal challenges, the impact on its operations and financial health remains to be seen. Investors and stakeholders are closely monitoring the situation for further developments.