China Railway Assembly Faces CSRC Probe, Cites Pre-Change Business

September 18 — China Railway Assembly Co., Ltd. issued an announcement stating that, following an internal self-inspection, the case filed against the company may involve related businesses conducted prior to the change of its actual controller. Since the change of control, the company has ceased such business activities in accordance with relevant regulations.

The company has not yet received the final investigation conclusion from the China Securities Regulatory Commission (CSRC), and the ultimate outcome will be subject to the CSRC's official findings. The company confirmed that its production and operational activities are proceeding normally, and it will actively cooperate with the CSRC's investigation while strictly fulfilling its information disclosure obligations.

Key Context: Pre-Change Business Under Scrutiny

The most notable aspect of the case filing is the company's proactive clarification that it "may involve related businesses conducted prior to the change of its actual controller." This suggests that regulatory inquiries may focus on matters predating the company's incorporation into China Railway Group Limited's public disclosures.

Corporate History

According to publicly available information:

• Former identity: Beijing Hengtong Innovation Sai Mu Technology Co., Ltd. (stock abbreviation: "Hengtong Technology")
• Listing: ChiNext board of the Shenzhen Stock Exchange in 2015
• Original actual controller: Sun Zhiqiang
• Main business: New wall materials, building structural materials, and prefabricated construction products such as integrated houses

Change of Control

• May 2019: Sun Zhiqiang and Chenguang Jingtai signed a Share Transfer Agreement with China Railway Group Limited, transferring approximately 26.51% of shares at RMB 12 per share. Sun Zhiqiang also irrevocably waived voting rights for his remaining approximately 30.62% of shares.
• July 2020: Equity transfer completed, making China Railway Group Limited the controlling shareholder and the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) the actual controller.
• August 2020: Company renamed to "China Railway Prefabricated Building Co., Ltd.," stock abbreviation changed from "Hengtong Technology" to "China Railway Assembly."
• December 2021: Internal transfers within the China Railway system resulted in China Railway Construction Engineering Group Co., Ltd. directly holding 26.51% of shares, a stake maintained to date.

Current Positioning

In its semi-annual report for 2026, the company confirmed no change in actual controller during the reporting period. The so-called "pre-change businesses" refer to activities conducted by the former Hengtong Technology team before central state-owned enterprise (SOE) control in 2020. By emphasizing that "such businesses have been stopped in accordance with relevant regulations after the change," the company aims to distance itself from historical issues.

Under central SOE ownership, the company is positioned as the prefabricated construction industry platform under China Railway Group Limited, focusing on two major segments:

• Intelligent manufacturing
• Smart construction

The company aims to build a full industrial chain for prefabricated construction integrating R&D, manufacturing, construction, and operation & maintenance. It is one of the first batch of "National Prefabricated Construction Industry Bases" designated by the Ministry of Housing and Urban-Rural Development.

Financial Performance

Profitability has not improved significantly since joining the central SOE system:

| Year | Operating Revenue | Net Loss (Attributable to Parent) | |------|-------------------|-----------------------------------| | 2023 | RMB 1.496 billion | RMB 163 million | | 2024 | RMB 1.901 billion (+27.07% YoY) | RMB 63.7169 million (~60% reduction) | | 2025 | RMB 1.921 billion | RMB 121 million | | H1 2026 | RMB 882 million (+1.28% YoY) | RMB 48.6652 million (vs. RMB 36.9691 million in H1 2025) |

Market Data

As of market close on September 18, China Railway Assembly's stock price stood at RMB 10.70, with a total market capitalization of approximately RMB 2.631 billion.

Regulatory Implications

It is worth noting that the entity subject to the case filing is the listed company itself, rather than its controlling shareholder or historical shareholders. Although the company attributes the issue to "historical businesses," under the Securities Law and relevant regulatory rules, the listed company remains the primary responsible party for information disclosure and must bear responsibility for the truthfulness, accuracy, and completeness of relevant disclosure documents.

(Source: The Paper)