China’s securities regulator has escalated its probe into Qingyue Technology, a leading domestic supplier of electronic‑paper (e‑paper) modules, freezing multiple securities and bank accounts and placing the company on the brink of an existential test. The China Securities Regulatory Commission (CSRC) has opened a formal case into alleged false statements in periodic reports; three securities accounts holding some 1.6313 million shares and seven bank accounts designated as fundraising special accounts—containing 134 million yuan of raised capital—have been frozen. The freeze prevents transfers, pledges or non‑trading transfers of the frozen securities and funds, although بيع from the frozen securities accounts is reportedly permitted, a measure designed to block covert asset relocations while allowing market‑based dispositions.
For Qingyue the timing is acute. Once hailed as a sector leader in e‑paper modules used in smart home devices, wearables, industrial controls and medical equipment, the company’s finances have been under strain: operating cash flow was negative 40.7 million yuan as of Q3 2025 and cash on hand stood at 164 million yuan. Qingyue’s top‑line has oscillated—after a sharp revenue drop in 2023 it recovered modestly in 2024—yet the firm remains unprofitable and guidance for 2025 points to a deeper full‑year loss. Management has told investors that ordinary production and operations should not be materially disrupted by the freezes, but the practical constraint on fundraising accounts and the reputational damage could complicate supplier, customer and lender relationships.
The investigation is not the first regulatory blemish for Qingyue. In August 2025 the Jiangsu securities regulator issued a warning over irregular use of fundraising proceeds, undisclosed related‑party transactions and improper accounting for a CTP+OLED trade business, including a retrospective correction that reduced 2023 quarterly revenue and cost figures by about 13.67 million yuan. More troubling is a 2023 export‑tax rebate dispute: tax authorities reclaimed 44.42 million yuan in rebates, a sum that, if interpreted through the standard 13% rebate rate, implies export volumes far larger than Qingyue’s reported overseas revenue in prior years. An independent director previously registered reservations about the rebate, and the contradiction between rebate claims and published foreign sales figures remains a central red flag.
The CSRC’s warning to investors makes clear that should the probe substantiate facts amounting to the ‘major illegal forced delisting’ criteria set by the Shanghai Stock Exchange’s STAR Market rules, Qingyue’s shares could face compulsory delisting. That is a severe outcome: beyond wiping out equity holders, it would mark an abrupt end to Qingyue’s access to public capital and raise the prospect of creditor actions or bankruptcy proceedings. Market participants earlier treated the CSRC’s opening of the case as a procedural move, but the targeted freezes and cross‑agency tax recovery suggest a more substantive inquiry.
This episode highlights two broader trends. First, enforcement intensity by Chinese regulators has remained elevated as authorities tighten rules on disclosures, related‑party transactions and the use of raised funds, aiming to shore up investor confidence in the post‑crackdown market. Second, it underscores structural pressures in the global e‑paper market: aggregating soft demand, intense price competition among module suppliers and technology shifts have squeezed margins, encouraging some firms to rely more heavily on financial engineering or aggressive accounting to show revenue stability. For Qingyue, both regulatory scrutiny and market weakness compound to create a high‑risk scenario.
Short‑term outcomes for Qingyue range from regulatory fines and governance remediation through negotiated settlements with tax and securities authorities, to far darker possibilities such as forced delisting or insolvency if misconduct is proved and capital cannot be replenished. For suppliers and customers in the e‑paper ecosystem, the development injects uncertainty: manufacturers that rely on Qingyue for modules may begin dual‑sourcing or pressing for tightened contractual protections. Investors in small‑cap Chinese tech names will watch closely; the CSRC’s approach could become a template for pursuing other companies with similar accounting anomalies or rebate discrepancies.
Internationally, the case matters because e‑paper components are embedded in devices that cross borders—e‑readers, smart labels and certain wearable displays—so supply‑chain disruptions could ripple to foreign OEMs that source from Chinese vendors. More broadly, the Qingyue affair is a reminder that corporate governance lapses and cross‑agency enforcement in China can abruptly alter the fortunes of sector leaders, exposing investors and global partners to sudden operational and financial risk.