Analysis of the Impact of Ganfeng Lithium (01772.HK) Alleged Insider Trading Case

As a leading lithium mining enterprise [0], Ganfeng Lithium (01772.HK) became a hot stock mainly because it announced on the evening of December 29, 2025 that it had received a prosecution transfer notice from the Yichun Municipal Public Security Bureau and was transferred to the procuratorate for review and prosecution on suspicion of unit crime of insider trading [1][2]. This event is a follow-up judicial procedure to the administrative penalty case by the Jiangxi Securities Regulatory Bureau in July 2024, involving insider trading during the cooperation negotiations with Jiangte Motor in 2020 [2].
In terms of price and trading volume, on December 30, 2025, it opened 5.7% lower, with an intraday low of about HK$53.30, then the decline narrowed, and closed at HK$54.8 in the half-day trading (flat) [3]. The short selling amount on that day was about HK$65.9 million, the short selling ratio reached 9.966%, and the trading volume was significantly higher than the daily average [3].

1. Significant Impact of Judicial Procedure Upgrade
   : The upgrade from administrative punishment to judicial prosecution has intensified market concerns [1][2].
2. Strong Bearish Sentiment Among Institutions
   : A short selling ratio of nearly 10% indicates that institutional investors are cautious about the subsequent impact of the event [3].
3. Superimposed Industry and Financial Pressures
   : Currently, lithium prices remain sluggish for a long time (lithium carbonate prices maintained a low level of 70,000-85,000 yuan/ton in 2025), and the industry has structural oversupply [4]. At the same time, the company’s inventory at the end of the third quarter reached 10.348 billion yuan, interest-bearing liabilities were 37.7 billion yuan, and the asset-liability ratio was about 57.59% [4]. Under multiple pressures, the company faces major challenges.

1. Main Risk Points
   :
   • Legal Risk: The judicial procedure for suspected insider trading is still ongoing, which may lead to further legal consequences [1][2].
   • Industry Risk: Sustained sluggish lithium prices lead to decreased profitability [4].
   • Financial Risk: High inventory has a risk of price decline, and high liabilities bring financial pressure [4].
2. Opportunity Window
   :
   • If the judicial procedure progresses smoothly or lithium prices rebound, it may bring an opportunity for valuation repair [0].

The event where Ganfeng Lithium (01772.HK) was transferred for review and prosecution on suspicion of unit crime of insider trading has attracted market attention, leading to a sharp drop in stock price at opening followed by a narrowed decline, with active institutional short selling. This event is a follow-up judicial procedure to the 2024 administrative penalty case. Combined with industry and financial pressures, the company faces multiple challenges. Investors need to pay attention to the price changes at the support level of HK$53.30 and resistance level of HK$54.80 [3].