Zhite New Material Surges 198% and Suspends Trading for Verification: Warning of Bubble Risk

Zhite New Material delivered an eye-catching performance at the start of 2026, becoming the first stock to double in value and the best-performing A-share stock year-to-date. From January 5 to January 12, 2026, it recorded six consecutive 20% daily limit-ups, with a cumulative surge of 198.57%[1][2][3]. This extreme performance ranked it first on the gainers list, far outpacing Shaoyang Hydraulics (121.89%) and Zhongcheng Technology (85.71%), which followed in second and third place[2]. On the evening of January 12, the company released an announcement on unusual stock price movements and suspension for verification, stating that trading would be suspended starting January 13, with the suspension expected to last no more than 3 trading days[1][2][3].

From a technical perspective, the stock price started at around RMB 8-9 in early December 2025 and soared to an all-time high of RMB 33.38 before the suspension. The current price is 2.4 times the 20-day moving average (RMB 13.80), severely deviating from the short-term moving average system and showing a typical extreme overbought condition[0]. Trading volume expanded significantly during this period, with active turnover, leaving clear traces of capital speculation.

Despite the market linking Zhite New Material to hot concepts such as commercial aerospace, AI, robotics, and quantum technology for speculative purposes, the company has issued explicit clarifications multiple times[4][5]. The company stated that its main business has not changed since its listing, and its current operations do not involve the commercial aerospace sector. The fireproof and thermal insulation material product it is collaborating on is still in the laboratory R&D and optimization stage, has not yet met mass production conditions, and has not generated related operating revenue[1][4]. The company also confirmed that there are no undisclosed material matters, changes in main business, major changes in operating environment, or stock trading by controlling shareholders that should be disclosed[1][2][3].

Notably, on the evening of January 12, more than 20 listed companies released intensive announcements on unusual stock price movements or risk warnings, half of which explicitly stated that they are not involved in commercial aerospace-related businesses[5]. This “pass the parcel” speculative characteristic of concept stocks is particularly evident in the commercial aerospace sector, where the P/E ratios of some companies have severely deviated from fundamentals.

Zhite New Material’s main business is aluminum alloy products for construction such as aluminum formwork, protective platforms, and prefabricated components, which belongs to the traditional metal products industry. It achieved a net profit attributable to shareholders of RMB 118 million in the first three quarters of 2025[0][2]. However, its current valuation is severely bubbly: the rolling P/E ratio is 104x, nearly 2.8 times the industry average (37.24x); the P/B ratio is 6.46x, more than twice the industry average (3.08x)[1][3]. This valuation level indicates that market expectations have already discounted years of future performance growth, while the company’s fundamentals have not undergone any substantive changes.

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. The company took the initiative to apply for a trading suspension for verification instead of allowing the stock price to continue rising, reflecting that the management believes the current stock price has severely deviated from a reasonable range. This stands in stark contrast to previous cases where management remained silent after sharp surges, suggesting the company may face significant compliance and investor relations pressures.

. The market has hyped a traditional building materials stock to sky-high prices entirely based on concept expectations rather than performance improvement. The company clearly stated that the fireproof and thermal insulation material is still in the R&D stage and cannot contribute to revenue in the short term, a revelation that exposes the illusory nature of concept speculation. Investors need to be vigilant about the risk of being the “bag holder” in this “pass the parcel” game.

. Recently, multiple meme stocks have received intensive risk warnings, and the commercial aerospace sector as a whole has accumulated significant pullback pressure[5]. Zhite New Material’s suspension for verification is one of the regulators’ warnings against excessive speculation, indicating that the concept speculation ecosystem may face adjustments.

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Risk Type	Risk Level	Details
Valuation Regression Risk	🔴 Extremely High	104x P/E ratio is far above the industry average of 37x, with valuation having discounted 3-5 years of future performance
Concept Falsification Risk	🔴 Extremely High	The commercial aerospace and other concepts hyped by the market have been explicitly denied by the company
Post-Suspension Pullback Risk	🔴 High	A sharp pullback may occur after trading resumes if no irregularities are found in the verification
Capital Flight Risk	🟠 Medium-High	Mainstream capital may quickly take profits after trading resumes

Under the current circumstances,

. The stock’s rise is driven entirely by market sentiment and capital, lacking any fundamental support. Even if we consider the company’s potential future foray into the new materials sector, the fireproof and thermal insulation material will take a long time to move from R&D to mass production and then to contributing significant revenue, and the current valuation is completely detached from a reasonable range.

For risk-seeking investors, if the stock experiences a sharp pullback to the RMB 15-18 range (close to the industry average valuation level) after trading resumes, they may consider participating in a rebound with an extremely light position, but must strictly set a stop-loss. Retail investors should stay away from such speculative hype and wait for market sentiment to stabilize and valuations to return to a reasonable range before evaluating investment value.

During the suspension period (expected to last no more than 3 trading days), market sentiment may continue to ferment, and there is significant uncertainty about the stock’s performance after trading resumes[1]. If the verification results show no irregularities, a pullback may occur; if the market remains enthusiastic about concept speculation, the stock may rise briefly before falling back quickly. In either scenario, the risk-reward ratio of participating at the current price is extremely unfavorable.

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Zhite New Material’s sharp surge is a

, lacking any fundamental support. The company’s main business is traditional and clear, and it is not involved in the hotly hyped commercial aerospace concept. The fireproof and thermal insulation material is still in the R&D stage and cannot contribute substantive revenue in the short term. The current 104x P/E ratio and 6.46x P/B ratio are far above the industry average, and the valuation is severely bubbly. The company took the initiative to apply for a trading suspension for verification and issued multiple risk warnings, with management sending a clear “cooling down” signal.

From an investment decision-making perspective, this stock is not currently a value investment target. The extreme overbought technical condition, severely deviated valuation level, multiple risk warnings from the company, and the background of tightening regulation together constitute a high-level risk warning. Investors should fully recognize the risk of being the “final bag holder” in this “pass the parcel” game and avoid being the last to take over. For existing investors, it is recommended to reduce positions opportunistically after trading resumes; for off-market investors, it is recommended to remain on the sidelines or wait for valuations to return to a reasonable range before conducting an evaluation.

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• [0]
  Jinling Analysis Database: Market price data, technical indicators, corporate financial data
• [1]
  Sina Finance: “Surged Nearly 200%! The Best-Performing Stock of 2026 Suspends Trading Immediately! Plus Announcements from 3 Other Top Gainers”
• [2]
  Securities Times Network: “Surged Nearly 200%! 300986 Suspends Trading for Verification! Announcements from 3 A-Share Stocks”
• [3]
  Cailian Press: “Six Consecutive 20% Daily Limit-Ups, This Year’s Best-Performing Stock Suspends Trading for Verification Tomorrow”
• [4]
  Sina Finance: “300986, Four Consecutive 20% Daily Limit-Ups! Inflection Point for the Hydrogen Energy Industry is Approaching”
• [5]
  China Business Network: “Commercial Aerospace Sector Surges 90%, Who’s Playing ‘Pass the Parcel’? Concept Stocks Release Intensive Announcements to ‘Cool Down’”