Limit-Up Analysis for Dingxin Communication (603421): First Board Driven by Negative News Fully Priced In and Sector Spillover Effect

Item	Details
Stock Name	Dingxin Communication
Stock Code	603421
Sector	Communication Services / Power Grid Equipment
Limit-Up Date	January 20, 2026
Limit-Up Price	RMB 7.92[1]
Turnover	RMB 29.61 million[1]
Consecutive Limit-Up Status	First Board[1]
Total Market Capitalization	Approximately RMB 4.8-5.1 billion[2][3]

Dingxin Communication released its

after market close on January 19, 2026, expecting a net profit attributable to shareholders of [4]. However, the stock price hit a limit-up after the announcement, a “negative news priced in” trend not uncommon in the A-share market. The main reasons include: the expectation of losses had already been fully digested previously, the main causes of the loss are clear (restrictions from State Grid’s blacklist + impact of being barred from the China Southern Power Grid market)[4], and the market has already priced in the worst-case scenario.

Yuan Zhishuang, Director and Deputy General Manager of the company, was placed under regulatory investigation by the China Securities Regulatory Commission (CSRC) on January 16, 2026, on suspicion of short-term trading of the company’s shares[5]. Notably, the company clearly stated in its announcement that this matter is an

and will not have a material impact on the company’s daily operations[5]. Yuan Zhishuang had reduced his holdings by 610,000 shares on November 28, 2025 and [4]. With this negative news resolved, selling pressure has eased.

On January 20, 2026, the

performed strongly overall, becoming a concentration of limit-up stocks that day[1]:

Stock Code	Stock Name	Consecutive Limit-Ups
002358	Senyuan Electric	3 Consecutive Boards
002498	Han Cable Co., Ltd.	3 Consecutive Boards
601616	Broadcast and TV Electric	3 Consecutive Boards
002546	Xilian Electronics	2 Consecutive Boards
603421	Dingxin Communication	First Board

The upward momentum of the sector spread to Dingxin Communication.

Dingxin Communication hit limit-up multiple times in September 2025 due to statements about its cooperation with

(even achieving two consecutive limit-ups)[6]. Although the company later clarified that it had no connection to AI chips, its history as a “meme stock” makes it easy to attract short-term capital attention.

According to data from Eastmoney.com[3]:

Indicator	Value
Opening Price	RMB 7.34
Previous Closing Price	RMB 7.27
Highest Price	RMB 7.59
Lowest Price	RMB 7.24
Limit-Up Price	RMB 8.00
Turnover Rate	3.53%
Volume Ratio	1.21
Outside Orders (Shares Bought on Ask)	127,100
Inside Orders (Shares Sold on Bid)	103,000

: Lower opening followed by a rally to close at limit-up, presenting a typical “weak-to-strong” pattern.

Trading volume reached 230,000 lots, slightly higher than the recent average (volume ratio 1.21)[3].

(127,100 vs. 103,000), indicating strong active buying interest. Turnover was approximately RMB 170 million, representing for a small-to-mid cap stock.

1. Sector Momentum
   : Multiple stocks in the power grid equipment sector hit limit-up on the day, reflecting buoyant market sentiment[1]
2. Technical Pattern
   : Lower opening followed by a limit-up close, indicating that major funds are
   buying against the trend
3. Declining Number of Shareholders
   : As of January 10, 2026, the number of shareholders was 31,363, a decrease of 843 (-2.62%) from the previous period[3], suggesting that shares are becoming more concentrated

1. Fundamental Pressure
   : 2025 revenue was RMB 1.066 billion, down 52.71% year-on-year[3]; net loss was RMB 336 million, a year-on-year decrease of 1082.52%[3]; dynamic P/E ratio is -10.82 (loss-making)[3]
2. Negative News
   :
   Executive under investigation for short-term trading
   [5],
   securities compensation litigation
   ongoing[4], received a CSRC “Administrative Penalty Decision” in May 2024[4], and the controlling shareholder structure changed from “dual-core” to “single-core”, leading to changes in corporate governance[6]
3. Executive and Shareholder Share Reductions
   : Yuan Zhishuang terminated his share reduction plan after reducing holdings by 610,000 shares[4]; Wang Tianyu reduced holdings by 1.3228 million shares, with his shareholding ratio dropping from 6.14% to 5.94%[3][4]; Fan Jianhua reduced holdings by approximately 2 million shares in total, realizing RMB 15.83 million in proceeds[6]

Risk Type	Details
Fundamental Risk	Sustained losses, sharp revenue decline, blacklisted by major power grid operators
Governance Risk	Executive under investigation for short-term trading, change in controlling shareholder
Legal Risk	Securities misrepresentation litigation ongoing
Delisting Risk	Sustained losses may trigger financial delisting risk warnings
Manipulation Risk	Historical record of regulatory warnings for “hot topic chasing”

1. Authenticity of Performance
   : 2025 expected loss of RMB 540-640 million; investors should pay attention to the final annual report data
2. Recovery Progress of Power Grid Business
   : Eligibility for China Southern Power Grid has been restored, but the State Grid blacklist remains in effect until February 2026
3. Progress of Energy Storage Business
   : The company stated that its new-generation flow battery energy storage products are expected to enter mass production in the second half of 2026
4. Litigation Progress
   : Substantial progress has been made in investor compensation cases, which may affect the company’s cash flow

Scenario	Conditions	Trend Outlook
Optimistic	Gradual recovery of power grid business + breakthroughs in energy storage business + improved market sentiment	May test the previous high range of RMB 9-10
Neutral	Fundamentals remain unchanged + sector rotation	Consolidation in the range of RMB 7-8
Pessimistic	Further deterioration of performance + unexpected litigation compensation	May retest the support level of RMB 6-6.5

Type	Price	Explanation
Resistance Level	RMB 8.00	Limit-up price; a breakout confirms strength
Resistance Level	RMB 8.50	Upper edge of the previous consolidation platform
Support Level	RMB 7.30	Near the 20-day moving average
Strong Support Level	RMB 6.54	Limit-down price

1. Short-Term Traders
   : If the stock can hold above RMB 7.9-8.0, consider light-position speculative bets; stop loss if it breaks below RMB 7.3
2. Long-to-Medium-Term Investors
   :
   Not recommended to participate
   — no signals of substantial improvement in fundamentals
3. Risk-Tolerant Investors
   : Need to closely track the recovery progress of the power grid business and the implementation of the energy storage business

The limit-up of Dingxin Communication (603421) on January 20, 2026

, but by a combination of multiple factors: negative news being fully priced in (expected loss + resolution of the executive’s investigation), sector momentum (strong performance of the power grid equipment sector), its history as a meme stock (previous limit-ups driven by hot topics), and technical rebound (weak-to-strong pattern of lower opening and higher closing).

: This is a typical case of , with no substantial changes in fundamentals. Given the company’s multiple risks including sustained losses, an executive’s regulatory investigation, and securities litigation, investors should and avoid chasing the rally.