Analysis of the Impact of Rongbai Technology's Regulatory Investigation on Its Bond Ratings

Rongbai Technology (Stock Code: 688005) received the “Notice of Case Filing” issued by the China Securities Regulatory Commission (CSRC) on January 18, 2026, and was placed under regulatory investigation by the CSRC for illegal acts such as suspected misleading statements in the company’s major contract announcement[1][2]. The trigger for this incident was the “Procurement Cooperation Agreement for Lithium Iron Phosphate (LFP) Cathode Materials” that Rongbai Technology disclosed on January 13, 2026, with Contemporary Amperex Technology Co., Limited (CATL). The agreement stipulates that from the first quarter of 2026 to 2031, Rongbai Technology will supply approximately 3.05 million tons of LFP cathode materials to CATL, with a total sales value exceeding RMB 120 billion[1][2].

1. Increased Credit Concerns Due to Risks of Information Disclosure Violations
   • Rongbai Technology’s disclosure of the “RMB 120 billion total contract value” in its announcement was deemed imprecise by the Shanghai Stock Exchange (SSE). In fact, this amount was estimated by the company, and the final sales scale will be determined based on raw material prices and quantities at the time of actual order signing, making the sales amount uncertain[1][3]
   • The company admitted in its response to the SSE’s inquiry letter that the original announcement did not provide sufficient risk warnings regarding potential outcomes after the agreement was signed, and some expressions were not standardized[2]
   • According to relevant provisions of the Securities Law of the People’s Republic of China, after a listed company is placed under regulatory investigation on suspicion of misleading statements, it may face administrative penalties such as being ordered to make corrections, given a warning, or fined; the directly responsible persons in charge and other directly responsible persons may also be given warnings or fined, and in serious cases, may be subject to market entry bans[2]

2. Doubts About Performance Capabilities Affect Debt Repayment Credit
   • Rongbai Technology currently has an annual production capacity of only 60,000 tons of LFP cathode materials, while the agreement with CATL requires an average annual supply of over 600,000 tons, resulting in a significant capacity gap[3]
   • As of September 30, 2025, the company’s monetary funds were RMB 3.241 billion and tradable financial assets were RMB 1.350 billion, while expected capital expenditures for the next three years are approximately RMB 8.7 billion, creating substantial financial pressure[3]
   • The company expects a net loss attributable to shareholders of the parent company of RMB 150 million to RMB 190 million for the full year of 2025, putting pressure on its profitability[4]

According to general credit rating principles, Rongbai Technology’s regulatory investigation may impact its bond ratings in the following aspects:

It is worth noting that this is not the first time Rongbai Technology has been subject to regulatory measures due to violations[2]:

• April 2020
  : Due to information disclosure violations during its STAR Market IPO, it was subject to an administrative regulatory measure by the CSRC that “no public offering securities-related documents from the issuer will be accepted within 1 year”
• May 2021
  : Suspected of leaking inside information during investor communication activities, the company’s Chairman Bai Houshan and then Secretary of the Board Zhang Yuan were subject to administrative regulatory measures of being issued a warning letter

Multiple violation records may be regarded as adverse factors indicating deterioration in credit quality in bond rating assessments.

Rongbai Technology’s regulatory investigation poses significant negative pressure on its bond ratings. The main manifestations are:

1. Short-term impact
   : During the regulatory investigation period, the company’s refinancing capabilities may be restricted, and bond issuance costs may rise
2. Medium-term impact
   : If the investigation results show serious information disclosure violations, it may trigger a bondholder meeting, leading to unfavorable adjustments to bond terms
3. Long-term impact
   : The company’s corporate governance credit is damaged, which may affect its long-term financing capabilities in the bond market

Given that Rongbai Technology is currently under regulatory investigation and the final administrative penalty result is not yet clear, the actual adjustment range of bond ratings will depend on:

• The CSRC’s investigation conclusion and penalty intensity
• The effectiveness of the company’s subsequent rectification measures
• Whether the company’s operating performance can achieve substantial improvement
• Changes in bondholders’ risk tolerance

It is recommended that bond investors closely follow the CSRC’s subsequent investigation results and the company’s rectification announcements to assess changes in the credit risk of relevant bonds.

[1] China Energy News Network - “Rongbai Technology Placed Under CSRC Investigation” (https://www.cpnn.com.cn/news/hy/202601/t20260119_1860707.html)

[2] Securities Times - “Rongbai Technology Placed Under Investigation: The Whole Story of the ‘RMB 120 Billion Order’ Touching the Compliance Red Line” (https://www.stcn.com/article/detail/3601217.html)

[3] Time Finance - “Procurement Amount is Estimated, Core Production Line in Xinren, Guizhou Hurries to Recruit Workers” (https://cn.investing.com/news/stock-market-news/article-3169106)

[4] Wall Street CN - “Wall Street CN Breakfast FM-Radio | January 19, 2026” (https://wallstreetcn.com/articles/3763512)