The CEO and the Compliance Director have both received warning letters. Zhongshan Securities' brokerage business has triple violations and is awaiting to overcome the difficulties.

Cailian Press, February 28 — (Reporter Gao Yanyun) The troubled Zhongshan Securities faces new compliance challenges.

On February 27, the Shenzhen Securities Regulatory Bureau issued three penalty notices in quick succession, and Luo Yong, the then responsible senior for brokerage business, and Compliance Director Jiang Chengjun, received warning letters. Luo Yong is currently the President of Zhongshan Securities.

The penalties directly target core violations in the company’s brokerage operations. Zhongshan Securities mainly faces three major issues: weak management of branches and staff during business development, unstandardized marketing and publicity, and inadequate control over marketing collaborations with third-party internet platforms. Luo Yong and Jiang Chengjun are responsible for these violations.

This brokerage penalty again exposes the deep-rooted governance issues at Zhongshan Securities. With unstable shareholder equity, high capital pressures, and a management team that has been firefighting for years without fixing internal control flaws, the company’s performance diverges from industry norms. Its compliance lapses and ownership struggles are intertwined, forming the core obstacles preventing the firm from breaking through.

Both President and Compliance Director Penalized

Luo Yong and Jiang Chengjun are both senior executives of Zhongshan Securities.

According to the company’s official website, Luo Yong is currently a director and President, while Jiang Chengjun is a member of the Management Committee and Compliance Director.

Luo Yong has nearly 21 years of experience. His public resume shows he was born in January 1979, and has held positions such as director, secretary of the board, and head of the Management Committee at Zhongshan Securities. In June 2022, he was appointed President.

His career began at Dongguan Securities, where he served as project manager in the Asset Management and Investment Management Departments, and later was promoted to Deputy Director of the Board Office, Secretary of the Board, and General Manager of the Shenzhen branch.

Public records from the China Securities Association show Luo Yong started practicing at Dongguan Securities on December 2, 2004, and resigned and deregistered on October 30, 2019. Nearly a year later, on October 20, 2020, he began practicing at Zhongshan Securities.

Jiang Chengjun has over 17 years of experience. Public records indicate he registered with Great Wall Securities on July 15, 2008, and resigned on May 5, 2022. He began practicing at Zhongshan Securities on February 6, 2023.

According to YiDong Data, since 2022, Zhongshan Securities has received 19 penalty notices, with an increasing trend year over year: 2 in 2022, 3 in 2023, 6 in 2024, and 5 in the first two months of 2026, with 3 additional penalties already issued.

Currently, Zhongshan Securities remains mired in unstable ownership, internal control deficiencies, and performance pressures—issues that are deeply interconnected. The ownership turmoil is the root cause of all these problems.

Trouble One: Unresolved Shareholder Pressure and Debt Burdens

As the controlling shareholder, Jinlong Co., Ltd., faces debt pressures and asset disposal actions, Zhongshan Securities’ fate is directly affected, keeping its ownership unstable for a long time. To ease debt burdens, Jinlong has repeatedly planned to sell its securities subsidiaries, including Zhongshan Securities.

In June 2024, Jinlong’s board approved a plan to transfer all 67.78% of Zhongshan Securities’ shares it held, but in May 2025, the plan was terminated to avoid the risk of the main assets being cash or lacking operational business.

Besides Zhongshan Securities, Jinlong also initiated a 20% stake transfer of Dongguan Securities in September 2024, completing the transaction in June 2025, raising 2.272 billion yuan to ease financial pressures.

However, in 2026, ownership and financial pressures intensified: the spouse of the actual controller Yang Zhimiao, Zhu Fenglian, had her shares auctioned twice due to judicial enforcement; Zhongshan Securities also reduced capital by 150 million yuan through its alternative investment subsidiary Jin Hong Shao Hui, attempting to raise funds. The vicious cycle of ownership instability and cash shortages continues to hamper development.

Trouble Two: Internal Control Gaps Persist Despite Years of “Firefighting”

Internal governance at Zhongshan Securities has been turbulent since 2020. That year, due to severe governance and internal control flaws, the company faced upheaval, with the original chairman and president dismissed by the major shareholder. At that time, Luo Yong, Li Yonghu (now Chairman), and Chen Zhifeng (now Head of the Management Committee) among other senior executives from Dongguan Securities, left their positions and took over management in the fourth quarter of 2020, forming the current core leadership team.

Despite years of “firefighting,” internal control and compliance gaps remain unaddressed, with violations continuing. The recent brokerage violations highlight weaknesses in branch management and marketing oversight, and demonstrate the team’s inability to effectively rectify internal controls and standardize operations. Governance instability has yet to be fundamentally resolved.

Trouble Three: Performance Deviates Significantly from Industry, Litigation Adds to Woes

As a core asset of Jinlong Co., Ltd., Zhongshan Securities’ performance directly impacts the parent company. Jinlong has suffered losses for four consecutive years from 2021 to 2024, totaling nearly 1 billion yuan, only turning profitable in 2025 with an estimated net profit attributable to shareholders of 197 million to 286 million yuan.

Zhongshan Securities’ own performance has been hampered by compliance penalties.

In 2020, due to governance and internal control issues, the company was suspended from registering new asset management products, stock pledges, margin trading, and proprietary trading for a year. It turned from profit to loss in 2021, with losses expanding to 151 million yuan in 2022. In 2024, market recovery helped it return to profit, with net profit attributable to shareholders of 153 million yuan.

In 2025, amid overall industry growth, Zhongshan Securities’ performance declined sharply: operating income was 550 million yuan, down 29.17% year-over-year; net profit was 21 million yuan, down 88.06%.

Structurally, investment banking and asset management shrank significantly: net fee income from investment banking was 11 million yuan, down 71.53%; asset management fee income was about 4.87 million yuan, down 73.02%; proprietary trading marked a loss exceeding 100 million yuan due to fair value changes, while brokerage fee income increased by 39.02%.

Recently, Zhongshan Securities faced a lawsuit over overdue entrusted loans of 489 million yuan, with Everbright Bank demanding joint liability, further straining its already fragile finances.

When Will Zhongshan Securities Break Through? Governance and Compliance Are the Key

The recent brokerage violations at Zhongshan Securities again reveal internal control weaknesses. Private securities firms tend to prioritize performance over compliance and risk management. Coupled with Jinlong’s high debt and unstable ownership, the company faces significant future challenges.

For President Luo Yong, tasked with “firefighting,” the critical challenge is how to restore internal controls and lead the company out of the “recurring penalties” cycle under strict regulatory scrutiny.

For major shareholder Jinlong, even after halting the share transfer, it remains necessary to promote stable operation of subsidiaries under high debt pressures and prevent compliance risks from eroding performance.

The path for private securities firms to break through depends not only on performance recovery but also on truly addressing governance and compliance shortcomings. This is the key issue Zhongshan Securities and Jinlong must resolve.