> Source: https://ashareapi.com/en/docs/guides/financial-redflags/  ·  Markdown version for LLMs / AI agents

Tutorial

# A-Share Financial Red Flags: Finding Risk Signals with Data
 Avoiding landmines beats picking winners: profits without cash, surging holder counts, large lock-up expiries — all visible in public data through four endpoints. This tutorial identifies risks only; it makes no recommendations.

## Why check for landmines first
 Before studying growth or valuation, **confirm the company has no obvious red flags** — do it in the wrong order and the rest of the analysis is wasted.
 All four steps below use **public filings and disclosure data** and run through the API. **No buy/sell advice is given**; the goal is to surface risk signals.

## Step 1: cross-check the statements (profit vs cash)

 Python (key required)
```
import requests

KEY = "ct-your-key"
H = {"Authorization": "Bearer " + KEY}

r = requests.get("https://api.ashareapi.com/v1/finance",
 headers=H, params={"code": "sh600667"}, timeout=20)
tabs = r.json()["data"] # three tables: income / balance sheet / cash flow
names = ["income", "balance sheet", "cash flow"]
for name, tab in zip(names, tabs):
 latest = tab[0] # periods are descending: first row is the latest
 print(name, latest["EndDate"], latest.get("OperatingRevenue"))
```

-
 **What to look at**: net profit vs **net operating cash flow** — a persistent gap (high profit, chronically negative cash flow) is a classic signal

-
 **Look at multiple periods**: seasonality distorts single quarters; use at least 4–8 periods (`num`)

-
 **Receivables growing faster than revenue**: possibly buying revenue with looser credit

## Step 2: shareholder counts (concentrating or dispersing)

 Python
```
r = requests.get("https://api.ashareapi.com/v1/shareholder",
 headers=H, params={"code": "sh600667"}, timeout=20)
print(r.json().get("structured") or r.json()["data"])
# Returns: top holders / shareholder count (with change %) / institutional holdings
```

-
 **Rising counts = dispersing** (more retail, often high-level churn or institutional distribution)

-
 **Falling counts = concentrating** (possible accumulation, or just deteriorating liquidity)

-
 **Read it with price position**: falling counts at a low vs surging counts at a high mean opposite things

## Step 3: events (lock-ups / reductions / dividends)

 Python
```
# All event tags (42 types: lock-up / buyback / placement / dividend / results …)
r = requests.get("https://api.ashareapi.com/v1/events",
 headers=H, params={"code": "sh600667"}, timeout=20)
print(r.json().get("structured") or r.json()["data"])

# Dividend history (continuity)
r = requests.get("https://api.ashareapi.com/v1/dividend",
 headers=H, params={"code": "sh600667"}, timeout=20)
print(r.json().get("structured") or r.json()["data"])
```

-
 **Large lock-up expiries**: the bigger the share of free float, the larger the potential supply

-
 **Dividend continuity**: steady payers are not automatically good, but an **abrupt stop** deserves a question

-
 **Events are facts**: a lock-up expiry is not a reduction — check announcements and actual filings

## The four-step checklist
 Four red flags is a different magnitude from one. Screening for landmines **rules out extremes**; it does not score stocks.
 |
| | Step | Check | Red flag

| | ① Cross-check | Net profit vs operating cash flow | Persistent gap (profit without cash)

| | ② Ownership | Shareholder count change | Surging counts at a high price

| | ③ Events | Lock-up / reduction / placement | Large lock-up expiry near highs

| | ④ Dividends | Continuity | Abrupt stop after years of paying

 ① Cross-check
 Net profit vs operating cash flow
 Persistent gap (profit without cash)

 ② Ownership
 Shareholder count change
 Surging counts at a high price

 ③ Events
 Lock-up / reduction / placement
 Large lock-up expiry near highs

 ④ Dividends
 Continuity
 Abrupt stop after years of paying

## Common mistakes and boundaries

-
 **Calling negative cash flow fraud** → growth-stage companies often have negative cash flow; check whether it matches revenue and capex

-
 **Concluding from one quarter** → compare multiple periods (seasonality, one-offs)

-
 **Ignoring disclosure cadence** → financials update on reporting dates; if a period has not been disclosed, there is no data (not an API problem)

-
 **Units** → `amount` fields are generally in CNY; follow each field’s documentation

-
 **This is not investment advice** → risk-signal identification only

## FAQ
 Do these endpoints need a key?
 **Yes, all of them.** `/v1/finance`, `/v1/shareholder`, `/v1/events` and `/v1/dividend` are paid endpoints; the free five are quote, kline, hot, market overview and breadth.

 Why is the latest report missing?
 Financial data updates **on disclosure dates**, not in real time. If the company has not reported yet, that period simply does not exist — that is the reporting cadence, not an API issue. Use `/v1/calendar` to check the disclosure schedule.

 How often do shareholder counts update?
 They are disclosed in periodic reports (quarterly / semi-annual / annual), so updates are **quarterly**. Always check the report period behind "latest".

 Is negative operating cash flow always a red flag?
 **No.** A growing company investing heavily (inventory, receivables, capex) can run negative. Read it together with **revenue growth, receivables growth and capex** to tell expansion from cash that never comes back.

 Can this data avoid every risk?
 **No.** Public data only surfaces **public signals** (cross-check anomalies, lock-ups, holder-count shifts). Fraud or sudden operational accidents cannot be fully predicted. Screening **rules out obvious anomalies**; it does not guarantee safety.

 Last updated: 2026-09-23
 Code and fields come from live responses (verified 2026-09-25: finance returns three statement tables in descending period order, latest period 2026-06-30; shareholder returns 10 rows with holder counts; events returns 25 event types; dividend returns 3 records). Disclosure cadence and units follow the endpoint docs.

 Read next

-
[Endpoint reference (incl. finance / shareholder / events / dividend)](/en/endpoints)

-
[How to read A-share sector rotation](/en/docs/guides/sector-rotation)

-
[Quantifying A-Share market mood (all-free endpoints)](/en/docs/guides/market-mood)

-
[Error codes & rate limits](/en/docs/errors)

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