Chinese top regulators' tightened oversight on misleading information or market manipulation is expected to create a clearer and healthier market environment, safeguarding investor interest and facilitating the inflow of more long-term capital, experts said.

They cited the 13 million yuan ($1.9 million) fine on Jiangsu province-based Shuangliang Eco-Energy Systems Co Ltd as the latest example.

The company was handed the penalty for leveraging a hot topic among market participants — commercial aerospace — and releasing misleading statements that affected investor judgment, according to an announcement by the Jiangsu office of the China Securities Regulatory Commission on Sunday.

During the trading hours of Feb 12, Shuangliang published an article on its official WeChat account saying that it supplies products to spaceflight company SpaceX. This helped its share price soar by the daily limit of 10 percent.

However, after the close of market hours, the company quickly issued a clarification, stating that the involved orders accounted for only 0.11 percent of its revenue and that Shuangliang was a nonexclusive indirect supplier to the US-based company.

Shuangliang's share price fell by the daily limit of 10 percent the next trading day.

Regulators determined that Shuangliang failed to accurately and completely disclose key information in the WeChat story, thereby violating certain articles in China's Securities Law. The company, the board secretary and its head of public relations have all been fined.

Regulators have adopted stricter supervision over piggybacking on hot topics or hyping up concepts. Nearly 10 A-share companies have been named and held accountable for such deeds so far, among which four have been placed under investigation by the CSRC.

Most of these companies had hyped up concepts in the buzzing areas of the capital market, such as commercial aerospace, artificial intelligence, brain-computer interfaces and chips.

According to Zhao Jingguo, senior partner of Shanghai Xinben Law Firm, piggybacking on hot topics and painting a rosy picture have become common tactics in companies' misleading statements. These are violations that interfere with investors' judgment through selective disclosure, one-sided exaggeration, concealment of key risks or vague statements. These have come under stricter crackdown this year, he said.

At a news conference during the two sessions held in early March, CSRC Chairman Wu Qing emphasized that regulatory enforcement and investor protection are the regulator's core functions, which will be more powerful and effective.

Efforts will be made to accurately and forcefully crack down on malicious illegal activities such as financial fraud, market manipulation and insider trading. Companies' authenticity should also be further improved to make them more investable, Wu said.

"The market should truly feel fairness and justice. Respecting the law and keeping promises should become a common pursuit for all market participants," he said.

According to Tian Lihui, dean of the institute of financial development at Nankai University, a market that significantly increases the cost of illegal activities through strict laws can guide capital to flow out of low-quality companies that "tell stories", and thus flow into the well-governed and genuinely competitive ones.

The efficiency of resource allocation and the overall cleaner market environment will be significantly enhanced. More medium and long-term capital will thus be attracted, helping the capital market to truly become a "booster" for the real economy, Tian said.