With the increasing deployment of IT systems, information systems vulnerabilities have led to a severe negative impact on firms and businesses. This paper aims to examine the impact of information system vulnerability announcements on the market value of Chinese firms. Using the collected security incidents in Chinese firms from 2015 to 2021, we study how characteristics of enterprises and vulnerabilities affect enterprises’ market value through event study and regression analysis. In particular, we find that state-owned enterprises suffer larger negative effects than other types of firms. This study also provides companies and managers with insights in decision-making and recommendations from a managerial perspective.