It is illegal because there are provisions in the Anti-Unfair Competition Law, and this situation is not new. You can find many such cases on the court website. However, the company concerned belongs to a short-selling company in Hong Kong. Although Hong Kong has recently introduced such policies to curb the infringement of short-selling companies, it is also futile. I think your headache should be that it is very difficult to defend rights in trademark law in China. If Hong Kong and the mainland cooperate well with relevant policies, it should be able to solve this kind of incident. It is really a headache for this kind of thing to defend rights, but it does waste a lot of human and financial resources. Basically, there is no better way to sue them and friends from the Industrial and Commercial Bureau for help.