ST Jihua announced after market close on September 28 that its board of directors had approved a proposal to correct prior accounting errors and make retrospective adjustments, restating the consolidated financial statements for the years 2018 through 2021. The correction stems from an administrative penalty decision issued by the China Securities Regulatory Commission on July 29, 2026, which found that Jihua Group had inflated operating revenue in its annual reports for 2018, 2019, 2020, and 2021 by 5.098 billion yuan, 2.998 billion yuan, 551 million yuan, and 1.013 billion yuan respectively, representing 22.48 percent, 14.17 percent, 3.68 percent, and 6.54 percent of the operating revenue disclosed for each period. Over the same periods, operating costs were inflated by 5.079 billion yuan, 2.98 billion yuan, 551 million yuan, and 1.013 billion yuan respectively, while the 2020 annual report also understated total profit by 502 million yuan, equivalent to 60.26 percent of the total profit disclosed for that period. The company said the correction will not change the profit or loss nature of the previously disclosed annual financial statements, nor will it cause net assets at the end of 2018 through 2021 to become negative. Tianjian Certified Public Accountants issued a special audit report and assurance report on the same day, and the restated financial statements have been disclosed on the Shanghai Stock Exchange website. In the first half of 2026, the company achieved operating revenue of 2.411 billion yuan, down 24.84 percent year on year, and net profit attributable to shareholders of the listed company was negative 288 million yuan, compared with negative 79 million yuan in the same period last year.
Jihua Group Corp LtdCSRC penalty found Jihua inflated revenue by nearly 10 billion yuan across 2018-2021, forcing restatement of financials.
