JINJIAN CEREALS INDUSTRY exposes internal control issues again: two subsidiaries paid overdue taxes and late fees exceeding 5.5 million yuan

Reporter: Eric Wu Editor: Yang Yi

Recently, Hunan grain and oil listed company JINJIAN CEREALS INDUSTRY (SH600127, stock price 7.10 yuan, market value 4.557 billion yuan) has exposed internal control issues again.

On the evening of April 20, JINJIAN CEREALS INDUSTRY announced that after self-examination, two wholly-owned subsidiaries need to pay back taxes and late fees for the years 2022 to 2024, totaling over 5.5 million yuan.

The reporter from Daily Economic News noted that in February 2026, the Hunan Regulatory Bureau of the China Securities Regulatory Commission (hereinafter referred to as Hunan CSRC) had just taken administrative regulatory measures to order JINJIAN CEREALS INDUSTRY to rectify, directly pointing out that its subsidiaries had inflated operating income by over 580 million yuan through trade operations without actual logistics from 2020 to 2022. The then chairman Quan Zhen and the then president and acting chairman Chen Wei received warning letters simultaneously.

In fact, the amount of taxes and late fees that JINJIAN CEREALS INDUSTRY needs to pay back is not small. According to the company's financial report, the net profit attributable to the parent company in 2025 is only about 3.7728 million yuan, and the net profit attributable to the parent company in 2024 is 2.2288 million yuan. In this view, the amount of over 5.5 million yuan for repayment is close to the total net profit attributable to the parent company for the past two accounting years.

All payments have been completed

Entering 2026, JINJIAN CEREALS INDUSTRY has continuously exposed internal control issues in a short period.

On the evening of April 20, JINJIAN CEREALS INDUSTRY announced that its wholly-owned subsidiaries Hunan Yuxiang Food Co., Ltd. and JINJIAN Vegetable Oil Co., Ltd. discovered in a recent self-examination that they need to pay back taxes and late fees for the years 2022 to 2024, with the amounts to be repaid being 3.7025 million yuan and 1.8652 million yuan, respectively, totaling 5.5677 million yuan.

JINJIAN CEREALS INDUSTRY stated in the announcement that all payments have been completed, and there are no administrative penalties involved. It is expected to affect the net profit for 2026, and the aforementioned tax repayment and late fee matters do not belong to prior accounting errors and do not involve retrospective adjustments to prior financial data.

The reporter from Daily Economic News learned that just over two months ago, JINJIAN CEREALS INDUSTRY received a regulatory letter due to significant financial errors.

In February of this year, the Hunan CSRC issued a decision letter, pointing out that the company's subsidiary JINJIAN Agricultural Products (Yingkou) Co., Ltd. had conducted multiple trade operations without actual logistics and lacking commercial substance from 2020 to 2022, and the income should not be recognized; in addition, there were multiple business-related risks borne by customers, and income should not be recognized using the gross method. These operations led to distorted financial data for JINJIAN CEREALS INDUSTRY during the reporting period, with inflated operating income of 228 million yuan, 266 million yuan, and 93 million yuan for the years 2020 to 2022, respectively, totaling over 580 million yuan in inflated income over three years. During the same period, the total inflated profit was approximately 486,000 yuan.

Based on the aforementioned inflated income matters, the Hunan CSRC ultimately decided to take administrative regulatory measures to order JINJIAN CEREALS INDUSTRY to rectify, issuing warning letters to the then chairman Quan Zhen, the then president and acting chairman Chen Wei, the then vice president (in charge of trade business) Wu Fei, and the then financial director Ma Xianming, and recording them in the integrity archives of the securities and futures market

Revenue Decline in 2025

In fact, for JINJIAN CEREALS INDUSTRY, the additional payment of over 5.5 million yuan is not a small expense. Journalists found from JINJIAN CEREALS INDUSTRY's financial report that the company's net profit attributable to the parent in 2025 is approximately 3.7728 million yuan, while the net profit attributable to the parent in 2024 is approximately 2.2288 million yuan.

The annual report released by JINJIAN CEREALS INDUSTRY not long ago shows that during the reporting period, the company achieved operating revenue of 3.358 billion yuan, a year-on-year decrease of 27.43%; the net profit attributable to the parent was approximately 3.7728 million yuan, a year-on-year increase of 69.28%.

Regarding the reasons for the revenue decline, JINJIAN CEREALS INDUSTRY explained in its 2025 annual report that the listed company divested three companies primarily engaged in feed trading in 2024 to focus on its main business, resulting in a significant reduction in revenue from the trading segment.

It is worth noting that reporters from the Daily Economic News also found that in 2025, JINJIAN CEREALS INDUSTRY's revenue from trading-related businesses decreased not only due to asset divestment. By product, in 2025, most of JINJIAN CEREALS INDUSTRY's products experienced varying degrees of revenue decline, with grain and oil product revenue down 3.16%, dairy product revenue down 7.71%, and revenue from "other" products down 86.04%.

However, JINJIAN CEREALS INDUSTRY's 2025 annual report also highlights some positive aspects. For example, in 2025, the company's leisure food processing industry achieved revenue of nearly 120 million yuan. The company stated that in 2025, through a "product innovation + channel revolution" dual-drive strategy, its subsidiary Hunan Xinzhongyi Food Co., Ltd., primarily engaged in leisure food, successfully turned losses into profits.

In addition, in the 2025 annual report, JINJIAN CEREALS INDUSTRY also stated that its operational goal for 2026 is to achieve revenue of 4 billion yuan.

Daily Economic News