--- title: "ZHIFEI-BIOL's six-year \"old accounts\" difficult to conceal tricks, hundred billion giant losses drag down former \"vaccine king\"?" type: "News" locale: "en" url: "https://longbridge.com/en/news/286711080.md" description: "ZHIFEI-BIOL is under supervision by the Shenzhen Stock Exchange due to accounting errors, with the chairman and executives being named. The company has issues with the inaccurate recognition of service fee income between 2020 and 2025, leading to the need for retrospective adjustments to the financial statements. In the face of significant losses and a sharp decline in stock prices, the chairman admitted that the company is experiencing the \"darkest hour\" of a deep industry adjustment" datetime: "2026-05-18T03:38:36.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286711080.md) - [en](https://longbridge.com/en/news/286711080.md) - [zh-HK](https://longbridge.com/zh-HK/news/286711080.md) --- # ZHIFEI-BIOL's six-year "old accounts" difficult to conceal tricks, hundred billion giant losses drag down former "vaccine king"? On May 8th, the Shenzhen Stock Exchange issued a regulatory letter, suddenly placing the once "vaccine leader" ZHIFEI-BIOL (300122.SZ) back in the spotlight. This is not an ordinary regulatory document. The Shenzhen Stock Exchange pointed out that during the accounting period of six years from 2020 to the third quarter of 2025, the company had multiple accounting errors, including inaccurate recognition of service fee income, failure to consider the impact of post-period returns, and adjustments to supplementary information in the cash flow statement, and required retrospective adjustments to the relevant financial statements. Chairman Jiang Rensheng, President Jiang Lingfeng, and Chief Financial Officer Li Zhenjing were all named. (Image source: Company announcement) On the same day, ZHIFEI-BIOL held a performance briefing, where Chairman Jiang Rensheng faced sharp questions from investors about "from 1 million to just a few thousand." He expressed "deep understanding" and admitted that the company is experiencing the "darkest moment" of a deep industry adjustment. On one side is the serious warning from regulators, and on the other side is the dual strangulation of massive losses and plummeting stock prices. Once a vaccine giant with a market value exceeding 360 billion yuan, it now stands at a crossroads of life and death. **Six years of accounting "patching," information disclosure quality questioned** Although the wording of the Shenzhen Stock Exchange's regulatory letter is not severe, it contains a significant amount of information. On April 28, 2026, ZHIFEI-BIOL disclosed an announcement regarding the retrospective adjustments and corrections of annual reports related to prior accounting errors, correcting and retrospectively adjusting certain financial statements and notes from 2020 to the third quarter of 2025. The Shenzhen Stock Exchange determined that the aforementioned actions violated Article 1.4 and Article 5.1.1 of the "Rules for the Listing of Stocks on the Growth Enterprise Market," while Jiang Rensheng, Jiang Lingfeng, and Li Zhenjing violated Article 5.1.2. Specifically, the error corrections involve three major issues: First, the timing of service fee income recognition was incorrect. As a company primarily engaged in vaccine agency and self-research, service fee income is an important pillar of ZHIFEI-BIOL's revenue, especially during the golden period of agency for Merck's HPV vaccine, where the recognition of related service fees directly determines revenue scale and profit levels. According to the agreements signed between the company and its clients, ZHIFEI-BIOL has the right to charge service fees for promoting channel inventory consumption and collections. However, the company recognized income in the 2024 fiscal year based on "actual service fees received," which differs from the accrual basis stipulated in the agreement. This adjustment led to an increase in operating income of 45.5455 million yuan for the 2023 fiscal year and an increase of 1.739 million yuan for the 2024 fiscal year. Second, the impact of post-period returns on the financial statements was not considered. Due to the short shelf life and significant demand fluctuations of vaccine products, post-period returns are common in the industry, but ZHIFEI-BIOL did not adequately provision for return reserves in past financial reports, nor did it include post-period returns in current financial accounting, directly leading to distorted financial statement data As of April 18, 2025, the company received customer returns of vaccines amounting to 22.5499 million yuan, but this matter was not previously considered in the impact on the 2024 financial statements. After adjustments, the operating cost for 2024 is 10.1598 million yuan, and the inventory impairment provision is increased by 5.7334 million yuan. Thirdly, related items in the cash flow statement supplementary information need to be adjusted. Although the company emphasizes that "it will not lead to a change in the profit or loss nature of the disclosed financial statements for the relevant years," the errors spanning six accounting years, involving revenue recognition and return processing, are enough to expose systemic loopholes in its financial internal controls. For a listed company with annual revenue exceeding 26 billion yuan, such a fundamental error as "recognizing service fees on a cash basis" is hard to dismiss lightly as mere "negligence." What is even more intriguing is that against the backdrop of a performance crash in 2025 and continued losses in the first quarter of 2026, this regulatory letter is like adding insult to injury—it undermines not only the accuracy of financial data but also the basic trust of the capital market in the management's integrity. **From "Vaccine King" to "Loss Leader"** The exposure of accounting errors cruelly echoes the collapse of ZHIFEI-BIOL's performance. Reviewing the company's 2025 annual report and 2026 first-quarter report, a series of shocking data outlines the performance decline trajectory of this vaccine leader. 2025 marks the first loss-making year since ZHIFEI-BIOL's listing, with the scale of losses reaching a historical peak. The annual report shows that the company achieved an operating income of 8.958 billion yuan for the year, a year-on-year drop of 65.61%; the net profit attributable to shareholders of the parent company was a loss of 14.723 billion yuan, a year-on-year plunge of 846.42%. This is a rare hundred billion-level loss in the history of the A-share vaccine sector. (Image source: Company 2025 Annual Performance Report) Core operating data is equally grim. By the end of 2025, the company's total assets amounted to 31.720 billion yuan, a significant decrease of 38.16% from 51.297 billion yuan at the end of 2024; total liabilities were 15.614 billion yuan, and total shareholders' equity was 16.106 billion yuan, nearly halving from 30.851 billion yuan at the end of 2024. Entering the first quarter of 2026, the loss situation continued to worsen. In the first quarter, the company achieved an operating income of 2.150 billion yuan, a year-on-year decline of 8.64%; the net loss attributable to shareholders of the parent company expanded to 388 million yuan, with basic earnings per share at -0.1622 yuan, further widening the loss compared to -0.1366 yuan in the first quarter of 2025. As of the end of March 2026, the company's total assets amounted to 29.092 billion yuan, total liabilities were 13.380 billion yuan, and total shareholders' equity was 15.712 billion yuan, with asset scale continuing to shrink (Image source: Company Q1 2026 performance report) Behind the collapse in performance is the complete failure of the core business. As the company's "cash cow," the agency's Merck HPV vaccine business has continued to shrink in recent years, with total revenue from agency products in 2025 amounting to 7.681 billion yuan, a year-on-year decrease of 68.84%, accounting for as much as 85.74% of total revenue, but the gross profit margin has dropped to -0.49%, falling into the awkward situation of "selling more, losing more." The Merck HPV vaccine, which once supported ZHIFEI-BIOL's market value of hundreds of billions, has now become the biggest financial burden. In 2025, the four-valent HPV vaccine had no batch approvals, and the batch approval quantity for the nine-valent HPV vaccine was only 4.2388 million doses, a significant year-on-year decline of 86.39%. GSK's recombinant shingles vaccine had a batch approval quantity of 2.4607 million doses, down 34.83% year-on-year. The sharp decline in demand has turned the inventory that ZHIFEI-BIOL previously hoarded on a large scale into a "financial black hole." In 2025, the company made a total asset impairment provision of 14.128 billion yuan, of which the inventory impairment provision and contract performance cost impairment amounted to 13.618 billion yuan, with the HPV vaccine-related inventory alone accounting for 12.766 billion yuan. This tens of billions level impairment directly breached the profit bottom line, with the return on equity (ROE) plummeting from a positive value of 2024 to -62.67% in 2025. **Industry Deep Adjustment, Centralized Procurement + Demand Shrinkage** Since 2025, the vaccine industry has faced multiple blows from centralized procurement price reductions, demand shrinkage, and product homogenization, significantly narrowing industry profitability, exacerbating the Matthew effect, and showing clear differentiation among leading enterprises. ZHIFEI-BIOL, which overly relies on agency business, happens to be in the "disaster zone" of industry adjustment. Data from the China National Institute for Food and Drug Control shows that the batch approval quantity of vaccines in China has continuously declined from 6,393 batches in 2021 to 3,858 batches in 2025, with an average annual decline of 8.4%. The continuous decline in batch approvals, coupled with a decrease in the number of newborns, adjustments in immunization programs, and the spread of "vaccine hesitancy" sentiment, has led the entire industry to experience a brutal clearing. According to Southwest Securities' analysis, in 2024, the total batch approval quantity of HPV vaccines was only 195 batches, a decrease of 64% compared to 2023. Additionally, a report from CITIC Securities disclosed that the downward trend continued in 2025, with a total of 183 batches approved, a year-on-year decrease of 3%, but the structure has changed: the batch approval quantity of the bivalent HPV vaccine has significantly increased, with a total of 159 batches approved throughout the year, a year-on-year increase of 99%, of which Wantai Biological accounted for as much as 95%; while the batch approval quantity of Merck's nine-valent HPV vaccine continued to decline This transformation is mainly due to policy guidance. Starting from November 10, 2025, the HPV vaccine will be included in the national immunization program, providing free vaccinations for girls aged 13. The free vaccine will be the bivalent vaccine, specifically the bivalent vaccine from WanTai Biologics, priced at only 27.5 yuan per dose. **The "Pledge" and "Redemption" of the Jiang Rensheng Family** The three individuals named in the regulatory letter—Jiang Rensheng, Jiang Lingfeng, and Li Zhenjing—constitute the core triangle of the governance structure of ZHIFEI-BIOL. Jiang Rensheng, born in 1953, is the founder and actual controller of the company, currently serving as chairman. His son Jiang Lingfeng, born in 1980, is currently the vice chairman and president. Jiang Rensheng's brother, Jiang Xisheng, currently serves as vice president. The three form a concerted action group, collectively holding 1.306 billion shares of the company, accounting for 54.55% of the total share capital. This family-controlled structure is not uncommon in the A-share biopharmaceutical sector, but it often faces questions regarding governance effectiveness during times of crisis. In terms of share pledges, as of May 20, 2025, Jiang Rensheng and his concerted action group had cumulatively pledged 184.7 million shares, accounting for 14.14% of their shareholding and 7.72% of the company's total share capital. After several rounds of lifting and re-pledging, by March 2026, the cumulative number of pledged shares was 139.35 million, accounting for 12.02% of their holdings and 5.82% of the company's total share capital. The shares held by Jiang Lingfeng and Jiang Xisheng were not pledged. Although the company announcement emphasized that "there is no risk of forced liquidation," in the context of performance plummeting and stock prices under pressure, any pledge actions by the controlling shareholder will be magnified by the market. In January 2026, 65.45 million shares were unpledged, and in March, an additional 20.1 million shares were pledged for "equity investment." This "left hand unpledging, right hand pledging" operation inevitably leads investors to speculate on the true intentions behind its financial arrangements. Accounting errors, massive losses, and industry pressures have combined to make ZHIFEI-BIOL encounter a "Waterloo" in the capital market, with stock prices continuously plummeting and shareholder wealth significantly shrinking, leading to an increasing crisis of market trust. As of the close on May 14, 2026, the company's stock price was 15.09 yuan per share, a slight decrease from 15.47 yuan per share on May 8, the day the regulatory letter was issued. In the long term, the decline is even more alarming. Public data shows that over the past five years, ZHIFEI-BIOL's stock price has dropped from 231.19 yuan per share on May 17, 2021, to 15.09 yuan per share on May 14, a decline of 93.5%; in the short term, over the past three months, the stock price has fallen from 17.47 yuan per share on February 6, 2026, to 15.09 yuan per share, a decrease of 13.6%. From a market value of hundreds of billions as a "vaccine leader" to now being entangled in regulatory letters, suffering massive losses, and experiencing a stock price crash, the story of ZHIFEI-BIOL serves as a wake-up call and a true reflection of the growing pains during the transformation period of China's vaccine industry. Whether the company can break free from its predicament and rejuvenate will continue to be a focus of attention. 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