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This "third city in the country" has caused chaos among the Japanese and Korean dominance

Source: Deep Blue Finance

Written by: Wang Xin

Six years ago, no one would have thought that the leading vaccine company would fall in this way.

On May 8, 2026, the Shenzhen Stock Exchange issued a regulatory letter directly targeting ZHIFEI-BIOL Chairman Jiang Rensheng and President Jiang Lingfeng, father and son. The letter criticized the company for retrospectively adjusting its financial report data from 2020 to the third quarter of 2025 on April 28, violating regulations by correcting nearly six years of performance.

On this day, it had been just 20 months since the post-80s only son Jiang Lingfeng took over the presidency from his father.

What the young commander welcomed was not flowers and applause, but an era his father had never seen—hard and heavy.

1

"Financial Cleanup" Crossed the Red Line

The issues pointed out in the regulatory letter sound somewhat basic.

First, the timing of service fee revenue recognition was inaccurate; it should have been recognized on an accrual basis but was calculated based on "actual cash received." Second, the impact of post-period returns on the financial statements was not considered. Third, the supplementary information in the cash flow statement needed adjustment.

Vaccines have a short shelf life, and demand fluctuates greatly, making returns a norm. However, in ZHIFEI-BIOL's past financial reports, there was neither sufficient provision for returns nor inclusion of post-period returns in current accounting. As of April 18, 2025, the company had received customer returns amounting to 22.5499 million yuan.

For a listed company with annual revenue consistently exceeding 20 billion yuan, such fundamental accounting errors are hard to dismiss as mere "oversights."

The Shenzhen Stock Exchange determined that the above actions violated the "Rules for the Listing of Stocks on the Growth Enterprise Market," and the chairman, president, and financial director were all named. The company emphasized that the correction of errors "would not lead to a change in the nature of profits and losses" and "does not constitute a major accounting error," but the adjustments spanning six accounting years were enough to expose systemic vulnerabilities in its financial internal controls.

The market did not give any breathing room.

On the same day at the earnings meeting, an investor directly confronted: "Investors who have invested in your company in recent years have lost over 95%, 1 million has only a few thousand left... We want to hear the truth because we have heard empty words for six years, and there is nothing left."

Chairman Jiang Rensheng responded with "deep understanding," admitting that the company is experiencing the "darkest hour" of deep industry adjustment, and the company's stock price continues to be under pressure. In the board's "Letter to Shareholders" in the annual report, the tone was even more straightforward: "Over the past year, the company has actively sought change and promoted a fundamental shift from business-driven to innovation-driven, but the short-term impact of business model reconstruction has been concentrated in this year."

This company was clearly well-prepared, using a thorough "financial cleanup" to eliminate all the risks at once. However, the scale of this risk is larger than the outside world imagined.

In 2025, ZHIFEI-BIOL faced its first annual loss since going public: a net loss attributable to shareholders of 14.723 billion yuan. The main driver was a staggering 13.618 billion yuan in inventory write-down losses and contract performance cost impairment losses, of which 12.766 billion yuan was related to the inventory of the Merck HPV vaccine that it represented.

Once a "money printer," it overnight became a "money shredder" that devoured profits.

2

Dependency on agency, the outcome was already predetermined

Why does ZHIFEI-BIOL have so many unsellable vaccines?

The answer lies in the frenzy that began in 2017. In 2017 and 2018, ZHIFEI-BIOL successively obtained the exclusive agency rights for Merck's quadrivalent and nine-valent HPV vaccines in China.

HPV vaccines, commonly known as cervical cancer vaccines, are used to prevent human papillomavirus infections and are currently the only vaccines that can prevent malignant tumors globally.

In a market where the penetration rate is less than 1% and the demand for vaccination among eligible women has been suppressed to the extreme, this private vaccine leader sat on a powerful money-printing machine. Revenue soared from less than 1 billion yuan for many years to 53 billion yuan in 2023, and its market value peaked at 360 billion yuan in May 2021.

In 2021, Jiang Rensheng surpassed Longfor's Wu Yajun for the first time to become Chongqing's richest person, with a fortune of about 140 billion yuan. From a poor boy in Guanyang, Guangxi, to a vaccine tycoon with a fortune in the hundreds of billions, he achieved this in less than 20 years.

However, shortcuts always come to an end.

Domestic bivalent and nine-valent vaccines such as Wantai Biological and Watson Bio have rapidly risen, significantly squeezing the market space for Merck's HPV vaccines.

Even more fatal was the agreement ZHIFEI-BIOL signed with Merck in 2023, which set a staggering procurement commitment of over 100 billion yuan from 2024 to 2026. Vaccines do not improve with age like fine liquor. Products nearing expiration cannot be sold even at a discount and ultimately can only be written off by the accounting department.

Thus, in February 2025, Merck's CEO publicly declared: "We will suspend the supply of HPV vaccines to the Chinese market, allowing our Chinese partners to sell their unused vaccine inventory." The so-called "Chinese partners" refer to ZHIFEI-BIOL.

And ZHIFEI-BIOL simply did not dare to say "no" to Merck. In 2024, agency products accounted for 94.63% of its total revenue, and even if revenue significantly declined in 2025, the proportion of agency products would still be as high as 85.74% This company is fundamentally still a sales company dressed in a biotechnology cloak.

3

The transformation remains a gamble

Tracing the history of ZHIFEI-BIOL, one word cannot be avoided: gambling nature.

From Jiang Rensheng selling his house in 2002 to buy Chongqing Jinxin and betting on a vaccine operating license, to making a fortune during the pandemic with exclusive national rights to A+C meningitis vaccines, and then betting on Merck's HPV vaccine in 2017, he has always bet right.

When Jiang Rensheng handed over the presidency to his only son Jiang Lingfeng in September 2024, the old father had done his best, with 10 out of 13 vice presidents being post-80s, forming a "youthful" team that is easier to manage. However, this successor, who comes from a legal background and was "recruited" by his father from a legal position in the tobacco monopoly bureau, faces a completely different era than his father did back then.

Rather than saying he is "taking over," it is more accurate to say he is "taking the blame."

Faced with a massive loss of billions, in 2025, Jiang Rensheng and Jiang Lingfeng voluntarily gave up all annual performance bonuses, with the total annual salary of 21 directors and supervisors reduced by 3.28 million yuan compared to the previous year.

The family wealth is also evaporating rapidly; the latest Hurun Rich List shows that Jiang Rensheng is still the richest person in Chongqing, but the family's fortune has shrunk from a peak of 170 billion yuan in 2021 to 42 billion yuan.

How to turn the situation around? ZHIFEI-BIOL's counterattack method once again exposes the company's gambling gene.

In October 2023, ZHIFEI-BIOL placed its second lifeline on GSK's shingles vaccine. The agreement was signed for three years, betting that it could become the next HPV vaccine, with a guaranteed purchase of 20.64 billion yuan over three years. However, a year later, it was urgently revised, extending the three years to six years, cutting the semi-annual procurement, and canceling the guarantee.

In April 2026, ZHIFEI-BIOL signed a revised agreement with Merck, canceling the basic procurement amount and changing to "on-demand rolling procurement," essentially unwilling to give up the agency route.

Last year, the company took a controlling stake in Chen'an Biotechnology through capital increase, entering the metabolic disease and semaglutide weight loss drug track, attempting to open a second curve, which in some ways is a strong squeeze into the "future red sea."

Fortunately, several self-developed products, such as the 15-valent pneumonia conjugate vaccine, have entered the listing application stage, focusing on domestic alternatives. This is one of the few correct paths for ZHIFEI-BIOL.

Fundamentally speaking, today's various breakthroughs are strikingly similar to ZHIFEI-BIOL's strategies over the past twenty years. However, the situation on both sides of the card table today is far more brutal than it was back then.

For a company still highly controlled by a family, after "burning the boats," is it "cutting off an arm to survive" or "starting over"?

The answer lies in the next "gamble" of the Jiang father and son: whether they can truly break away from agency dependence and escape the gambling gene, building a systematic and sustainable path for this private enterprise