On the evening of August 23rd, Jiayuan Science And Technology Co., Ltd. (301117.SZ) released two announcements detailing the outcome of its regulatory investigation and the proposed penalty measures. The company disclosed receipt of the "Administrative Penalty Advance Notice" from the China Securities Regulatory Commission (CSRC).

According to the notice, the regulator determined that the company's financial data for 2019 and 2020 in its prospectus, along with its annual reports for 2021 and 2022, contained false records. Consequently, the CSRC intends to impose a combined fine of 14.5 million yuan on the company and four related responsible individuals. Additionally, the company's shares will be suspended for one trading day starting from August 24th, and will resume trading on August 25th under the special treatment (ST) designation, with the securities abbreviation changing to "ST Jiayuan."

Financial Report Misrepresentation Leads to Penalties

Based on the CSRC's findings, Jiayuan Tech was found to have committed two violations. Firstly, from 2019 to 2022, the company signed multiple scientific research or electronic product procurement contracts with Customer A, and improperly recognized revenue before meeting the conditions for revenue recognition. Customer A was the company's second-largest client in 2019 and its largest in 2020.

Secondly, in 2020, the company inserted itself into an ongoing purchase and sales business chain between Wuxi Jindu and Kunming Boyuan, with these transactions lacking commercial substance. These two violations resulted in revenue overstatements of 20.156 million yuan in 2019, understatements of 6.8765 million yuan in 2020, overstatements of 28.0338 million yuan in 2021, and understatements of 25.6247 million yuan in 2022, representing 15.39%, 3.61%, 8.85%, and 9.51% of the disclosed revenue absolute values for those periods respectively.

Regarding total profit, the company overstated by 16.1384 million yuan in 2019, understated by 15.696 million yuan in 2020, overstated by 18.0393 million yuan in 2021, and understated by 16.3445 million yuan in 2022, with the highest proportion reaching 44.02% of the disclosed total profit absolute value. In response, the CSRC plans to order Jiayuan Tech to rectify the issues, issue a warning, and impose a 6 million yuan fine on the company. The actual controller and chairman, Wang Jin, faces a 3 million yuan fine; vice general manager Zhu Weihua and CFO Liu Xu each face 2 million yuan fines; and another actual controller and former board secretary, Yin Mingjun, faces a 1.5 million yuan penalty.

It is noteworthy that Wang Jin was previously subjected to detention and investigation in April 2025, although the company stated at that time that the matter would not significantly impact normal operations. He was released from these measures and resumed his duties in December of that same year.

False Prospectus Records with CITIC Securities as Sponsor

The financial fraud identified in the penalty traces back to Jiayuan Tech's IPO application period. On November 30, 2020, the company disclosed the draft version of its "Prospectus for Initial Public Offering and Listing on the ChiNext Board." In June of the following year, it submitted the meeting version, and in January 2022, the registration version of the prospectus covered the reporting periods of 2018-2020 and the first half of 2021.

This means that the 2019 and 2020 financial data within the prospectus's reporting period have both been determined to contain false records. On January 17, 2022, Jiayuan Tech listed on the ChiNext board with an issue price of 46.80 yuan per share, raising a total of 1.08 billion yuan. After deducting issuance expenses, the net proceeds were 995 million yuan, exceeding the original plan of 590 million yuan by 405 million yuan.

CITIC SEC served as the sponsor (lead underwriter) for this issuance, with total issuance costs amounting to 84.8376 million yuan, of which the sponsorship and underwriting fees collected by CITIC SEC were 64.7898 million yuan. Following its listing, Jiayuan Tech's stock price peaked at 99.80 yuan intraday on the second trading day, the highest since its debut, before declining over time. Prior to the suspension, the stock closed at 17.72 yuan, corresponding to a total market value of approximately 3.2 billion yuan.

On the day after the investigation announcement, Jiayuan Tech's share price hit the 20% downward limit and remained locked at that level throughout the trading session, resulting in substantial losses for investors.

Three Years with Two Losses and Facing Investor Claims

Jiayuan Tech's operational performance has also been less than satisfactory. From 2023 to 2025, the company recorded revenues of 227 million yuan, 337 million yuan, and 320 million yuan respectively. After a 48.11% year-on-year increase in 2024, revenue declined by 5.02% in 2025. Furthermore, the company's non-GAAP net profits for the past three years were -16.2805 million yuan, 3.3037 million yuan, and -49.4276 million yuan, with losses recorded in all years except 2024.

Regarding earnings quality, the company's gross margin in 2025 was 22.08%, nearly halved from 43.15% in 2024. In terms of cash flow, from 2023 to 2025, the net cash flows generated from operating activities were -52.4576 million yuan, -50.8309 million yuan, and -9.0653 million yuan respectively, remaining negative for three consecutive years. In 2024, despite book profit of 11.4454 million yuan, operating cash flow still showed a net outflow of 50.8309 million yuan.

With the administrative penalty advance notice now in place, the channel for investor claims has opened. According to the judicial interpretation of the Supreme People's Court on false statements, listed companies that cause investor losses through securities misrepresentation can be sued for compensation. The scope of claims includes investment differential losses, commission fees, and stamp duty losses. Based on the administrative penalty advance notice, affected investors who purchased Jiayuan Tech shares between January 17, 2022, and July 8, 2026, and held them at the close of trading on July 8, 2026, may seek compensation in accordance with the law. The final eligibility for compensation will be determined by the court's ruling.