Jiayuan Technology (301117) has become the latest company caught in a serious financial reporting scandal, with irregularities allegedly stretching from before its initial public offering through the years following its market debut. On the evening of August 23, the company announced it had received an advance notice of administrative penalty from the China Securities Regulatory Commission (CSRC) on August 21. The company and four of its executives face combined proposed fines of RMB 14.5 million due to false statements contained in its prospectus financial data for 2019 and 2020, as well as its annual reports for 2021 and 2022. Trading in the company's shares was suspended for one day on August 24, and upon resumption on August 25, the stock was placed under other risk alert status, with its trading name changed to ST Jiayuan. On the first day of resumed trading, the share price hit the downside limit, with further declines following. By August 28, the stock closed at RMB 13.08 per share, representing a cumulative drop of 26.19% from its pre-suspension level.

Back in 2021, during Jiayuan Technology's IPO push, media analysis of its publicly disclosed prospectus data had already raised red flags about a surge in accounts receivable. The concerns highlighted a mismatch between the pace of receivables growth and revenue momentum, issues that the CSRC has now confirmed were at the heart of the company's four-year pattern of fraudulent reporting that existed even before the company went public.

Five-Year-Old Warning Sign

In February 2021, as Jiayuan Technology was in the final stages of preparing for its ChiNext listing, investigative reporting pointed out a clear inconsistency between the growth rates of accounts receivable and revenue. According to the prospectus, revenue for 2017 through the first half of 2020 stood at RMB 78.82 million, RMB 103.25 million, RMB 131.01 million and RMB 94.28 million respectively. While total revenue grew by 66.21% from 2017 to 2019, the book value of accounts receivable jumped an anomalous 194.63% over the same stretch, rising from RMB 44.24 million to RMB 130.34 million.

The ratio of receivables to revenue also climbed steadily, reaching 56.13% in 2017, 98.09% in 2018, 99.49% in 2019 and 101.11% in the first half of 2020. In the first six months of 2020 alone, revenue was just RMB 94.28 million, yet new accounts receivable added reached RMB 60.31 million, equivalent to 63.97% of total revenue for the period. Even more concerning was the rapid expansion of long-aged receivables. Balances for receivables aged over one year were RMB 5.32 million in 2017, RMB 21.03 million in 2018, RMB 55.47 million in 2019 and RMB 47.41 million in the first half of 2020, growing more than 790% during the reporting period. From roughly RMB 5.3 million in 2017 to over RMB 55.4 million in 2019, the increase was approximately 940% in just two years. The proportion of receivables aged over one year jumped from 11.23% in 2017 to 38.81% in 2019.

This shift toward longer-aged receivables painted an increasingly clear picture of deteriorating collection cycles, with the proportion climbing from 11.23% in 2017 to 19.34% in 2018 and then to 38.81% in 2019. Although it eased to 22.93% in the first half of 2020, that was still more than double the 2017 level. Reports at the time warned that elevated accounts receivable meant significant capital was being tied up, with sales not converting into cash inflows in a timely manner, and that any bad debts would impede daily operations. While the company maintained that its clients were mainly government agencies, public institutions and defense industry enterprises with high creditworthiness, it acknowledged that delayed payments or unrecoverable amounts could cause losses to the company. In practice, the rapid growth of receivables and the trend toward longer aging led to continuously rising bad debt provisions that ate into the company's modest asset base. By the end of each reporting period from 2017 through the first half of 2020, bad debt provisions were RMB 3.19 million, RMB 7.48 million, RMB 12.56 million and RMB 16.05 million respectively. In 2019, provisions were equivalent to 5.7% of total assets, rising to 5.96% by the first half of 2020, while their share of net assets reached 8.65% and 8.82% respectively, a stark contrast with comparable companies in the industry. Further inconsistency was uncovered between the IPO prospectus and the company's 2017 and 2018 annual reports from its New Third Board period, including differences of hundreds of thousands of yuan or even over RMB 4 million in purchase amounts recorded for the same suppliers, along with mismatched lists of top five suppliers.

Four Years of Misconduct Revealed

The violations confirmed by the CSRC have validated those earlier concerns. Jiayuan Technology filed its prospectus application on November 30, 2020, disclosed its listing review version on June 25, 2021 and its registration version on January 11, 2022. The company listed on the ChiNext board on January 17, 2022, raising total proceeds of approximately RMB 1.08 billion. The advance penalty notice from the regulator shows that both the 2019 and 2020 financial data in the prospectus and the 2021 and 2022 annual reports contained false records.

The notice details two distinct schemes of revenue inflation. First, starting in 2019, Jiayuan Technology engaged in network information security business with a customer that was its second largest in 2019 and its largest in 2020. In 2019, 2021 and 2022, revenue was recognized ahead of when recognition conditions were properly met. Notably, the company's 2019 revenue from network information security services was RMB 20.16 million, precisely matching the inflated amount for that year. Second, in 2020, the company inserted itself into a purchase-sale transaction chain already in progress between Wuxi Jindu Machinery Equipment Co., Ltd. and Kunming Boyuan Zhongling Technology Co., Ltd., with the relevant transactions lacking commercial substance. Together, these actions resulted in overstatement of revenue by RMB 20.16 million in 2019, understatement by RMB 6.88 million in 2020, overstatement by RMB 28.03 million in 2021 and understatement by RMB 25.62 million in 2022, representing distortions of 15.39%, 3.61%, 8.85% and 9.51% of reported revenue respectively. Total profit was overstated by RMB 16.14 million in 2019, understated by RMB 15.70 million in 2020, overstated by RMB 18.04 million in 2021 and understated by RMB 16.34 million in 2022, distorting reported profit by 44.02%, 25.80%, 16.95% and 24.43% respectively, with the 2019 figure being the most severe at 44.02%.

The CSRC has proposed ordering Jiayuan Technology to rectify the issues, issuing a warning and imposing a fine of RMB 6 million. Chairman Wang Jin, one of the actual controllers, faces a warning and a RMB 3 million fine; former director and deputy general manager Zhu Weihua faces a warning and a RMB 2 million fine; former chief financial officer Liu Xu also faces a warning and a RMB 2 million fine; and former board secretary Yin Mingjun, also an actual controller, faces a warning and a RMB 1.5 million fine.

Deteriorating Post-IPO Performance and Substantial Shareholder Exits

Having gone public on the back of inflated earnings, the company's financial performance has since swung dramatically. From 2022 through 2025, revenue came in at RMB 269.52 million, RMB 227.39 million, RMB 336.80 million and RMB 319.88 million respectively. Apart from 2024, when revenue grew year-on-year, all other years recorded declines ranging from 5.02% to 15.63%. Net profit attributable to shareholders was RMB 61.57 million in 2022, RMB -5.35 million in 2023, RMB 11.45 million in 2024 and RMB -42.95 million in 2025. Simply put, apart from 2024, the company's profitability deteriorated every year after listing, with 2025 seeing a swing from profit to loss as military business revenue fell by RMB 123 million, a 44.74% decline. Overall, the company's bottom line has collapsed from a profit of over RMB 61.57 million to a loss of more than RMB 42.95 million.

Worth noting is that before the penalties were finalized, several major shareholders, including the actual controllers, had already executed large-scale reductions of their holdings, collectively cashing out over RMB 1 billion. Between January and March 2023, shareholder Xiamen Jide Chuangxin reduced its stake by 5.94%, cashing out approximately RMB 436 million. From March to July of the same year, Zhu Weimin, a shareholder holding over 5% and deputy general manager, cut 1.69% of the company, cashing out around RMB 115 million, while Zhu Weihua pared 1.73%, cashing out around RMB 110 million. Between November 2024 and June 2025, Xiamen Xinrui Jiying Venture Capital Partnership executed a complete exit, selling its 3.9% stake for approximately RMB 112 million. From November 11 to November 25, 2025, Zhu Weihua and Zhu Weimin jointly sold 4.40 million shares, cashing out approximately RMB 170 million. In December 2025, Chengdu Jia Duo Ji and Xiamen Jide Chuangxin, acting in concert with Wang Jin, transferred 3.24 million shares through a book-building process, with total proceeds of RMB 129 million. In March 2026, Wang Jin personally transferred 3.88 million shares at RMB 43.59 per share, citing personal funding needs, cashing out approximately RMB 169 million. Some of these selling shareholders are also among those implicated in the proposed penalty for financial fraud.

Looking at the share price, from November 7, 2025 to January 14, 2026, over just 40-plus trading days, the stock surged approximately 150%, hitting an all-time high of RMB 84.48 per share on January 14, 2026. Since then, the price has fallen substantially from those highs, and even before the trading suspension, it had lost most of its gains. After resuming with a one-word limit-down, the stock continued its downward trajectory, with year-to-date losses expanding to nearly 85%. Wind data shows that as of the end of June this year, the company had 20,533 shareholder accounts, down about 8,000 from the end of last year, whereas in the fourth quarter of last year, the number of shareholder accounts had surged by 11,190 quarter-on-quarter. This suggests many investors may have been caught off guard by the revelations.

From the 2021 scrutiny of Jiayuan Technology's anomalous accounts receivable growth to the CSRC's penalty notice in 2026, more than five years have elapsed. This case of four consecutive years of financial fraud serves as another reminder that unusual fluctuations in financial data are often anything but coincidental, with receivables growth that sharply diverges from revenue momentum and rising proportions of long-aged receivables potentially serving as early warning signs of deeper problems.