Crossing the red line: the growth dilemma of Weiwei Corporation

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（Source: Beijing Business Daily）

Recently, Weiwei Co., Ltd. issued an announcement saying that it received two regulatory documents from the Jiangsu Securities Regulatory Bureau and the Shanghai Stock Exchange, both because it improperly applied revenue recognition methods for certain grain and oil trading business income from 2022 to 2024, resulting in inaccurate disclosures of revenue and costs in its regular reports for three consecutive years. The Shanghai Stock Exchange issued a regulatory warning to Weiwei Co., Ltd. and three senior executives of the company. Analysts noted that this information disclosure violation reflects that Weiwei’s financial internal controls were off in judging the substance of the business; amid overlapping external competitive pressures and internal structural issues, Weiwei has fallen into a growth predicament.

Information disclosure violations

On April 3, 2026, the “Decision on Administrative Regulatory Measures” (hereinafter referred to as the “Decision Document”) issued by the Jiangsu Securities Regulatory Bureau to Weiwei Co., Ltd. shows that from 2022 to 2024, Weiwei Co., Ltd. applied inappropriate methods—using the gross method and the net method—for revenue recognition of certain grain and oil trading business income, which did not comply with Article 34 of the “Accounting Standards for Business Enterprises No. 14—Revenue.” This led to inaccurate disclosure of operating revenue and operating costs in the company’s Q1, H1, and Q3 reports of 2022, 2023, and 2024.

After that, Weiwei Co., Ltd. issued the “Announcement on Correction of Prior Accounting Errors,” stating that it correspondingly reduced operating revenue and operating costs for Q1 2022 by about RMB 117 million, increased operating revenue and operating costs for H1 2022 by about RMB 31.3605 million, and reduced operating revenue and operating costs for Q3 2022 by about RMB 105.6 million; it reduced operating revenue and operating costs for Q1 2023 by about RMB 129 million, reduced operating revenue and operating costs for H1 2023 by about RMB 247 million, and reduced operating revenue and operating costs for Q3 2023 by about RMB 448 million; it reduced operating revenue and operating costs for Q1 2024 by about RMB 126 million, reduced operating revenue and operating costs for H1 2024 by about RMB 71.9116 million, and increased operating revenue and operating costs for Q3 2024 by about RMB 33.7055 million.

The “Decision Document” shows that the above conduct of Weiwei Co., Ltd. violated the provisions of Article 3, Paragraph 1 of the “Administrative Measures for Information Disclosure of Listed Companies” (CSRC Order No. 182; hereinafter referred to as the “Information Disclosure Measures”). The company’s chairman Ren Dong, general manager Zhao Huieqing, and chief financial officer Zhao Changlei failed to perform their duties diligently and responsibly, violating the provisions of Article 4 of the “Information Disclosure Measures,” and bear the primary responsibility for the above violations. Meanwhile, in accordance with the provisions of Article 52 of the “Information Disclosure Measures,” the Jiangsu Securities Regulatory Bureau decided to take an administrative regulatory measure of ordering rectification against Weiwei Co., Ltd., take an administrative regulatory measure of issuing a regulatory warning letter against Ren Dong, Zhao Huieqing, and Zhao Changlei, and record it in the integrity dossier for the securities and futures market.

On the same day, the Shanghai Stock Exchange issued the “Decision on Issuing a Regulatory Warning to Weiwei Foods & Beverages Co., Ltd. and Relevant Parties.” “Regular reports of listed companies are an important basis for investors’ investment decisions. A company shall, in accordance with relevant requirements, adopt reasonable accounting treatment methods for production and operating activities during the reporting period, and ensure that the information disclosed in regular reports is true, accurate, and complete.” The Shanghai Stock Exchange said.

Weiwei Co., Ltd. stated, “This correction of prior accounting errors and retrospective adjustments will not affect the company’s financial condition and operating results, such as the total assets, total liabilities, net assets, net profit attributable to shareholders of listed companies, and net cash flow from operating activities.”

Regarding related issues concerning the information disclosure violation, a reporter from Beijing Business Daily sent an interview request letter to Weiwei Co., Ltd. via email, but it was returned and indicated “the email content was rejected.”

Famous strategic positioning expert Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting, said in an interview with a reporter from Beijing Business Daily that, “The core difference between the gross method and the net method lies in whether the enterprise obtains control of the goods and assumes risks. Weiwei’s improper revenue recognition leading to inaccurate revenue and cost disclosures reflects that the financial internal controls were off in judging the substance of the business—especially that there were serious oversights in contract review for grain and oil trading, revenue recognition rule implementation, and audit oversight.”

Not the first time

This is not the first time that Weiwei Co., Ltd. has been issued a warning letter due to information disclosure issues.

On March 25, 2023, the Jiangsu Securities Regulatory Bureau issued a decision to require rectification measures for Weiwei Co., Ltd., with the reason being: “In July 2022, Weiwei Co., Ltd., Xuzhou Xinsheng Investment Holding Group Co., Ltd. (hereinafter referred to as ‘Xinsheng Group’), and Unicom Tongbao Capital Investment Co., Ltd. (hereinafter referred to as ‘Unicom Investment’) jointly invested to establish an industrial investment fund, Xuzhou Weiwei Shengtong New Consumption Investment Fund (Limited Partnership). On August 30, 2022, the fund completed its filing with the Asset Management Association of China, but Weiwei Co., Ltd. failed to disclose this important progress at the time the fund completed the filing and registration, in violation of Article 41 of the “Shanghai Stock Exchange Listed Company Self-Regulatory Guidance No. 5—Transactions and Related Parties” (SSE Regulatory [2022] No. 6). The above conduct violated the provisions of Article 3 and Article 25 of the ‘Administrative Measures for Information Disclosure of Listed Companies’ (CSRC Order No. 182).”

In July 2022, the Shanghai Stock Exchange also issued a regulatory warning decision to the shareholder of Weiwei Co., Ltd., Weiwei Group Co., Ltd. (hereinafter referred to as ‘Weiwei Group’). The reason was that after signing the “Share Transfer Agreement” with Xinsheng Group, Weiwei Group failed to fulfill, in advance, the duty to pre-disclose the reduction of holdings 15 trading days before, as required.

Weiwei Co., Ltd. is a large cross-regional and cross-industry enterprise group mainly centered on “ecological agriculture, large grains, and large food.” Its current controlling shareholder is Xinsheng Group, with a 30.91% shareholding. Its main products include plant protein beverage series such as ‘Weiwei’ brand soy milk powder and liquid soy milk; ‘Weiwei Liuchao Song’ flour series products; ‘Tianshan Snow’ dairy products; and ‘Yiqingyuan’ tea series. It also has a liquor trade platform company, Míngjiǔfāng Co., Ltd., whose main business focuses on proprietary brands such as ‘Hàn Yuán,’ and agency brands such as ‘Shuanggou’ among other well-known liquor brands. For many years, Weiwei soy milk powder has consistently maintained a leading position in the industry, with production and sales volumes ranking first in the industry for many consecutive years, and it has earned the title of “King of Soy Milk” in China.

Senior dairy industry analyst Song Liang said, “In recent years, business operating pressure has been relatively high. For certain listed companies, to maintain growth in performance, they may ‘increase’ revenue or ‘reduce’ costs financially. For example, accelerating depreciation of fixed assets would increase net profit.”

Growth predicament

As a leading listed company in plant protein beverage, after Xinsheng Group took control of Weiwei Co., Ltd. in 2021, it proposed a strategy of “ecological agriculture, large grains, and large food,” attempting to develop grain acquisition, warehousing, processing, and trading, as well as healthy food production, through a ‘dual-engine drive’ while expanding liquid soy milk.

According to Weiwei Co., Ltd.’s official website, it has successively cooperated with large grain enterprises at home and abroad. In the premium wheat main producing areas of the Huaibei economic region, the small-grain peanut main producing areas of southern Henan, the non-GMO soybean main producing areas of Heilongjiang Suibian, and the premium rice producing area of Jiamusi, it built modern grain logistics parks, forming a modern comprehensive grain industrial park integrating collection and storage, processing, and trading. In 2019, the Weiwei grain logistics industrial park located in Xuzhou was approved as a provincial-level grain logistics park in Jiangsu Province.

Regarding Xinsheng Group’s investment, Weiwei Co., Ltd. previously said that since Xinsheng Group entered, it has coordinated its own high-quality resources, leveraged the synergy effect with the company’s business development, and enhanced the company’s core competitiveness. By establishing a food and beverage and modern agriculture industry investment fund together with Xinsheng Group and Unicom Investment, with Weiwei Co., Ltd.’s main business, the upstream and downstream of the industry chain, and future strategic plans as the core, it focuses investment on areas such as food and beverage, new consumption, and agriculture.

It is worth noting that in recent years, the performance of four industry giants in the plant-based beverage sector—Weiwei Co., Ltd., Chengde Lulufu, Yangyuan Beverage, and Huanlejia—has also been “not very strong.” The financial reports show that in 2025, Huanlejia achieved revenue of about RMB 1.5 billion, down 19.11% year over year; it achieved attributable net profit of about RMB 44.17 million, down 70.03% year over year. In the first three quarters of 2025, Chengde Lulufu achieved revenue of about RMB 1.96B, down 9.42% year over year; attributable net profit was about RMB 384 million, down 8.47% year over year. In the first three quarters of 2025, Yangyuan Beverage achieved revenue of about RMB 3.9B, down 7.64% year over year; attributable net profit was about RMB 1.12B, down 8.95% year over year. Weiwei Co., Ltd. even saw revenue decline for five consecutive years from 2020 to 2024. In the first three quarters of 2025, it achieved revenue of about RMB 2.39B, down 11.2% year over year; attributable net profit was about RMB 241 million, down 1.93%.

Song Liang said, “When revenue declines in plant-based beverage companies, one reason is that as channels become fragmented and consumers become more individual and scenario-driven, some in-house brands have developed rapidly. The second is that ready-to-drink products replace traditional standardized products. For a traditional manufacturing company like Weiwei Co., Ltd., the only way to increase revenue is to expand into new areas, but judging from the current situation, the difficulty of expanding into new areas is very high.”

Beijing Business Daily reporter Kong Wenxie

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