Nengte Technology faces another investigation by the China Securities Regulatory Commission, with the stock price hitting the limit-down! The leading vitamin company’s “old wounds” have not healed, and it’s caught in another controversy.

Why did Nentech Technology, which saw a rebound in performance, face another investigation?

Our reporter: Chen Qing Edited by: Du Yu

On April 2, shares of vitamin industry leader Nentech Technology (SZ002102, share price 3.00 yuan, market value 7.427 billion yuan) hit the daily price limit down. On the evening of April 1, the company announced that, due to suspected violations of information disclosure laws and regulations, the China Securities Regulatory Commission (CSRC) decided to file a case for investigation.

This is already the second time Nentech Technology has been subject to a regulatory filing for investigation. In early 2019, when the company was then named “ST Guanfu,” it was also investigated by the CSRC for information disclosure violations, which later triggered claims by more than 1,000 investors.

In 2022, Jingjiang Industrial, a subsidiary under the Jingzhou State-owned Assets Supervision and Administration Commission, took over the company through equity acquisition and a voting rights entrustment. After that, Nentech Technology went through “de-listing the risk designation,” a name change, and relocation. In terms of performance, although the company incurred a loss of 588 million yuan in 2024, it benefited from a sharp surge in vitamin prices, and in 2025 it is expected to achieve a net profit of 200 million yuan~250 million yuan.

Image source: Nentech Technology announcement screenshot

It is also noteworthy that the company’s 2024 annual report has already been issued with a non-standard audit opinion, involving two major sensitive matters: an asset disposal at a discounted price and a goodwill impairment of 745 million yuan.

From thousand-claim compensation to 1.7 billion yuan in funds occupied

Nentech Technology has been listed on the Shenzhen Stock Exchange since before 2006. Its current main business covers three major segments: pharmaceutical intermediates, vitamin E and intermediates, and plastic trading e-commerce, as well as other businesses.

This is not the first time Nentech Technology has faced regulatory investigations. As early as early 2019, when the company was then named “ST Guanfu,” it was also investigated by the CSRC for information disclosure violations.

Two years later, in January 2021, the company announced that it had received an “Administrative Penalty Decision” issued by the Fujian Securities Regulatory Bureau. Upon investigation, ST Guanfu was found to have false records regarding liabilities and assets disclosed in multiple periodic reports, and had failed to disclose external guarantees in its 2018 semi-annual report. The Fujian Securities Regulatory Bureau ordered ST Guanfu to make corrections, issued a warning, and imposed a fine of 300,000 yuan; at the same time, it imposed fines and prohibitions from the market on the relevant responsible persons.

After this incident, 1,075 investors filed compensation claims, with a total claimed amount of 91.6652 million yuan. Of this amount, 91.6585 million yuan was settled in the manner of mediation, settlement, and creditor withdrawal of claims after the courts accepted the cases, while the amount pending settlement during the promotion of settlement was 0.67 million yuan.

However, the gap left by the former controlling shareholder, the “Lin Family,” has not been filled. Due to the Lin Family’s violations, the company previously compensated their debts; as of the end of the first half of 2025, the Lin Family and its related parties were still occupying a total of 1.728 billion yuan of the company’s funds. And because the “Lin Family” is insolvent, the company faces the risk that it may be unable to recover all the compensated debts.

Image source: Nentech Technology announcement screenshot

Against this backdrop, in 2022 Jingjiang Industrial moved into the company through equity acquisition and a voting rights entrustment; in 2023, the company’s registered domicile was moved from Fujian to Jingzhou, Hubei; and in April 2024, it officially changed its name to Nentech Technology.

However, less than two years after the name change, the company again fell into regulatory turmoil. In terms of performance, Nentech Technology expects in 2025 to achieve a net profit attributable to shareholders of 200 million yuan~250 million yuan, a sharp turnaround from a loss of 588 million yuan in 2024. Among them, the vitamin E business of its wholly owned subsidiary Nentech Technology Co., Ltd. (hereinafter referred to as Nentech) is expected to contribute profits of no less than 660 million yuan, becoming the performance pillar.

The substantial profit from the vitamin E business is related to the rise in product prices. According to the 2025 semi-annual report, starting in the second half of 2024, the prices of vitamin E and intermediates began to increase significantly, and the trend of stabilization and rising continued through the reporting period. As a result, Nentech’s vitamin E business saw a significant year-on-year increase in operating performance. In the first half of 2025, the net profit of its equity-invested company Yimante reached 881 million yuan, up 1551.04% from 53 million yuan in the same period last year.

2024 annual report issued with a non-standard opinion

The surface-level recovery in earnings cannot conceal deeper risks. Our reporter from the Daily Economic News noted that Nentech Technology’s 2024 financial report was issued by its auditing institution with a non-standard unqualified opinion that included an emphasis-of-matter paragraph. The “Emphasis of Matter” directly pointed to two key issues: first, the company plans to dispose of non-core main business assets; second, it will recognize a large goodwill impairment of 745 million yuan related to assets in the plastic trading e-commerce business.

Image source: Nentech Technology announcement screenshot

These two matters respectively refer to the company’s former wholly owned subsidiary—Shaanxi Ankang Shenqian Mining Co., Ltd. (hereinafter referred to as Shenqian Mining)—and its current wholly owned subsidiary, Shanghai Sumi Information Technology Co., Ltd. (hereinafter referred to as Shanghai Sumi).

Looking in detail, the disposal process of the 100% equity interest in Shenqian Mining was quite tortuous. After four rounds of listing and transferring, it was ultimately completed at a floor price of 114 million yuan, representing a substantial discount of 38.8% compared with the initial valuation of 186 million yuan. The transaction is expected to directly reduce 48.87 million yuan in profit in 2025.

Shenqian Mining mainly engages in gold mining. Regarding the company’s discounted disposal of this asset during a period of soaring gold prices, the company recently replied on an investor interaction platform that the sale of the 100% equity interest in Shenqian Mining is intended to revitalize existing assets, improve asset operation and capital utilization efficiency, and concentrate resources to develop and strengthen the fine chemical main business.

More worth noting is the “explosion” of goodwill tied to the plastic trading e-commerce business. In 2016, Guanfu Co., Ltd. acquired 100% equity of Shanghai Sumi at a high price of 1.68 billion yuan, entering the plastic trading track. After the acquisition, the company’s revenue surged from 890 million yuan in 2016 to 9.74 billion yuan the following year. Up to 2024, the plastic trade business remained an income support for Nentech— in 2024, the company’s main business revenue was 12.28 billion yuan, of which plastic trading e-commerce contributed 11.178 billion yuan, accounting for as much as 91.33%; but its gross profit was only 0.46 billion yuan, accounting for 19.58% of the company’s overall gross profit of 2.33 billion yuan.

It is against this backdrop that Nentech Technology made a full provision for goodwill impairment of 745 million yuan for Shanghai Sumi’s asset group, directly resulting in a loss of 588 million yuan in 2024. The company explained that the main reason was the impact of the industry environment: the difficulty of developing the plastic trading e-commerce business increased, and profitability continued to decline.

Regarding the CSRC’s case-filing investigation matters, on April 2, a reporter from the Daily Economic News called Nentech Technology’s securities department. The staff said there was no information disclosure beyond what was stated in the announcement.

Nentech Technology’s announcement states: “At present, all of the company’s production and operating activities are normal and orderly. During the investigation period, the company will actively cooperate with the CSRC’s investigation.”

Daily Economic News