Recent scrutiny has fallen on Jiayuan Technology (佳缘科技) following revelations of financial misconduct that allegedly occurred both before and after its listing. The company's prolonged accounting irregularities have now triggered the special treatment (ST) designation under exchange rules, resulting in its stock name being changed from "Jiayuan Technology" to "ST Jiayuan" to flag the increased risk.
Systematic Fraud Spanning Four Years Around IPO
The China Securities Regulatory Commission (CSRC) launched an investigation into Jiayuan Technology on July 8, 2026, citing suspected violations of information disclosure regulations. By August 21 of the same year, the company had received an advance notice of administrative penalties. The investigation uncovered falsified financial data in both the company's IPO prospectus and its post-listing annual reports, with the 2019 and 2020 figures in the prospectus, as well as the 2021 and 2022 annual report contents, containing material misstatements.
According to official announcements, starting in 2019, the company entered into a network information security business relationship with a key client who ranked as its second-largest customer in 2019 and largest in 2020. Between 2019 and 2022, Jiayuan Technology signed multiple research contracts and electronic product procurement agreements with this client, recognizing revenue before meeting the required conditions for revenue recognition. Additionally, in 2020, the company inserted itself into an ongoing purchase-sale business chain between Wuxi Jindu and Kunming Boyuan, with these transactions lacking genuine commercial substance. These actions resulted in the inflation and deflation of reported revenue and profits from 2019 through 2022, with revenue overstated by 20.156 million yuan in 2019, understated by 6.8765 million yuan in 2020, overstated by 28.0338 million yuan in 2021, and understated by 25.6247 million yuan in 2022, representing 15.39%, 3.61%, 8.85%, and 9.51% of the reported revenue figures respectively. Total profit was similarly distorted, with overstatements of 16.1384 million yuan in 2019 and 18.0393 million yuan in 2021, and understatements of 15.696 million yuan in 2020 and 16.3445 million yuan in 2022, equating to 44.02%, 25.80%, 16.95%, and 24.43% of reported profit totals respectively.
Performance Reversal and Surging Pre-IPO Customer Revenue Raise Red Flags
Jiayuan Technology, headquartered in Chengdu's High-Tech Zone, specializes in network information security products, integrated information solutions, and artificial intelligence services, focusing on defense, government enterprise services, and healthcare sectors. The company's pre-IPO performance showed exceptional growth, with 2021 revenue exceeding 300 million yuan and growth rates of 66.27%, alongside net profit of 96 million yuan representing over 76% year-on-year growth. However, following its January 17, 2022 listing on the ChiNext board of the Shenzhen Stock Exchange, performance deteriorated sharply, with revenue declining approximately 15% annually in 2022 and 2023, while net profit plummeted by 33.92% and 109.42% respectively. The company's 2026 semi-annual report revealed even more dire figures, with first-half revenue of 56.8492 million yuan reflecting a 65.93% decline, and a net loss attributable to shareholders of 67.2711 million yuan, a massive 1329.66% deterioration.
The IPO application year saw a dramatic surge in revenue concentration from top customers, with the top five accounting for 66.28%, 55.10%, and 74.56% of total revenue from 2018 to 2020 respectively. Notably, revenue from Customer A jumped from 20.156 million yuan (15.39% of revenue) in 2019 to 48.188 million yuan (25.29% of revenue) in 2020. This anomaly did not escape regulatory attention, as exchange inquiries sought explanations for both the revenue surge and subsequent contract adjustments. The company attributed the 2020 concentration to rapid growth in its network information security business and completion of two major government and enterprise projects, including the Sichuan Province Transportation Operation Monitoring and Emergency Command System Phase II and a product procurement project for Wuxi Jindu Mechanical Equipment Co., Ltd., contributing 10.04% and 6.97% of revenue respectively. Regarding contract adjustments, the company maintained these stemmed from client requirement changes, with adjustments booked in the current period as required by accounting standards.
Intermediary Liability: What Risks Do CITIC SEC and BDO Face?
Jiayuan Technology's January 2022 ChiNext IPO involved issuing 23.0733 million shares at 46.80 yuan per share, with CITIC Securities Company Limited (600030) serving as sponsor and lead underwriter, represented by Ma Zheng and Ju Hongcheng. BDO Li Xin (立信会计师事务所) acted as the audit firm. The offering raised gross proceeds of 1.08 billion yuan, with net proceeds of 995 million yuan after deducting issuance costs of 84.8376 million yuan, of which CITIC SEC received 64.7898 million yuan in sponsorship and underwriting fees.
The current administrative penalty notice targets Jiayuan Technology and four responsible individuals including Wang Jin, with aggregate fines of 14.5 million yuan. However, no formal administrative determination has been made against CITIC Securities Company Limited as sponsor. Given that the fraud directly affects financial data within the IPO prospectus period, questions arise regarding whether the sponsor and lead underwriter failed to exercise due diligence and whether they potentially facilitated fraudulent issuance. Under Article 182 of the Securities Law, sponsors issuing false documents or failing to perform statutory duties face warnings, confiscation of business income, fines ranging from one to ten times that income, and potential suspension or revocation of sponsorship business licenses in severe cases. Similarly, the Measures for the Administration of Sponsorship Business for Securities Issuance and Listing stipulates that sponsors submitting documents with false records or assisting issuers in such submissions may face suspension of sponsorship business for three to thirty-six months, with revocation of qualifications for particularly serious violations.
The broader regulatory environment for capital market financial fraud has intensified significantly, with enforcement now adopting a "pursue the primary wrongdoer and punish the accomplices" approach targeting the entire chain of misconduct. Administrative, criminal, and civil liability mechanisms have been integrated into a three-dimensional accountability framework, while regulatory focus has shifted from purely retrospective punishment to full-cycle governance spanning pre-incident, during-incident, and post-incident oversight. Cross-departmental coordination continues to deepen, establishing a normalized, long-term comprehensive prevention and punishment system aimed at creating a market ecosystem where fraud is not dared, cannot, and will not occur.
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