On April 30, 2026, Wuliangye Yibin Co.,Ltd. released its 2025 annual report, revealing a 54.55% decline in full-year revenue and a 71.89% drop in net profit. This significant performance downturn stemmed primarily from a "correction of prior-period accounting errors." Following the correction, the company's revenue for the first three quarters of 2025 was revised down from RMB 60.945 billion to RMB 30.638 billion, while net profit fell from RMB 21.511 billion to RMB 6.475 billion.
The report triggered a major market uproar, raising widespread questions about the quality of the company's information disclosure, potential "financial bath" practices, revenue recognition principles, possible infringement of investor rights to information, and whether the auditing firm had fulfilled its due diligence responsibilities.
Since April 30, Wuliangye's stock price has experienced a continuous decline, with an overall drop exceeding 13%. Measured from its peak in February 2021, the share price has now fallen by 70%.
The adjustments made by Wuliangye involved revisions to certain items in the consolidated balance sheets and consolidated income statements for Q1, H1, and Q3 of 2025 that had been previously disclosed.
For the first three quarters overall, post-correction revenue was reduced from RMB 60.945 billion to RMB 30.638 billion, and net profit was lowered from RMB 21.511 billion to RMB 6.475 billion. Specifically for Q1 2025, revenue and net profit attributable to shareholders were adjusted down from RMB 36.940 billion and RMB 14.860 billion to RMB 17.086 billion and RMB 4.416 billion, respectively. This adjustment was also a key factor behind the reported high growth in Q1 2026 performance.
In its announcement, Wuliangye characterized the changes as "corrections of accounting errors," stating it had "reviewed the 2025 business model and, based on the principle of prudence, adjusted the accounting related to revenue recognition for certain 2025 businesses." However, this vaguely explained retrospective adjustment has fueled further market skepticism, focusing on several key issues.
Firstly, is this adjustment truly a correction of prior errors or a change in accounting policy? Secondly, why was the revision applied selectively only to data from Q1 to Q3 2025, without adjusting the financial statements for 2024 and earlier years?
Finally, a core question emerged: what exactly is Wuliangye's revenue recognition principle? According to the annual report disclosure, the company's revenue recognition policy remained entirely consistent for both 2024 and 2025. In the absence of changes to accounting policies or estimates, or any major accounting errors, what explains such a vast discrepancy in reported revenue before and after the adjustment?
Concurrently with the revenue recognition adjustment, Wuliangye introduced two new line items: "Regulated Commodity Payments" of RMB 26.315 billion (under other current liabilities) and "Regulated Commodities" of RMB 4.907 billion (under other current assets). These additions have sparked market speculation, with some views suggesting the adjustment essentially shifted the revenue recognition point from the traditional "upon shipment" to "upon final sale to the end customer" or "after transfer of control to the end customer." The exact details may require further disclosure from Wuliangye.
In fact, the A-share market has seen several listed companies penalized in recent years for revenue recognition errors or retrospective adjustments. In April 2026, Xinghua Co., Ltd. disclosed that its controlled subsidiary, Yushen Energy Chemical, had inaccurately recognized revenue, measured production, and estimated manufacturing costs from 2024 through Q3 2025, leading to misstatements in its disclosed financial reports for those periods. The company was subsequently placed under investigation by the China Securities Regulatory Commission (CSRC) and was designated with Special Treatment (ST) on May 6, 2026. Also in April 2026, Suwen Electric Energy Co., Ltd. was subject to a rectification order from the Jiangsu Securities Regulatory Bureau and received a regulatory letter from the exchange due to errors in applying its revenue recognition method, which resulted in accounting errors across multiple reporting periods.
Wuliangye's retrospective adjustment has also placed its auditing firm, Tianzhi International Certified Public Accountants LLP, under intense scrutiny.
In 2024, in accordance with regulations stipulating that state-owned enterprises and listed companies should generally not engage the same accounting firm for more than eight consecutive years, Wuliangye changed its auditor to Tianzhi International.
For Wuliangye's 2025 annual audit report and internal control audit report, Tianzhi International issued unqualified opinions. However, investors remain unconvinced, questioning how a company that lacked sufficient prudence in revenue recognition for the first nine months—requiring a major year-end correction for that period—can claim effective internal controls. They also question the effectiveness of internal controls at a company that revised its revenue down by 50%.
According to Wind data, Tianzhi International charged an audit fee of RMB 1.99 million for both 2024 and 2025 services for Wuliangye, totaling RMB 3.98 million. This fee ranks second among listed liquor companies, just behind the RMB 2.238 million charged to Yanghe Brewery Joint-Stock Co., Ltd. Beyond Wuliangye, Tianzhi International also serves as the auditor for Jiugui Liquor Co., Ltd. and Jiangsu King's Luck Brewery Joint-Stock Co., Ltd., charging audit fees of RMB 1.20 million and RMB 980,000, respectively, in 2025.
Intermediaries like audit firms are often regarded as gatekeepers of the securities market, and regulators have consistently emphasized the need to reinforce their responsibilities. In the case of Wuliangye's adjustment, whether Tianzhi International exercised due professional care has become a central point of market debate.
It is noteworthy that Tianzhi International has faced multiple penalties in recent years. In February 2026, the Shanghai Stock Exchange issued regulatory warnings to three of the firm's signing accountants—Yan Lei, Zeng Chunwei, and Feng Jianzhuan—for audit violations related to the STAR Market listing application project of Hunan Kylin Information Technology Co., Ltd. Among them, Yan Lei is not only a managing partner at Tianzhi International but also a key figure in the firm's securities business practice.
In August 2024, for failing to diligently perform its duties in the annual audit of Shenzhen Qixin Group Co., Ltd. and producing an audit report containing false records, Tianzhi International was ordered by the CSRC to make corrections, given a warning, fined approximately RMB 23.3962 million, had its business income of about RMB 3.6792 million confiscated, and was suspended from providing securities service-related business for six months. Some analyses suggest that during its long-term audit engagement with Shenzhen Qixin Group, Tianzhi International acted as an enabler for financial fraud.
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