*ST Xingnong faces administrative penalties for financial fraud, with a high risk of delisting and investor compensation claims hanging in the balance

What are the key time points for the delisting risk of *ST Xingnong?

Recently, *ST Xingnong (603789) announced that the company received the “Administrative Penalty Decision” from the Zhejiang Securities Regulatory Bureau on March 30.

Lawyer Liu Peng from Shanghai Huzhi Law Firm pointed out that, given that the company’s violations have been identified, legal procedures for investor claims for damages have been initiated. Currently, it is judged that investors who buy *ST Xingnong shares between April 30, 2024, and September 26, 2025 (inclusive), and hold these shares until the close of trading on September 26, 2025, have the opportunity to file claims against the company. Investors meeting the above conditions can register for claims through the public account “Dazhong Securities News” (feature code: 11), with final claim conditions subject to court determination.

According to the “Administrative Penalty Decision,” regulators found that in 2023, *ST Xingnong’s wholly owned subsidiary Xingguang Zhiyuan engaged in false activities such as cotton harvesting, consulting services, and promotional services, artificially inflating operating income by 60.7274 million yuan, accounting for 19.69% of the disclosed operating income for that period; and inflating total profits by 5.2895 million yuan, accounting for 9.77% of the disclosed profit total for that period. These behaviors led to false records in the company’s 2023 annual report.

Until September 27, 2025, *ST Xingnong issued an “Announcement on the Correction and Retroactive Adjustment of Previous Accounting Errors,” which retrospectively adjusted the aforementioned financial data.

Based on these facts, Zhejiang Securities Regulatory Bureau issued a warning to *ST Xingnong and imposed a fine of 2.5 million yuan; warned four responsible personnel and fined each between 800k and 1.2 million yuan. The company and the four responsible individuals were collectively fined 6.9 million yuan.

Due to the same issue, the Shanghai Stock Exchange simultaneously issued a public reprimand decision against *ST Xingnong, publicly criticizing the company and the four responsible personnel, and recording the matter in the securities and futures market integrity archive.

In addition to the penalties for information disclosure violations, *ST Xingnong also faces delisting risks. Because the company’s audited net profit before and after deducting non-recurring gains and losses for 2024 is negative, and after deducting income unrelated to core business and income without commercial substance, the operating income is below 300 million yuan, the company’s stock has been under delisting risk warning since May 6, 2025. If the company’s 2025 annual report shows circumstances specified in Article 9.3.7 of the Shanghai Stock Exchange Stock Listing Rules, the company’s stock may be delisted by the SSE.