On July 15th, Tianji New Energy Technology Co., Ltd. (002759.SZ, hereinafter referred to as "Tianji Shares") was issued other risk warnings and renamed as "ST Tianji". At the opening today, Tianji Shares fell by the daily limit down. As of noon closing, Tianji Shares was at 17.75 yuan, a decrease of 9.99%.

Two days ago, Tianji Stock announced that due to false records in its 2023 annual report, the company and related parties received a "Notice of Administrative Penalty" from the Guangdong Securities Regulatory Bureau, and were fined a total of 5.55 million yuan.

The trigger of the incident points to the acquisition of Changshu Xinte Chemical, a subsidiary of Tianji Group, in 2023. Within two months after consolidation, Xinte Chemical confirmed revenue in advance by requiring customers to sign for delivery notes and issue invoices in advance in order to fulfill performance commitments, resulting in an inflated profit of 6.8495 million yuan for Tianji Shares.

This incident is related to other financial issues of Tianji Shares. From receiving administrative regulatory measures in January 2026, to actively correcting accounting errors and being investigated in February, and then receiving prior notice of administrative penalties in July, the problems of Tianji Shares were gradually exposed over a period of about six months. From the initial non-standard impairment testing of goodwill and inaccurate financial accounting, it has evolved into the current financial fraud.

From administrative supervision to administrative punishment

The issue with Tianji Shares was first exposed on January 15th of this year. On that day, Tianji Stock announced that it had received the "Administrative Supervision Measures Decision" from Guangdong Securities Regulatory Bureau and the "Regulatory Letter" from Shenzhen Stock Exchange. Regulatory authorities have pointed out three types of problems with Tianji Shares: firstly, the impairment test of goodwill is not standardized. The sales growth rate forecast for its subsidiary Jiangsu Xintai Material Technology Co., Ltd. in the 2023 goodwill impairment test is not based on sufficient evidence, and the stamp duty forecast is unreasonable. Secondly, the debt capital cost selection for its subsidiary Changshu Yuxiang Trading Co., Ltd. (hereinafter referred to as "Yuxiang Trading", the parent company of Xinte Chemical) in the 2024 goodwill impairment test is inappropriate; The second issue is inaccurate financial accounting, as Tianji Shares and Xinte Chemical did not properly allocate salaries for sales and management personnel from September 2023 to December 2024; Thirdly, the information disclosure is not standardized. From September 2023 to August 2025, Tianji Shares provided financial assistance to non related parties without fulfilling the review procedures and disclosure obligations.

For this reason, the Guangdong Securities Regulatory Bureau has taken corrective measures against Tianji Shares and issued warning letters to Chairman Wu Xidun, Chief Financial Officer Yang Zhixuan, and Secretary Zheng Wenlong.

After receiving the regulatory letter, Tianji Corporation carried out self-examination and self correction. On February 11th, the board of directors of Tianji Co., Ltd. approved the proposal for correcting accounting errors and retrospectively adjusting the financial reports for the third quarter of 2023, 2024, and 2025.

However, correcting accounting errors is not the end point. On the same day, Tianji Shares received a "Notice of Filing" from the China Securities Regulatory Commission and was officially investigated for suspected illegal and irregular information disclosure.

After five months of investigation, on July 13th, the Guangdong Securities Regulatory Bureau issued a "Notice of Administrative Penalty Advance", presenting the full picture of the incident. After investigation, Xinte Chemical was merged into the consolidated financial statements of Tianji Shares in September 2023. From November to December 2023, in order to fulfill performance commitments, Xinte Chemical sold to customers Ganzhou Sanyi and Yongchang Kerui, and confirmed revenue in advance by signing for delivery notes, asking customers to fill out forms in advance, and issuing invoices in advance. This resulted in Tianji Group's 2023 consolidated financial statements inflating operating income by 13.6549 million yuan, operating costs by 6.8054 million yuan, and total profit by 6.8495 million yuan, accounting for 13.33% of the disclosed total profit for the current period.

The Guangdong Securities Regulatory Bureau has determined that Wu Xidun, the then Chairman and General Manager of Tianji Shares, failed to fulfill his duties diligently; Zhou Shuai, the then Vice General Manager of Tianji Corporation, directly participated in the implementation as the Sales Director of Xinte Chemical; The then chairman of Xinte Chemical, Zhi Jianqing, organized and implemented the plan; Yang Zhixuan, the then Chief Financial Officer of Tianji Corporation, did not pay attention to abnormal revenue recognition. Four individuals were identified as directly responsible personnel. Tianji Corporation has been warned and fined 2 million yuan. The four individuals mentioned above have been fined 1 million yuan, 1 million yuan, 1 million yuan, and 550000 yuan respectively, totaling 5.55 million yuan.

For the internal handling plan, the Economic Observer called the Securities Investment Department of Tianji Stock, and one of its staff members said, "The 2025 betting period has ended, and Xinte Chemical has not fulfilled its performance commitments. We should be compensated more than 60 million yuan." As for the follow-up management issues, the staff member pointed out that because Xinte Chemical was a betting period company before, Tianji Stock was difficult to control more. Now Xinte Chemical is a wholly-owned subsidiary of Tianji Group, and there will be some relevant regulations to constrain it. Its finance has now been taken over and controlled by Tianji Group.

The Economic Observer found that in fact, as early as March 2024, after Tianji Shares disclosed its 2023 annual report, the Shenzhen Stock Exchange had questioned Xinte Chemical's achievement of precise performance targets in 2023. At that time, Tianji Corporation disclosed that Xinte Chemical achieved a net profit of 46.4211 million yuan (false data) in 2023, slightly higher than the promised net profit. The Shenzhen Stock Exchange requires Tianji Shares to provide specific information on the sales of products by Xinte Chemical to related parties in 2023; The reasonableness of the performance growth of Xinte Chemical and whether it is consistent with the changing trends of comparable listed companies in the same industry. After receiving a response from Tianji Shares, the regulatory authorities did not further investigate the matter at that time.

Mergers and acquisitions, restructuring, mine laying, performance recovery difficult to conceal ST dilemma

The root cause of this incident can be traced back to a key acquisition completed by Tianji Corporation in 2023. Since the disclosure of this acquisition, doubts from regulatory authorities have persisted.

On August 3, 2023, Tianji Corporation disclosed for the first time that it will acquire Yuxiang Trading, the parent company of Xinte Chemical. Due to multiple of the 8 counterparties working for Tianji Shares or its affiliated companies, this acquisition follows the relevant procedures for related party transactions.

A few days later, the Shenzhen Stock Exchange issued a letter of concern, stating that Yuxiang Trading's total shareholder equity value evaluated using the asset based method was 468 million yuan, with an assessed appreciation of 374 million yuan and a high appreciation rate of 398.20%. The Shenzhen Stock Exchange requires Tianji Shares to explain the rationality of evaluating the high appreciation rate and the fairness of transaction pricing.

Tianji Corporation responded to the attention letter on August 18th. In the end, Tianji Group spent 460 million yuan to complete the acquisition of Yuxiang Trading, achieving indirect 100% control of Xinte Chemical and entering the field of sodium hypophosphite and related phosphate chemicals. The acquisition agreement sets a three-year performance commitment: Xinte Chemical's net profits for 2023, 2024, and 2025 will not be less than 45 million yuan, 50 million yuan, and 55 million yuan respectively, or a cumulative total of not less than 150 million yuan over three years, with a one-time compensation after the commitment period expires.

From the actual completion situation, Xinte Chemical's annual performance commitments have not been met. In 2023, Xinte Chemical's net profit was 39.5716 million yuan (after deducting pre recognized revenue); Net profit of 17.1043 million yuan in 2024; In 2025, it will be 25.7896 million yuan. The three-year commitment has not been fulfilled, and the performance expectations at the time of acquisition have been completely dashed.

At the same time, the overall performance of Tianji Shares has shown significant cyclical fluctuations in recent years. According to public information, Tianji Corporation mainly engages in lithium hexafluorophosphate and related fluorine chemical products. Lithium hexafluorophosphate is the core solute of lithium battery electrolytes, and Tianji Corporation's market share of this product ranks among the top three in the industry. In 2023, the price of lithium hexafluorophosphate declined, and Tianji Corporation's operating revenue was 2.193 billion yuan, a year-on-year decrease of 33.03%. The net profit attributable to the parent company was 36.6409 million yuan, a year-on-year decrease of over 90%. In 2024, with intensified industry competition and further decline in product prices, Tianji Group's revenue was 2.055 billion yuan, and its net profit attributable to the parent company was a loss of 1.361 billion yuan, of which goodwill impairment was as high as 985 million yuan. In 2025, the demand for new energy vehicles and energy storage will grow rapidly, and the price of lithium hexafluorophosphate will rebound from the fourth quarter. Tianji Group's annual revenue was 2.963 billion yuan, a year-on-year increase of 43.28%, and the net profit attributable to the parent company was 82.1813 million yuan, turning losses into profits.

In terms of production capacity, in June 2026, the second phase of the 30000 ton lithium hexafluorophosphate project (15000 tons/year) invested by Tianji Group through private placement will enter trial production. After production, the company's total production capacity will increase from 37000 tons to 52000 tons.

On the same day that other risk warnings were implemented, Tianji Shares disclosed its 2026 semi annual performance forecast, expecting a net profit attributable to the parent company of 220 million to 260 million yuan in the first half of the year, with a loss of 52.3608 million yuan in the same period last year.

From the regulatory questioning of the acquisition case three years ago, to issues such as non-standard impairment testing of goodwill and inaccurate financial accounting at the beginning of this year, to being found to have committed financial fraud, the acquisition of Xinte Chemical, a new energy power battery material field by Tianji Shares, also provides a negative example for the industry's parallel expansion.

(Author Wang Shuaiguo)