Nanxin Pharmaceutical has been found to have disclosed inaccurate financial data in its annual report. On August 13, 2026, the company officially received the Administrative Penalty Decision issued by the Hunan Regulatory Bureau of the China Securities Regulatory Commission, with the violations related to the 2023 annual report. The issue primarily originated from its controlling subsidiary, Guangzhou Nanxin.

Investigations revealed irregularities in revenue recognition and profit calculation, ultimately resulting in inflated operating revenue and total profit reported in the 2023 annual report. Specifically, when certain customers returned goods, the company failed to promptly reduce the associated revenue and profit as required, leading to an overstatement of operating revenue by 44.3588 million yuan and total profit by 9.0877 million yuan. Additionally, after signing Accounts Receivable Agreements with customers, the company did not appropriately offset revenue once the agreed cash discounts took effect, causing a further overstatement of operating revenue by 20.324 million yuan and total profit by 2.8645 million yuan.

Combined, the 2023 operating revenue was inflated by 64.6828 million yuan, representing 8.69% of the reported revenue for that year, while total profit was inflated by 11.9522 million yuan, accounting for 157.11% of the reported total profit for the period. Based on the impact identified in the penalty, the adjusted profit amount exceeds the company's reported total profit for the period. In other words, without the inflated profits, the company's 2023 performance would have shifted from profitability to a loss, and such disclosure issues may have influenced investor decision-making.

Currently, the legal team led by Lawyer Liu Peng of Shanghai Huzi Law Firm has received compensation registrations from thousands of investors. Based on current eligibility criteria, investors who purchased Nanxin Pharmaceutical shares between March 26, 2024, and September 30, 2025 (inclusive), and sold or continued to hold them after October 1, 2025, incurring losses, may monitor upcoming compensation arrangements.

Under relevant judicial interpretations, if a listed company causes investor losses through false statements, eligible investors can claim compensation in accordance with the law. This typically covers investment difference losses, as well as commission, stamp duty, and other losses calculated per legal standards, with the final compensation amount to be determined based on case specifics.