Unlisted revenue has declined for two consecutive years, and Zhengda Seed Industry faces doubts about its disclosure. Is the annual capacity really 30k tons or 50k tons? | Understanding IPO

Ask AI · Does the disclosure contradictions of Zhengda Seed Co., Ltd. reflect internal management issues?

Source | Times Business Research Institute

Author | Lu Shuoyi

Editor | Zheng Lin

Behind the controlling shareholder, the Thai Xie family has come into view. Zhengda Seed Co., Ltd. (hereinafter “Zhengda Seed”) is pushing forward with its IPO on the Beijing Stock Exchange.

The Beijing Stock Exchange website shows that on March 13, 2026, Zhengda Seed had already passed the first issuance review. This is only 8 months after its IPO application was accepted.

The prospectus shows that Zhengda Seed is a seed company mainly engaged in corn seed R&D, production, and sales, an integrated “breeding, multiplication, production, and promotion” seed business with a complete R&D, production, sales, promotion, and service system. For this IPO, the company plans to raise RMB 283 million, of which RMB 234 million will be used to build a seed processing center in Yunnan.

It should be noted that Zhengda Seed’s disclosures contain contradictions. In particular, its capacity disclosure differs significantly from the figures the company previously publicized externally; the quality of its disclosures is worth关注. In addition, during the reporting period, Zhengda Seed’s overall capacity utilization rate declined, falling to less than 20% in the first half of 2025. Against this backdrop, the company still intends to raise funds to expand production; the necessity and rationality remain to be assessed.

On March 12, the Times Business Research Institute sent an email and made a phone call to Zhengda Seed to ask about issues including the quality of the company’s information disclosure, the authenticity of revenue, the reasonableness of the “no ultimate controlling person” determination, and the fund-raising projects for investment. On March 12, Zhengda Seed told the Times Business Research Institute that it should follow the relevant announcement information published by the company.

Behind the controlling shareholder, the Thai Xie family has come into view, with multiple doubts appearing in its disclosures

The prospectus shows that as of the date of signing the prospectus (March 6, 2026), Cofeed Group Co., Ltd. (hereinafter “Cofeed Group”) directly holds 33.99% of Zhengda Seed’s shares, and indirectly holds 27.76% of its shares by controlling Cofeed Animal Husbandry Investment. Cofeed Group is Zhengda Seed’s controlling shareholder.

Cofeed Group was registered and established in Thailand in 1976. Currently, its core businesses are agricultural and livestock food, wholesale and retail, and telecom communications. It is also involved in industries such as finance, real estate, pharmaceuticals, and machinery processing. It is a diversified multinational group, with operations spanning more than 100 countries and regions worldwide.

Cofeed Group’s major shareholders are the Xie Zhengmin family, the Xie Damin family, the Xie Zhongmin family, and the Xie Guomin family, holding 12.76%, 12.63%, 12.96%, and 12.96% respectively. Among them, Xie Zhengmin, Xie Damin, Xie Zhongmin, and Xie Guomin are siblings; however, there is no concerted action relationship among these four families. The proportion of shares held or controlled by any one shareholder of Cofeed Group does not exceed 13%. During the reporting period, there is no ultimate controlling person. Therefore, Zhengda Seed also has no ultimate controlling person.

However, in the progress of Zhengda Seed’s IPO, multiple doubts have emerged in its disclosures, and the quality of the disclosures is worth关注.

The prospectus shows that after nearly 30 years of operations and accumulation, Zhengda Seed’s annual seed-making area has remained stable at more than 40k mu, its annual production and processing capacity is 30k tons, and its sales network covers 27 provinces nationwide.

But the Times Business Research Institute found that an article published by the Yichang Agricultural and Rural Bureau in July 2022 titled “Zhengda Seed: Striving to Be Among the Top Three Corn Seed Companies Nationwide” includes a quote from Zhengda Seed’s deputy general manager Wang Yong: “When capacity is maxed out, we can produce 50k tons of corn seed per year.”

From this calculation, compared with the capacity figures disclosed in Zhengda Seed’s prospectus and the previously disclosed company external disclosure figures, the discrepancy rate is as high as 67%.

In addition, the number of employees disclosed by Zhengda Seed also differs across different documents.

The prospectus shows that at the end of 2022, Zhengda Seed had 209 employees; while a public transfer description published by the company in June 2024 shows that at the end of 2022, the company had 207 employees; the Tianyancha APP shows that in 2022, the number of insured participants was 217.

Moreover, the 2025 semiannual report disclosed in August 2025 shows that as of the end of June 2025, among Zhengda Seed’s 220 employees, there were 28 management personnel, 65 sales personnel, and 86 production personnel. However, in September 2025, the company published a correction announcement: after the correction, for the same period end, there were 25 management personnel, 69 sales personnel, and 85 production personnel.

Not only that, Zhengda Seed also shows situations where data from suppliers “conflict.” In the reply to the first round of questions, it is shown that in 2022, Zhengda Seed’s purchase amount from Wenzhou Huazheng Packaging Co., Ltd. (hereinafter “Huazheng Shares”) was RMB 2.2164 million. But Huazheng Shares’ annual report for the same period shows that the sales amount to that company was only RMB 1.8626 million, and the difference is RMB 353.8k.

Some customers leaving leads to an increase in return rate; capacity utilization still declines, yet the company still wants to expand production

The downtrend in revenue has not yet been reversed. In the first half of 2025, the capacity utilization rate fell to less than 20%, and the necessity of Zhengda Seed’s fund-raising to expand production is also worth关注.

The file for the reply to the second round of questions shows that compared with the 2021–2022 sales seasons, in the 2024–2025 sales season, Zhengda Seed’s return rate rose from 4.95% to 13.74%, and the return amount increased from RMB 8.8296 million to RMB 57.4084 million.

In the file for the company’s reply to the second round of questions, Zhengda Seed stated that in the 2022–2023 sales seasons, the company’s return rate increased by 3.87 percentage points, mainly because: on the one hand, the situation of overall industry supply tightness had been alleviated, and the return rate in the company’s core market in Southwest China accordingly increased by 3.01 percentage points, driving the overall return rate higher; on the other hand, the return rate in the Northwest region increased by about 5.97 percentage points, and the scale of returns increased by 189.50 tons. The main reasons for the increase in the return rate in the Northwest region were that some customers in that region, such as Li Wenbin, stopped cooperating, and some other customers, such as Wang Dazhi and the Qishan County Vegetable Research Institute, experienced fiercer competition in the markets where they were located, resulting in more returns. In the 2023–2024 sales seasons and the 2024–2025 sales seasons, the company’s return rate increased mainly due to factors including the decline in corn spot prices and abnormal drought conditions in some regions.

Against this backdrop, Zhengda Seed’s performance is not stable, and there is even a situation where its performance declines before it even becomes listed.

According to the prospectus and the 2025 financial reports disclosed by Zhengda Seed on the National Equities Exchange and Quotations (NEEQ), for 2022–2025 (with the 2025 data being unaudited), Zhengda Seed’s revenue was RMB 319 million, RMB 409 million, RMB 380 million, and RMB 361 million respectively; its net profits were RMB 95 million, RMB 88 million, RMB 81 million, and RMB 91 million respectively.

Wind data shows that from 2023 to 2025, Zhengda Seed’s year-on-year revenue growth rates were 28.30%, -6.95%, and -5.12% respectively; and its year-on-year net profit growth rates were -6.61%, -8.25%, and 11.85% respectively. Although net profit in 2025 has returned to an upward track, it is still lower than in 2022, and the trend of revenue decline has not yet been reversed.

With performance declining, Zhengda Seed’s capacity utilization rate has also fallen significantly.

For 2022 to 2025 (first half), based on the 30k-ton capacity stated in the prospectus, Zhengda Seed’s capacity utilization rate was 63.12%, 66.05%, 59.94%, and 18.43% respectively; if calculated based on its previously claimed 50k-ton capacity, it would be only 37.87%, 39.63%, 35.96%, and 11.06%. Overall, Zhengda Seed’s capacity utilization rate has fallen sharply; in the first half of 2025 it dropped to less than 20%, implying that a large amount of capacity may be idle.

Regarding the sharp decline in capacity utilization in the first half of 2025, Zhengda Seed stated in the file of its reply to the second round of questions that the company’s processing season is constrained by the raw material harvesting season and thus has significant seasonality. Since the first half of the calendar year is not the peak processing season for seed enterprises, the company’s most recent period’s capacity utilization rate is lower than the full-year capacity utilization rate of historical years.

It should be noted that in the draft prospectus submission, Zhengda Seed planned to raise RMB 363 million, to be used for the Yunnan seed processing center, the Zhangye seed processing phase-two project, and the construction of the Yichang core experimental station. After the Beijing Stock Exchange asked two rounds of questions about the rationality of the fund-raising investment projects, in the prospectus reply, Zhengda Seed cut the construction of the Yichang core experimental station, but still intends to raise RMB 283 million, of which RMB 234 million will be used to build the Yunnan seed processing center, adding 10k tons of capacity.

In fact, Zhengda Seed still has a large amount of idle funds on its books. Wind data shows that as of the end of 2025, the total of Zhengda Seed’s cash and cash equivalents and trading financial assets was RMB 604 million, accounting for 69% of total assets. At the same time, the company had no short- or long-term borrowings, and its non-current liabilities due within one year were less than RMB 560k; its asset-liability ratio was only 29.06%.

It can be seen that Zhengda Seed currently has ample liquidity, with the total of cash and trading financial assets reaching more than twice the amount of this IPO’s fund-raising. And with capacity utilization for 2024 falling below 60% and the company also holding a large amount of idle funds, the rationality and necessity of Zhengda Seed’s fund-raising to expand production are still worth关注.

（Full text 2,547 Chinese characters）

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