A seemingly minor typographical error — writing “2024” instead of “2025” — in an earnings preview by Beijing-based environmental engineering firm Zhenghe Ecology (605069) prompted a same-night correction and drew attention to more serious business troubles. The company originally published its performance guidance with the wrong year in the “important content” note and then issued an urgent erratum after internal review.
The corrected forecast shows Zhenghe Ecology expects a net loss attributable to shareholders of Rmb140 million to Rmb120 million for 2025, with adjusted net losses (扣非净利润) in the same range and post-exclusion operating revenue of Rmb350–400 million. Those figures would extend the company’s losing streak to four consecutive years after net losses in 2022–2024, underscoring persistent profitability and cash-flow pressures.
Zhenghe, founded in 1997 and certified as a national high-tech enterprise, positions itself around nature-based solutions (NbS) and runs three principal business lines: ecological-environment engineering, urban waterfront and tourism-area operations, and artificial intelligence-driven services. In its brief explanation of the 2025 shortfall, management cited three reasons: a deliberate strategic emphasis on Beijing’s ecological water-conservancy projects whose revenues have not yet fully materialized; downward adjustments in project settlements that have squeezed near-term revenues and margins; and weaker-than-expected collections in the second half of 2025.
Compounding operational worries, the company disclosed it recently received a court ruling approving the withdrawal of a Rmb129 million construction-payment lawsuit that had arisen from long-standing arrears by multiple Fujian-based counterparties. Zhenghe had filed the suit in response to prolonged non-payment for construction contracts but applied to withdraw the case on 25 December 2025 — a move the court has now authorized.
On its face, the textual error was a low-level compliance lapse; in context it acted as a magnifying glass for investor concerns about disclosure controls, financial health and working-capital risk. Repeated annual losses and large outstanding receivables are a familiar peril for mid-sized contractors in China’s environmental and infrastructure space, where payment cycles, aggressive bidding and government or quasi-government counterparties can leave firms vulnerable.
For shareholders and potential overseas investors, the episode raises two questions. First, whether the group’s governance and internal review procedures for market disclosures are adequate — a simple mistake in a headline figure undermines confidence and invites regulatory scrutiny. Second, whether the company can stabilise cash flow and reverse its earnings trend amid a business model dependent on large, slow-settling projects and concentrated public-sector counterparties.
Beyond Zhenghe, the incident carries broader market significance. Chinese regulators and exchanges have increasingly pushed for higher transparency and more rigorous internal controls among listed firms; even clerical mistakes can trigger market jitters and investigations. For the environmental services sector, the story also highlights structural stresses — tender-driven margin compression, project settlement disputes and persistent receivable accumulation — that could accelerate consolidation or force restructurings in the coming years.