“Nuo Hui Health,” once known as the “first stock for early screening of cancer in China,” has officially delisted recently due to failure to meet the requirements for resumption of trading. The pharmaceutical company from Hangzhou saw its market value plummet from 40 billion Hong Kong dollars to almost zero. Behind this downfall is a stunning financial fraud scandal – involving the purchase of human feces from public toilets to fabricate testing samples, leading to a ninety percent increase in reported revenue. This case has not only left over four thousand investors empty-handed but also highlighted the serious reality of financial fraud in Chinese companies.
In August 2023, the US financial institution CapitalWatch released a short-selling report directly accusing Nuo Hui Health of systemic financial fraud. The report revealed that the company’s actual sales in 2022 amounted to only 76.95 million yuan, while the publicly announced figure was 765 million yuan, representing a ninety percent inflation rate.
According to reports from “China News Weekly” and “Jiemian News,” Zhu Jiang, the Chairman and Founder of CapitalWatch, revealed that their team initially considered investing in Nuo Hui Health but discovered discrepancies in 12 sets of data during their due diligence. Subsequently, six investigators were deployed, conducting a thorough 16-month investigation at hospitals, medical examination centers, and e-commerce platforms, uncovering that the company inflated its performance through tactics like pressuring distributors to buy excess products and recognizing expired goods as revenue.
More shocking details of the deception surfaced later: sales staff and distributors forged fake trading contracts, with distributors purchasing human feces from sanitary workers in public toilets as testing samples, even splitting a sample among multiple fictitious accounts. Nuo Hui also engaged in circular fund flows through third-party platforms, transferring funds under the guise of marketing expenses and then re-routing them as procurement payments, creating an entire fictitious trade loop.
Facing the accusations of short-sellers, Nuo Hui Health’s founder, Zhu Yeqing, initially responded aggressively, dismissing the report as “false and misleading,” even accusing the short-selling institution of demanding a 3 million yuan PR fee, which was declined. The company held a conference call in an attempt to stabilize market confidence.
However, in March 2024, after years of collaboration, the auditing firm Deloitte abruptly withdrew and refused to sign off on the 2023 financial report, citing concerns over the veracity of sales, commercial viability, and the efficacy of marketing expenses. It is extremely rare for an accounting firm to resign directly, indicating the severity of the company’s financial issues.
The same month, the Hong Kong Stock Exchange suspended Nuo Hui Health’s trading, freezing the stock price at 14.14 Hong Kong dollars, nearly halving from the IPO price of 26.66 Hong Kong dollars. The company’s management faced turmoil: CFO Gao Yu resigned, Zhu Yeqing stepped down as Chairman and CEO in December 2024, and in February 2025, he was removed from the board of executive directors by a nearly 80% shareholder vote.
In March 2025, the Hong Kong Stock Exchange’s “Restoration Guidelines” explicitly stated: “The company engaged in a systematic and deliberate fraudulent scheme by fabricating sales data through distributor models in the 2022 and 2023 fiscal years, with extensive involvement of the company’s management and employees.”
Established in Hangzhou in 2015, Nuo Hui Health Technology Co., Ltd. was founded by three alumni from Peking University’s School of Life Sciences, specializing in home screening products for high-incidence cancers such as colorectal and gastric cancer. When it went public on the Hong Kong Stock Exchange in February 2021, its market value surpassed 30 billion Hong Kong dollars on the first day, viewed as a significant milestone in the industrialization of cancer early screening in China.
According to insiders cited by 21jingji.com, cancer early screening products are essentially a “slow business” and challenging to accelerate through capital operations. Nuo Hui’s core product, “Chang Wei Qing,” is priced at 1,996 yuan, not covered by medical insurance. When promoted in public hospitals, it faced obstacles such as high pricing approval hurdles and pressure from doctors in prescribing. In comparison, the cost of colonoscopy in tertiary hospitals ranges from 1,000 to 2,000 yuan, making the price advantage of early screening products less apparent.
The consumer market for direct-to-consumer products is equally challenging. A marketing professional from a cancer early screening company admitted, “Unless there is universal testing awareness, no one will actively search for ‘colon cancer early screening’ products. In vitro diagnostic products are difficult to generate quick profits in the short term. To truly capture the market, companies need to invest in research and development to lower testing costs.”
As reported by Blue Whale News, Nuo Hui Health’s delisting has severely affected over four thousand investors. Institutions like Everbright Securities and Bosera Fund have successively lowered their valuations six times, plummeting from 14.14 Hong Kong dollars to 0.01 Hong Kong dollars, nearly becoming worthless. Investors have declared combined losses exceeding 700 million Hong Kong dollars.
Due to Nuo Hui Health’s complex structure of being registered in the Cayman Islands, listed in Hong Kong, and operating in mainland China, investors face difficulties in cross-border litigation. The Hong Kong securities legal system does not support class action lawsuits, making it extremely challenging for individual investors to gather evidence.
The Zhu Jiang team is currently seeking a liquidator and planning to apply for liquidation in Hong Kong to obtain the company’s financial records. However, legal experts point out that class action lawsuits must be based on the final recognition of false statements, and the Hong Kong Stock Exchange and the Securities and Futures Commission have yet to make a clear determination regarding the Nuo Hui case.
Zhu Jiang stated that the Nuo Hui Health case is likely one of the largest stock disputes involving fraud since the opening of the Hong Kong-Shanghai Stock Connect and even since the establishment of Hong Kong.
In fact, the Nuo Hui Health case is not an isolated incident. Public data shows that in 2024, there were 61 financial fraud cases in the Chinese capital market, a 17% increase compared to the previous year, with record penalties imposed, including among state-owned enterprises. As of 2025, the number of financial fraud cases continues to rise.