Zhejiang Power New Energy (SH:688184) Jing Ji Guan Cha Wang·2025-08-04 08:10Core Viewpoint - ST Pava is facing a severe governance and financial crisis, highlighted by the investigation of its co-controller and director Zhang Bao for embezzlement, alongside significant management changes and financial misreporting [1][2][3]. Financial Issues - ST Pava's financial troubles began in its second year post-IPO, with a reported revenue of 1.17 billion yuan in 2023, a year-on-year decline of 29.26%, and a net loss of 97.37 million yuan, marking a 166.79% decrease [3]. - The company experienced further losses in 2024, with a net loss expanding to 727 million yuan, reflecting a year-on-year decline of 193.37% [3]. - The company raised 1.743 billion yuan during its IPO, but its market value has since plummeted to 1.592 billion yuan, below the net amount raised [6]. Governance and Management Changes - Zhang Bao, the co-controller and director, was formally investigated for embezzlement, having previously resigned from his roles as chairman and general manager due to "personal health reasons" [2]. - Recent management changes include the resignation of key personnel, such as the deputy general manager and core technical staff, which has raised concerns about the company's operational stability [5]. Internal Control and Compliance Issues - The company has been flagged for significant internal control deficiencies, leading to inaccurate financial reporting and a warning from the Zhejiang Securities Regulatory Bureau [4]. - Issues identified include inflated revenue figures, inadequate inventory depreciation provisions, and mismanagement of company seals, which have contributed to the company's financial misreporting [4]. Market Position and Competitive Landscape - ST Pava operates in a highly competitive market for ternary precursor materials, facing pressure from larger firms like Huayou Cobalt and Greeenme, which have strengthened their market positions through technological advancements [6]. - Despite attempts to pivot towards high-end products, the company has struggled to convert these efforts into profitability, exacerbating its survival challenges [6]. Customer and Market Confidence - The company has faced scrutiny regarding the qualifications of its major customers, which has further eroded market confidence [7]. - As of August 4, ST Pava's stock price fell to 9.95 yuan per share, reflecting a continued decline in investor sentiment [7].