SHUNHO STOCK(SZ:002565) Xin Lang Zheng Quan·2025-08-19 10:29Core Viewpoint - Shunhao Co., Ltd. plans to issue H shares and list on the Hong Kong Stock Exchange despite declining performance and ongoing legal issues, raising questions about the necessity and feasibility of the IPO [1][10]. Financial Performance - Shunhao's revenue and net profit have been on a downward trend since 2018, with revenue failing to exceed the 2018 peak of 20.55 billion yuan, and net profit showing significant losses in several years [4][5]. - In the first half of 2025, the company reported revenue of 620 million yuan and a net profit of 29 million yuan, representing year-on-year declines of 12.19% and 6.24% respectively [6]. Employee Reduction - The company has reduced its workforce by nearly 50% over the past seven years, from 2,121 employees in 2017 to 1,116 in 2024, indicating ongoing operational challenges [7][9]. Acquisition Issues - Shunhao has faced significant losses due to problematic acquisitions, such as the 2013 purchase of Zhejiang Demei, which led to a loss of 51 million yuan in 2014 due to management misconduct [5][6]. Legal and Compliance Challenges - The company is currently under investigation for alleged unit bribery, which poses a significant obstacle to its IPO plans, as compliance with regulatory standards is critical for approval from both the China Securities Regulatory Commission and the Hong Kong Stock Exchange [11][12][13].