MENDALE(SZ:002397) Mei Ri Jing Ji Xin Wen·2025-10-28 06:39Core Viewpoint - Mengjie Co., Ltd. ("the Company") faces significant internal governance issues despite reporting a year-on-year increase in net profit for the third quarter of 2025, highlighting deeper financial and operational crises [1][2]. Financial Performance - For the first three quarters of 2025, the Company achieved revenue of approximately 1.099 billion yuan, a year-on-year decrease of 7.97% [1]. - The net profit attributable to shareholders was approximately 26.52 million yuan, reflecting a year-on-year increase of 28.69% [1]. - The revenue for the first three quarters is the lowest since 2017, with the third quarter's net profit after deducting non-recurring gains and losses being less than 800,000 yuan, and the gross profit margin dropping to 0.33% [3]. Internal Control and Governance Issues - Director Chen Jie has consistently raised concerns about the authenticity of the Company's financial reports, having questioned the accuracy of 10 reports since February 2023 [2]. - The Company has unresolved issues regarding a personal loan exceeding 60 million yuan dating back four years, and there are allegations of financial misconduct, including "cross-period recognition" of income, costs, and expenses [2]. - The Hunan Securities Regulatory Bureau issued a decision indicating that the Company lacks adequate financial management and internal control, and has been negligent in recovering borrowed funds [2]. Operational Challenges - Since 2021, the Company's revenue has been in continuous decline, with significant losses totaling over 600 million yuan over two years, despite a brief recovery in the last two years [3]. - The Company's performance has shown increased volatility, with a notable decline in profitability since reaching a peak in 2021, and the basic financial condition remains unstable as of 2024 and 2025 [3]. Management Response - In response to Chen Jie's concerns, the Company stated that it has initiated recovery actions and implemented various measures, although market participants view this as a delayed response to long-standing issues [4]. - The Company, a well-established player in the textile industry, primarily produces bedding products, and acknowledges the need for deeper reforms in internal control, financial management, and business expansion to overcome current challenges [4].