SUNRISE(SZ:002256) Xin Lang Cai Jing·2025-11-05 05:01Core Viewpoint - The legal dispute involving Zhaoxin Co., Ltd. has concluded favorably for the company, as the Supreme People's Court rejected the retrial application from Zhejiang Qianhong Industrial Co., Ltd., confirming that Zhaoxin will not bear additional liabilities related to a 167 million yuan buyback dispute, which has had no negative impact on the company's performance as evidenced by its recent quarterly report [1][4]. Summary by Sections Legal Dispute Background - In March 2023, Zhaoxin Co. and its subsidiary Shenzhen Yongsheng entered into a capital increase agreement with Zhejiang Qianhong, where Zhaoxin invested 250 million yuan for a 21.5554% stake, while Zhejiang Qianhong invested 350 million yuan for a 30.1776% stake [3]. - The agreement included a one-year "cooling-off period" allowing Zhejiang Qianhong to request an unconditional buyback of its investment, which later led to the dispute [3]. - In May 2023, Zhejiang Qianhong exercised its buyback right, and Zhaoxin paid 354.21 million yuan to complete the buyback process [3]. - In February 2024, Zhejiang Qianhong filed a lawsuit claiming breach of contract, seeking 167.33 million yuan in damages [4]. Court Proceedings and Outcomes - The first-instance court ruled in August 2024, awarding only 4.21 million yuan in damages, which was significantly lower than the claimed amount [4]. - Both parties appealed, but the Zhejiang High Court upheld the original ruling in November 2024 [4]. - In July 2025, Zhejiang Qianhong sought a retrial from the Supreme Court, which was ultimately rejected in November 2025, confirming that Zhaoxin had fulfilled its payment obligations and that the final ruling would not adversely affect the company's profits [4][5]. Financial Performance - Zhaoxin's Q3 2025 report showed a revenue of 322 million yuan, a year-on-year increase of 34.45%, and a net profit of 4.9078 million yuan, marking a turnaround from previous losses [5]. - The third quarter alone saw a revenue of 114 million yuan, up 43.44% year-on-year, with net profit growth of 102.01% [5]. - Despite a negative net profit of 22.49 million yuan when excluding non-recurring items, the company showed signs of recovery with a 100.6% increase in operating cash flow [5]. Implications for the Company - The resolution of the legal dispute removes a significant risk for Zhaoxin, allowing the company to focus on its growth trajectory, which is characterized by increasing revenue and profits [6]. - The market's attention may now shift towards Zhaoxin's developments in the new energy sector, with the performance of Shenzhen Yongsheng being a key factor for future growth [6].