Core Viewpoint - Zhejiang Zhenstone New Materials Co., Ltd. (Zhenstone) is attempting to re-enter the capital market after a six-year hiatus following its privatization in 2019, facing significant financial pressures and high debt levels during its IPO process [2][3][4]. Financial Performance - Zhenstone's core business focuses on the research, production, and sales of fiber-reinforced materials for clean energy, with revenue and net profit declining significantly in 2024 [3][4]. - The company's revenue figures from 2022 to 2024 were approximately 5.267 billion yuan, 5.124 billion yuan, and 4.439 billion yuan, respectively, while net profits were about 774 million yuan, 790 million yuan, and 608 million yuan [3][4]. Debt Levels - As of the end of 2024, Zhenstone's total short-term and long-term borrowings exceeded 4 billion yuan, with an asset-liability ratio consistently higher than the industry average by about 12 percentage points [2][4]. - The asset-liability ratios for the respective years were 71.53%, 71.3%, and 67.75%, compared to industry averages of 58.11%, 52.6%, and 55.7% [4]. Dividend Payments - Prior to the IPO application, Zhenstone distributed substantial cash dividends totaling approximately 1.14 billion yuan over two years, raising concerns about its financial management amid rising debt [5][6]. - The cash dividends for 2022 and 2023 were approximately 540 million yuan and 600 million yuan, representing 69.77% and 75.95% of the respective net profits [6]. Related Party Transactions - Zhenstone's supply chain exhibits a high concentration of related party transactions, with over 68% of its operating costs linked to purchases from related parties, particularly China Jushi [8][10]. - The company purchased goods and services from related parties amounting to 2.643 billion yuan, 2.185 billion yuan, and 2.235 billion yuan from 2022 to 2024, with respective proportions of 66.29%, 57.95%, and 68.59% of operating costs [10]. Governance and Control - The actual controllers of Zhenstone, Zhang Yuqiang and Zhang Jiankang, hold a combined 96.51% stake in the company, raising questions about governance and potential conflicts of interest [5][6].