Core Viewpoint - Yongzhen Co. plans to invest approximately 1.31 billion yuan in a battery storage project in Baotou, despite facing significant financial constraints, including a cash balance of only 1.4 billion yuan and short-term loans nearing 7 billion yuan [1][3][5] Financial Situation - As of the end of Q1 this year, Yongzhen Co. reported cash reserves of 1.397 billion yuan and short-term borrowings of 6.044 billion yuan, indicating a tight liquidity position [3][5] - The company has experienced negative operating cash flow for several consecutive years, with capital expenditures increasing significantly, exacerbating its financial strain [5][12] - The planned IPO in 2024 aims to raise 1.807 billion yuan, but the actual amount expected to be raised is only 1.385 billion yuan, which is insufficient to cover the funding gap [5] Project Details - The Baotou battery storage project includes the construction of a 300,000 kW/1.8 million kWh new energy storage station and a 220kV booster station, with a total construction period of 7 months, expected to start in June 2025 and be completed by December 31, 2025 [1][3] Performance Issues - After going public, Yongzhen Co. experienced a significant decline in profitability, with a 27.71% year-on-year decrease in net profit for 2024, despite a 51.80% increase in revenue [7][10] - The company's gross margin has consistently been lower than comparable companies, indicating weak product competitiveness and bargaining power [7][10][12] - Accounts receivable reached 4.059 billion yuan, which is over 30 times the accounts payable of 126 million yuan, highlighting a concerning disparity in financial management [10][12]