Core Viewpoint - The company SanChao New Materials is planning to transfer its control, following similar actions by other photovoltaic companies, indicating a trend of control changes in the industry [1]. Company Overview - SanChao New Materials, based in Nanjing, is one of the earliest companies in China to engage in the research, production, and sales of diamond wire, and it is a major manufacturer in this field [3]. - The company's main products include electroplated diamond wire and diamond grinding wheels, primarily used for cutting, grinding, and polishing hard and brittle materials [3]. - SanChao has established stable business relationships with well-known companies in the photovoltaic industry, such as Jiangsu Xiexin, TCL Zhonghuan, and LONGi Green Energy [3]. Industry Challenges - The photovoltaic industry is experiencing significant downward pressure, leading to a sharp decline in demand for diamond wire used in silicon slicing due to inventory clearance actions by downstream silicon slicing companies [4]. - In 2024, the company reported a revenue of 348.83 million yuan, a year-on-year decrease of 27.49%, and a net profit attributable to shareholders of -140.94 million yuan, a decline of 623.64% [4]. Operational Adjustments - In response to low capacity utilization and industry pressures, the company has reduced its production scale and temporarily shut down all production lines at its Jinhu base, retaining only part of its capacity at the Jurong base [4]. - The company has optimized its workforce, including frontline employees and some management personnel, effectively reducing labor costs [4]. Regulatory Issues - On November 5, 2024, the Jiangsu Securities Regulatory Bureau issued a warning letter to the company and its executives due to failure to timely disclose important contract progress and irregularities in the management and use of raised funds [5]. - The company faced issues related to a contract with Nakamura Superhard, which involved the sale of 225 diamond wire manufacturing devices, with a total contract value of 2.2 billion yen [6]. Financial Performance - SanChao's financial performance has been lackluster since its listing in 2017, with revenue peaking at nearly 500 million yuan but failing to exceed this level in subsequent years [7]. - The company reported revenues of 283 million yuan in 2017, 333 million yuan in 2018, and a decline to 225 million yuan in 2019, with a net profit of 96.82 million yuan [7].