Core Viewpoint - Tianyuan Biochemical Co., Ltd. is preparing for an IPO on the Shenzhen Stock Exchange, aiming to raise 630 million yuan for industrial development, despite concerns over stagnant revenue and product quality issues [1][3][4]. Financial Performance - The company has maintained profitability over the past three years, with net profits of 162 million yuan, 229 million yuan, and 249 million yuan from 2022 to 2024, showing a growth rate of 41.46% in 2023 and 8.71% in 2024 [4][5]. - However, revenue has stagnated around 1.7 billion yuan for three consecutive years, with slight fluctuations: 1.712 billion yuan in 2022, 1.774 billion yuan in 2023, and 1.750 billion yuan in 2024, indicating a decline of 1.34% in 2024 [4][5]. Research and Development - The company's R&D expense ratio has been low compared to industry peers, with R&D expenses of 43.31 million yuan, 48.04 million yuan, and 74.26 million yuan from 2022 to 2024, representing 2.53%, 2.71%, and 4.24% of revenue respectively [8][9]. - In 2024, R&D expenses increased by 54.58%, attributed to the formal registration of a new pesticide and payments for technical services, but still lag behind the industry average of 4.98% to 5.29% [9]. Distribution and Sales Model - The company heavily relies on a distributor model, with distributor revenues of 1.626 billion yuan, 1.728 billion yuan, and 1.701 billion yuan, accounting for over 96% of total revenue during the reporting period [6][7]. - A significant portion of sales comes from distributors controlled by former employees, contributing 334 million yuan to total revenue over three years [7]. Legal and Compliance Issues - Tianyuan Biochemical has faced multiple legal disputes and administrative penalties, including fines for selling counterfeit pesticides and other compliance issues involving subsidiaries [11][12]. - The company has unregistered properties totaling 11,432.79 square meters, which could pose risks of administrative penalties if deemed illegal [13][14]. IPO and Future Prospects - The IPO aims to raise 630 million yuan for five projects, including a new production facility for pesticide granules, which could replace existing production sites [13]. - Despite the company's claims of being a leader in agricultural technology innovation, concerns remain about its ability to sustain growth and manage operational risks effectively [8][9].