Core Viewpoint - The company Southern Dairy has adjusted its IPO plan in response to regulatory inquiries, significantly reducing the number of shares to be issued from a maximum of 57.5 million to 40.46 million, reflecting a nearly 30% decrease in the fundraising scale [1][2]. Group 1: IPO Adjustment - Southern Dairy plans to publicly issue no more than 40.46 million shares, down from an initial plan of 57.5 million shares, with a public holding ratio of at least 25% post-issuance [1][2]. - The adjustment is seen as a response to regulatory scrutiny regarding the necessity of its fundraising projects and aims to optimize the issuance plan [2]. Group 2: Financial Performance and Challenges - The company is facing a slowdown in performance, with its three subsidiaries projected to incur losses in 2024, totaling 2.08 million [2]. - The domestic fresh milk market is under pressure, with average purchase prices dropping from 4.38 yuan/kg in August 2021 to 3.02 yuan/kg by August 2025, a decline of 31.05% [3]. - Despite the market downturn, Southern Dairy has increased its self-sourced milk ratio from 55.52% in 2022 to 60.76% in 2023, leading to a cost imbalance where self-sourced milk costs exceed market prices [3]. Group 3: Market Dependency and Expansion Issues - Over 92% of Southern Dairy's revenue comes from within Guizhou province, indicating a heavy regional dependency that poses growth challenges [5]. - The company has struggled to expand beyond its home market, with a recent acquisition in Chongqing resulting in a loss of 4.22 million in 2024 [5]. - The company claims a market share of approximately 67.84% in Guizhou, but this figure has been questioned by regulators regarding its accuracy and calculation methods [5]. Group 4: Distribution and Sales Channels - In 2024, over 60% of Southern Dairy's revenue came from distribution channels, which saw a decline of 2.7%, while direct sales increased by 8.7% [6]. - The growth in direct sales is primarily attributed to e-commerce and home delivery, but concerns have been raised about the low proportion of e-commerce sales and potential issues with order legitimacy [6]. - The company faces challenges in replicating its home delivery model outside Guizhou and has been questioned about the authenticity of its R&D expenses and their alignment with business strategy [6].