Core Viewpoint - The company Daoshengtianhe Materials Technology (Shanghai) Co., Ltd. is facing significant challenges in its IPO application process, including unstable revenue, high dividend payouts amidst cash flow issues, and internal shareholder disputes, raising concerns about its governance and financial health [1][2][4]. Financial Performance - Daoshengtianhe's revenue from 2020 to 2024 has shown volatility, with figures of approximately 33.32 billion, 31.27 billion, 34.36 billion, 32.02 billion, and 32.38 billion respectively, indicating inconsistent performance [4]. - The net profit during the same period was 1.38 billion, 0.85 billion, 1.1 billion, 1.55 billion, and 1.55 billion, with a significant drop of over 30% in 2021 [4]. - The company has distributed a total cash dividend of 250 million from 2021 to 2023, which accounts for 81.17% of its net profit of 308 million during that period, significantly exceeding the scrutiny standards for large dividends [3][4]. Shareholder Dynamics - The ownership structure of Daoshengtianhe is complicated, with the controlling shareholders, Ji Gang and Zhang Ting, holding 60.47% of the shares and possessing U.S. permanent residency [4]. - There have been low-priced share transfers among shareholders, raising suspicions of potential benefit transfers, which have destabilized the company's equity structure [3]. Governance Issues - The company has experienced severe internal conflicts among shareholders, which have been publicly visible and have negatively impacted corporate governance [2]. - The initial chaotic shareholding arrangements reflect a lack of governance awareness, and ongoing litigation during the IPO process raises concerns about internal stability [2]. Market Position and Strategy - Daoshengtianhe aims to enter the high-end adhesive market, but its existing production capacity utilization rates are low, at 29.65%, 76.35%, and 78.65% for 2022-2024, indicating potential overexpansion risks [6]. - The company’s products are under scrutiny for being classified as "high pollution" and "high environmental risk," which could hinder its market acceptance [6][7]. Environmental Concerns - The company has faced criticism regarding its environmental practices, particularly in relation to its products being similar to those listed as "high pollution" by the Ministry of Ecology and Environment [6][7]. - Despite adjustments to its investment projects, a significant portion of its planned production still aligns with "high pollution" products, raising questions about its environmental compliance and project planning [7].

Core Viewpoint - The company has delayed its global offering and listing due to a civil lawsuit filed by a shareholder, Ji Yuan Jun Yi, who is dissatisfied with the investment returns from its subsidiary, Shou Lang Ji Yuan [1] Group 1: Legal Dispute - Ji Yuan Jun Yi accuses the company of violating the investment agreement by increasing the investment amount in Shou Lang Ji Yuan's production facilities by approximately 159.8 million RMB without prior notice [2] - The lawsuit also claims that the company set the sales price of ethanol products without board or shareholder approval, violating the fairness clause in the investment agreement [2] - Ji Yuan Jun Yi has requested a preservation order to prevent the company from making unilateral major investment and pricing decisions [2] Group 2: Legal Counsel's Opinion - The company's legal advisors believe that the lawsuit lacks legal basis and the likelihood of Ji Yuan Jun Yi's claims succeeding is low [3] - The company plans to actively defend against the claims made in the lawsuit [3] - The company has secured irrevocable commitments from two new gas suppliers to meet its industrial gas supply needs, ensuring quality consistency with the current supplier [3] Group 3: Financial Impact - If Ji Yuan Mei Jin stops supplying industrial gas, the company could see a revenue decline of approximately 6.2%, a gross margin decrease of about 0.9 percentage points, and an increase in net loss of around 7.2% for 2025 [4] - The decline in gross margin is attributed to fixed costs that will still be incurred despite no revenue generation in the worst-case scenario [4] - The company believes that the legal dispute will not have a significant adverse impact on its overall business [4]

Core Viewpoint - The article discusses the recent shift in production of Wahaha's purified water to Jinmailang, highlighting the reasons behind this decision, including production capacity issues and internal disputes among shareholders [1][4]. Group 1: Production and Capacity Issues - Wahaha has engaged Jinmailang for contract manufacturing of purified water due to a significant increase in demand and insufficient production capacity after closing over 10 production lines [1]. - The closure of these production lines is attributed to business adjustments and shareholder disputes, impacting several subsidiaries including Shaanxi Wahaha Dairy Co., Ltd. and Xuzhou Wahaha Beverage Co., Ltd. [1][2]. - The newly purchased high-speed bottled water production lines have not yet ramped up to meet demand, leading to reliance on external manufacturing [1]. Group 2: Shareholder Disputes and Management - The article notes that the closed production lines are closely associated with Du Jianying, a long-time member of Wahaha's management team, indicating potential internal conflicts affecting operations [2][4]. - Du Jianying holds significant stakes in several subsidiaries, which may influence the decision-making process within the company [2]. Group 3: Consumer Perception and Quality Control - The shift to contract manufacturing raises concerns about brand perception among consumers, as they may question why they should purchase Jinmailang products instead of Wahaha's [4]. - A long-time employee expressed concerns that outsourcing production could compromise quality control and product consistency compared to in-house manufacturing [4]. - Wahaha's official statement acknowledged issues with some batches of purified water produced by Jinmailang, leading to the termination of their contract starting April 2025 [4].