Core Viewpoint - The company, Aux, is making a significant dividend payout of 3.79 billion yuan just before its IPO in Hong Kong, raising questions about its financial strategy and future prospects [1][4][27]. Financial Strategy - Aux's decision to distribute 3.79 billion yuan in dividends is unusual, especially as it reduces its cash reserves from 5.1 billion yuan to 2.9 billion yuan, nearly exhausting its profits from the past two years [3][4]. - The company's long-standing high debt ratio of 85% poses a risk to its cash flow, making the timing of the dividend payout questionable [6][12]. Ownership and Control - The company is tightly controlled by its founder, Zheng Jianjiang, and his family, who collectively hold 96.36% of the shares, ensuring unified decision-making [7][11]. - The substantial dividend payout primarily benefits the Zheng family, with 3.652 billion yuan flowing into their pockets [12]. Market Position and Challenges - Aux has faced increasing competition from industry giants like Gree and Midea, as well as new entrants like Xiaomi, which have eroded its market share despite attempts to lower prices [15][17]. - The company's low profit margins, approximately 21%, limit its ability to compete effectively in the market [17]. Reputation and Legal Issues - Aux has suffered reputational damage due to a series of legal battles with Gree, resulting in significant financial penalties and negative consumer perceptions [18]. - Complaints regarding product quality and service continue to plague the company, further impacting its brand image [18]. Technological and Operational Limitations - Aux's R&D investment has been insufficient, averaging less than 600 million yuan over the past three years, which is only a fraction of what industry leaders spend [21]. - The company relies heavily on external suppliers for key components, limiting its technological independence and innovation potential [21]. IPO Motivation - The upcoming IPO is seen as a dual strategy for self-rescue and cashing out, allowing the founder to secure past gains while transferring future risks to public investors [25][27]. - The significant dividend payout before the IPO is viewed as a way to lock in the company's accumulated value while offloading operational challenges to new shareholders [27][29].