Core Viewpoint - Zuxing New Materials Co., Ltd. is facing significant challenges in its pursuit of listing on the Beijing Stock Exchange, with concerns surrounding its financial performance, related party transactions, and R&D investment [1][2][4] Financial Performance - In the first half of 2025, Zuxing New Materials reported revenue of approximately 362 million yuan, a year-on-year increase of 5.79%, and a net profit of about 36 million yuan, up 17.2% [1] - The company experienced a "revenue growth without profit increase" phenomenon in 2024, with negative operating cash flow and a cash collection ratio of less than 1, indicating challenges in cash flow management [1][4] - From 2021 to 2024, Zuxing's revenue figures were 494 million yuan, 629 million yuan, 690 million yuan, and 707 million yuan, while net profits fluctuated at 64 million yuan, 52 million yuan, 87 million yuan, and 59 million yuan, respectively [4] Related Party Transactions - Zuxing New Materials has a history of related party transactions involving companies controlled by its actual controller's relatives, raising concerns about the independence of these transactions [1][4] - Although the company claims to have reduced business dealings with these related parties, the new distributors still show signs of operational confusion with the related entities, leading to skepticism about the true independence of these transactions [1][4] R&D Investment - The company's R&D investment as a percentage of revenue has been declining and is below the industry average, with figures of 2.51%, 2.47%, and 2.3% from 2022 to 2024 [2][4] - The presence of the financial director, Yu Xinchun, on the list of patent inventors has raised questions regarding the authenticity of the company's technological capabilities and patent claims [2][4] Conclusion - Zuxing New Materials' path to listing is fraught with challenges, including doubts about financial data authenticity, the regulatory nature of related party transactions, and insufficient R&D investment, all of which are critical factors influencing its listing process [2][4]

Core Viewpoint - Shenzhen Huaxida Technology Co., Ltd. has submitted an application for listing on the Hong Kong Stock Exchange after previously withdrawing its application for the Beijing Stock Exchange due to concerns over the authenticity of its financial statements [1][2]. Financial Authenticity Concerns - Huaxida faced three rounds of inquiries from the Beijing Stock Exchange regarding the authenticity and sustainability of its financial performance, particularly questioning the significant growth in trade revenue and the relationship with its largest customer, Smart Media [2][4]. - The company has a high proportion of accounts receivable relative to total assets, yet it maintains the lowest bad debt provision ratio among its peers, raising questions about its accounting policies [10][14]. Customer Relationships and Revenue - Smart Media, a related party and major customer, contributed over 800 million yuan to Huaxida's revenue in 2021 and 2022, accounting for more than 20% of total revenue during those years [6][14]. - The establishment of Smart Media shortly before it became a major customer raises suspicions about the legitimacy of the transactions between Huaxida and Smart Media, as well as the necessity of using Smart Media as an intermediary [7][6]. Audit and Reporting Issues - Huaxida announced it would be unable to disclose its 2024 annual report on time, citing the complexity of the audit process related to its application for overseas listing [8][9]. - The company has previously made multiple corrections to its financial data, which has led to skepticism regarding the reliability of its financial statements [8][9]. Comparison with Peers - Huaxida's accounts receivable as a percentage of total assets were significantly higher than those of comparable companies, with figures of 45.41%, 42.3%, and 36.85% for 2022, 2023, and 2024 respectively [10][11]. - The bad debt provision ratio for Huaxida was notably lower than that of its peers, with 4.65% for both 2022 and 2023, compared to an average of over 10% for comparable companies [14].