Core Viewpoint - Changyu Group, established in 2019, is seeking to go public, but over 90% of its revenue and profit come from acquired subsidiaries, raising concerns about its operational independence and financial health [3][4][5] Group 1: Company Background and Structure - Changyu Group primarily engages in the research, production, and sales of zirconium products, specialty nylon products, and fine chemicals, with a leading global capacity of 75,000 tons/year for zirconium oxychloride [3][4] - The company was formed by absorbing assets from its actual controller Liu Qiyong's previous operations, particularly from Zibo Guangtong Chemical Co., which was already a leader in the zirconium industry before the establishment of Changyu Group [4][5] - The management team largely consists of individuals from Zibo Guangtong, indicating that Changyu Group is not a startup but rather a restructured entity with an existing operational framework [4][5] Group 2: Financial Performance - From 2022 to the first half of 2025, Changyu Group's revenues were 1.67 billion, 1.61 billion, 1.64 billion, and 896 million yuan, with net profits of 263 million, 195 million, 212 million, and 113 million yuan respectively [7][19] - The two acquired subsidiaries, Guangtong New Materials and Guangyin New Materials, contributed 96.52% of Changyu Group's revenue and 92.45% of its net profit in 2024, highlighting the dependency on these entities for financial viability [20] Group 3: Related Party Transactions - Changyu Group's largest customer, First Rare Elements, has been purchasing products at a premium of 34.4% above market prices, raising questions about the fairness of these transactions [8][9][21] - The partnership with First Rare Elements includes restrictive clauses that limit Changyu Group's ability to independently market certain products, potentially hindering its growth [9][22] Group 4: Regulatory and Disclosure Issues - The prospectus fails to disclose the marital relationship between Liu Qiyong and key guarantor Che Xiufeng, which could be seen as a significant omission in terms of related party disclosures [11][23] - There are discrepancies in the employment history of executive Wang Yanjun, suggesting potential inaccuracies in the prospectus that could lead to questions about the integrity of the information provided [12][24] Group 5: Operational Concerns - Changyu Group's nylon production capacity utilization has been consistently below 50%, yet it plans to raise funds for expansion, which raises concerns about the feasibility of such growth given current underutilization [10][22] - The company has seen a reduction in its reported R&D personnel from 128 to 112 without a corresponding adjustment in project scale, leading to questions about the efficiency and effectiveness of its research efforts [13][25]