Core Viewpoint - The article discusses the recent turmoil faced by Wantong Development, particularly the detention of its actual controller and chairman, Wang Yihui, which has raised concerns about the company's ongoing transformation efforts and its recent acquisition plans [5][12][15]. Group 1: Company Developments - On August 18, 2023, Wantong Development announced that its chairman, Wang Yihui, was detained by the Beijing Public Security Bureau, although the investigation is reportedly unrelated to the company's daily operations [5][6]. - Following the news, Wantong Development's stock price hit the daily limit down, becoming the only non-ST stock to do so on that day [9]. - The company had recently announced plans to acquire a chip company, intending to spend over 800 million yuan, which now faces uncertainty due to Wang's absence [11][15]. Group 2: Acquisition Details - Wantong Development planned to acquire a 62.98% stake in Beijing Shuduo Information Technology Co., Ltd. for 854 million yuan, despite the target company having a valuation significantly higher than its net assets [16][19]. - The acquisition raised concerns due to the high premium, with Shuduo Technology's valuation being over 18 times its net asset value [19]. - Shuduo Technology has reported cumulative revenues of approximately 64 million yuan and losses of about 236 million yuan over the past two and a half years, with a debt ratio of 80.45% [19]. Group 3: Financial Performance - Wantong Development's revenue has been declining, with reported revenues of 422 million yuan, 487 million yuan, and 495 million yuan from 2022 to 2024, alongside increasing losses [46]. - The company's real estate sales and rental income accounted for 99.41% of its total revenue in 2024, indicating that its transition to high-tech sectors has not yet succeeded [48]. - Despite efforts to diversify, the company continues to rely heavily on its real estate foundation for survival [48].

Core Viewpoint - Beijing Wantong New Development Group Co., Ltd. (600246.SH) has faced setbacks in its cross-industry plans following the termination of a merger and acquisition (M&A) plan, with a recent announcement of overdue financial assistance amounting to $43.19 million [1][10]. Financial Assistance and M&A Plans - The overdue financial assistance of $50 million was intended for equity acquisition, aiming to transition into the optical communication industry [1][3]. - The financial assistance was provided to Source Photonics (Chengdu) Co., Ltd., with the goal of acquiring shares in Source Photonics Holdings [3][10]. - The M&A plan involved a cash purchase of at least 51% of Source Photonics, which was expected to constitute a significant asset restructuring [3][7]. Board Opposition and Regulatory Scrutiny - Two board members opposed the financial assistance and M&A proposals, citing insufficient time for review [2][4]. - The board meeting to approve these plans was held just three days after the notice was sent, raising concerns about the rushed decision-making process [2][3]. - Regulatory authorities raised questions regarding the company's capability to integrate assets and operate in the new industry, as well as potential speculative motives behind the plans [6][9]. Financial Details and Performance Metrics - The proposed acquisition price for 60.16% of Source Photonics was approximately $324 million, with funding sources split between self-funding (40%) and external financing (60%) [7][9]. - As of April 2024, Source Photonics had total assets of approximately ¥2.372 billion and total liabilities of about ¥1.734 billion [8]. - Source Photonics' revenue for 2022 and 2023 was ¥1.501 billion and ¥1.293 billion, respectively, with net profits of ¥125 million and a loss of ¥17.49 million [8]. Termination of M&A Plan - The M&A plan was ultimately terminated due to changes in the external environment and disagreements on certain commercial terms among the parties involved [9]. - Despite the failure of the M&A plan, the company stated that it gained experience for future technology industry layouts [9]. Overdue Financial Assistance - The overdue financial assistance was split into two payments, with only $6.81 million of the principal repaid by May 31, 2024, leaving $43.19 million overdue [10][12]. - The financial assistance was considered a critical part of the M&A plan, and the company initiated arbitration against the involved parties due to the overdue amount [12][13].