Core Viewpoint - The control transfer negotiation of Zhonghuan Hailu (301040) has ended due to price disagreements, despite the initial perception of a "9 billion cash-out plan" [1][3]. Company Overview - Zhonghuan Hailu's actual controllers, Wu Jun San and Wu Jian, have terminated negotiations with potential buyers, citing differences in future development plans, although market speculation points to valuation disputes as the main issue [1][3]. - The company was established from a loss-making subsidiary of Zhangjiagang Boiler Factory, and under Wu Jun San's leadership, it transformed from a struggling entity to a publicly listed company, first on the New Third Board in 2015 and then on the ChiNext in 2021 [3][5]. Financial Performance - The company's performance post-IPO has been disappointing, with profits declining sharply in the year following its listing, leading to losses in the third year [3][5]. - Despite the stock price being driven up to 40 yuan (double the issue price) due to expectations of a change in control, potential buyers were unwilling to pay a premium for a company with poor performance [3][5]. Industry Context - The ring forgings industry, where Zhonghuan Hailu operates, has high technical barriers, with products used in critical applications such as wind power flanges, nuclear pipelines, and aircraft engines [5]. - The complexity of the manufacturing process and the limited number of stable suppliers in China highlight the company's technical capabilities and investment in equipment [5]. Management and Future Outlook - The aging of Wu Jun San and his son Wu Jian, along with the competitive nature of the manufacturing industry, may have influenced their desire to exit the business [5]. - The failed negotiations indicate a persistent urgency for the controllers to divest, raising questions about the initial intentions behind the IPO and the company's future governance [5]. - The ongoing uncertainty regarding control transfer, coupled with high stock prices and poor performance, suggests that the company may be preparing for a third attempt at a transaction, although valuation disagreements remain a significant hurdle [5].