Core Viewpoint - The controlling shareholder of Zhuoyue Technology, Xia Chuanwu, is set to undergo a change as approximately 70.75 million shares (12.48% of total shares) will be auctioned off due to legal issues, potentially altering the company's control structure [2][4][6]. Group 1: Shareholder Changes - Xia Chuanwu's 70.75 million shares, representing 12.48% of Zhuoyue Technology's total shares, are scheduled for judicial auction [4][6]. - If the auction is successful, Xia's shareholding will decrease from 12.76% to 0.28%, resulting in a change of the company's controlling shareholder [6][8]. Group 2: Legal Issues - Xia Chuanwu has been sentenced to seven years in prison for market manipulation and insider trading, along with a fine of 45 million yuan [7]. - The court's decision also includes the recovery of Xia's illegal gains, which will be turned over to the state treasury [7]. Group 3: Company Performance - Zhuoyue Technology has been experiencing continuous losses from 2020 to 2024, with a significant reduction in employee numbers from over 15,000 to less than 3,600 [11]. - In 2024, the company reported a revenue of 1.707 billion yuan, a 10.30% increase year-on-year, but still posted a net loss of 217.86 million yuan, although this was a 46.93% improvement compared to the previous year [12][13]. - The company's gross margin has fluctuated significantly, with a notable decline in previous years, but has shown some recovery in 2024 [13].

Core Viewpoint - The actual controller of Zhuoyue Technology, Xia Chuanwu, may lose control of the company due to his conviction for securities market manipulation and insider trading, resulting in a 7-year prison sentence and a fine of 45 million yuan [1][7]. Company Situation - Zhuoyue Technology has reported continuous net losses over the past five years, accumulating losses exceeding 1.475 billion yuan [3][11]. - As of the end of Q3 2024, the company's debt ratio reached a record high of 77.28% [4][11]. - The company anticipates a net loss of 175 million to 225 million yuan for 2024, with a narrowed loss attributed to strategic adjustments and improved internal management [10]. Shareholder Changes - Xia Chuanwu's shares, totaling 70.7539 million, which account for 97.84% of his holdings, are subject to auction, potentially leading to a change in the company's actual controller [4][8]. - The company has stated that the change in actual control will not significantly impact its operations [5][8]. Legal Proceedings - Xia Chuanwu has appealed the first-instance judgment, and the final outcome will depend on the higher court's decision [2][7]. - The company has faced regulatory scrutiny, with past penalties imposed for insider trading and market manipulation [6][7].