Core Viewpoint - The resignation of two executives from Meizhi Co., Ltd. shortly after the release of the Q3 report raises concerns about the company's governance and performance, especially given the historical context of executive turnover following financial disclosures [1][2]. Executive Changes - Two executives, Li Suhua and Li Bi Jun, were removed from their positions as non-independent directors, with Li Bi Jun being the daughter of Li Suhua, the former actual controller of the company [1]. - The recent resignations follow a pattern of executive changes that have occurred after the release of quarterly reports, indicating potential governance issues within the company [1][2]. Company Background - Meizhi Co., Ltd. was founded in 1984 and initially struggled as a small decoration company, nearly facing bankruptcy before being revitalized by Li Suhua [2]. - In December 2020, Li Suhua transferred 29.99% of his shares to Guangdong Yijian, marking a significant change in control, with Guangdong Yijian becoming the new controlling shareholder [2]. Financial Performance - The company has reported continuous losses from 2021 to 2024, with net profits of -161 million, -143 million, -174 million, and -257 million yuan respectively [6]. - In the first half of 2023, revenue and net profit both declined significantly, with revenue dropping by 66.47% to approximately 123 million yuan and net profit loss of 34.76 million yuan, a 55.25% decrease year-on-year [6][12]. Legal Issues - Li Suhua is currently involved in a legal dispute with Guangdong Yijian regarding performance guarantees related to the company's financial results from 2021 to 2023, with a compensation amounting to approximately 348 million yuan [7][8]. - The ongoing litigation is in the second-instance stage, indicating unresolved issues that could impact the company's financial stability [8]. Business Operations - Meizhi Co., Ltd. focuses on decoration and renovation, with its main business segments including public building decoration and residential renovation [10]. - In the first half of 2023, the decoration segment accounted for 53.35% of total revenue, while construction engineering decoration contributed 42.54% [11][12]. Asset Management - To improve liquidity and focus on core business operations, the company announced plans to sell 50 properties with a total area of 3,097.90 square meters, with a minimum valuation of approximately 39.31 million yuan [10]. Financial Ratios - The company's debt-to-asset ratio has been increasing, reaching 95.05% in the first half of 2023, indicating a concerning level of financial leverage [12].