Core Viewpoint - Shenzhen Huaxida Technology Co., Ltd. has submitted an application for listing on the Hong Kong Stock Exchange after previously withdrawing its application for the Beijing Stock Exchange due to concerns over the authenticity of its financial statements [1][2]. Financial Authenticity Concerns - Huaxida faced three rounds of inquiries from the Beijing Stock Exchange regarding the authenticity and sustainability of its financial performance, particularly questioning the significant growth in trade revenue and the relationship with its largest customer, Smart Media [2][4]. - The company has a high proportion of accounts receivable relative to total assets, yet it maintains the lowest bad debt provision ratio among its peers, raising questions about its accounting policies [10][14]. Customer Relationships and Revenue - Smart Media, a related party and major customer, contributed over 800 million yuan to Huaxida's revenue in 2021 and 2022, accounting for more than 20% of total revenue during those years [6][14]. - The establishment of Smart Media shortly before it became a major customer raises suspicions about the legitimacy of the transactions between Huaxida and Smart Media, as well as the necessity of using Smart Media as an intermediary [7][6]. Audit and Reporting Issues - Huaxida announced it would be unable to disclose its 2024 annual report on time, citing the complexity of the audit process related to its application for overseas listing [8][9]. - The company has previously made multiple corrections to its financial data, which has led to skepticism regarding the reliability of its financial statements [8][9]. Comparison with Peers - Huaxida's accounts receivable as a percentage of total assets were significantly higher than those of comparable companies, with figures of 45.41%, 42.3%, and 36.85% for 2022, 2023, and 2024 respectively [10][11]. - The bad debt provision ratio for Huaxida was notably lower than that of its peers, with 4.65% for both 2022 and 2023, compared to an average of over 10% for comparable companies [14].