Core Viewpoint - Wan'an Technology plans to acquire a 40% stake in Changchun Faw Wan'an Brake Control System Co., Ltd. from Faw Shares for 26.22 million yuan, aiming to enhance operational efficiency and maximize business benefits, despite facing financial pressures [1][2]. Financial Performance - In the first half of 2025, Wan'an Technology reported a revenue of 2.165 billion yuan, a year-on-year increase of 14.91%, but the net profit attributable to shareholders decreased by 2.13% to 85.18 million yuan [1]. - In 2024, the company achieved a revenue of 4.336 billion yuan, up 8.87%, while the net profit dropped by 33.90% to 211 million yuan [1]. Accounts Receivable and Inventory Concerns - As of mid-2025, Wan'an Technology's accounts receivable reached 1.214 billion yuan, representing a significant portion of total assets, with increasing turnover days over the past four years [2]. - The company's inventory value stood at 819 million yuan, with a provision for inventory impairment of 67.51 million yuan [2]. Cash Flow and Debt Situation - The net cash flow from operating activities combined with investment activities was -170 million yuan, while financing activities also showed a negative cash flow of -110 million yuan [2]. - Total debt amounted to 792 million yuan, with short-term debt constituting 92.22% of the total, indicating substantial short-term repayment pressure [2]. Acquisition of Loss-Making Subsidiary - The target company, Faw Wan'an, reported revenues of 60.58 million yuan and a net loss of 21.99 million yuan in 2024, and in the first half of 2025, it generated 40.40 million yuan in revenue with a net loss of 9.21 million yuan [2]. - Acquiring a loss-making subsidiary may not contribute positively to Wan'an Technology's profits in the short term and could exacerbate performance burdens [2][3].