Core Viewpoint - Zhejiang Zhenstone New Materials Co., Ltd. (Zhenstone) is attempting to re-enter the capital market after a six-year hiatus following its privatization in 2019, facing significant financial pressures and high debt levels during its IPO process [2][3][4]. Financial Performance - Zhenstone's core business focuses on the research, production, and sales of fiber-reinforced materials for clean energy, with revenue and net profit declining significantly in 2024 [3][4]. - The company's revenue figures from 2022 to 2024 were approximately 5.267 billion yuan, 5.124 billion yuan, and 4.439 billion yuan, respectively, while net profits were about 774 million yuan, 790 million yuan, and 608 million yuan [3][4]. Debt Levels - As of the end of 2024, Zhenstone's total short-term and long-term borrowings exceeded 4 billion yuan, with an asset-liability ratio consistently higher than the industry average by about 12 percentage points [2][4]. - The asset-liability ratios for the respective years were 71.53%, 71.3%, and 67.75%, compared to industry averages of 58.11%, 52.6%, and 55.7% [4]. Dividend Payments - Prior to the IPO application, Zhenstone distributed substantial cash dividends totaling approximately 1.14 billion yuan over two years, raising concerns about its financial management amid rising debt [5][6]. - The cash dividends for 2022 and 2023 were approximately 540 million yuan and 600 million yuan, representing 69.77% and 75.95% of the respective net profits [6]. Related Party Transactions - Zhenstone's supply chain exhibits a high concentration of related party transactions, with over 68% of its operating costs linked to purchases from related parties, particularly China Jushi [8][10]. - The company purchased goods and services from related parties amounting to 2.643 billion yuan, 2.185 billion yuan, and 2.235 billion yuan from 2022 to 2024, with respective proportions of 66.29%, 57.95%, and 68.59% of operating costs [10]. Governance and Control - The actual controllers of Zhenstone, Zhang Yuqiang and Zhang Jiankang, hold a combined 96.51% stake in the company, raising questions about governance and potential conflicts of interest [5][6].

Core Viewpoint - Zhejiang Zhenshi New Materials Co., Ltd. (Zhenshi) is attempting to re-enter the capital market after a six-year hiatus following its privatization in 2019, but faces significant financial pressures with declining revenues and high debt levels as it seeks to raise approximately 39.81 billion yuan through its IPO [1][4][5]. Financial Performance - Zhenshi's revenue and net profit have shown a downward trend from 2022 to 2024, with revenues of approximately 52.67 billion yuan, 51.24 billion yuan, and 44.39 billion yuan, and net profits of about 7.74 billion yuan, 7.9 billion yuan, and 6.08 billion yuan respectively [4][5]. - The company's asset-liability ratio has remained high, with figures of 71.53%, 71.3%, and 67.75% over the same period, significantly above the industry average by approximately 12 percentage points [5][6]. Debt Situation - As of the end of 2024, Zhenshi's total short-term and long-term borrowings exceeded 40 billion yuan, with short-term borrowings around 15.87 billion yuan and long-term borrowings approximately 24.33 billion yuan [5][6]. Dividend Policy - Despite high debt levels, Zhenshi has distributed substantial cash dividends totaling about 11.4 billion yuan over the past two years, with 2022 and 2023 dividends of approximately 5.4 billion yuan and 6 billion yuan, representing 69.77% and 75.95% of the respective net profits [7][8]. Related Party Transactions - Zhenshi has engaged in significant related party transactions, with amounts of 28.11 billion yuan, 22.79 billion yuan, and 22.56 billion yuan over the reporting periods, constituting 70.49%, 60.42%, and 69.22% of the operating costs [9][10]. - A notable portion of these transactions involves China Jushi, Zhenshi's main supplier of glass fiber, with procurement amounts of approximately 21.12 billion yuan, 18.95 billion yuan, and 20.35 billion yuan, making up 52.98%, 50.24%, and 62.43% of operating costs respectively [10].