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Zhen Shi Shares: Related procurement and sales data 'inconsistent disclosure' General manager of supplier supporting dozens of billions in purchases may exit shares abruptly

The Golden Certificate Research Institute, Southern Capital Center. Author: Zhi Lu / Risk Control: Nanjiang, Yingwei.

On January 29, 2026, Zhejiang Zhen Shi New Materials Co., Ltd. (hereinafter referred to as 'Zhen Shi Shares') was listed on the Shanghai Stock Exchange at an issue price of 11.18 yuan per share, with an opening price of 30 yuan per share. On its first day of listing, Zhen Shi Shares’ stock price surged by 121.65%.

On the other side of the listing, Zhen Shi Shares’ related party sales volume might be 'inconsistently disclosed' compared to the purchase amount disclosed by the second largest shareholder. Moreover, Zhen Shi Shares’ actual controller served as a senior executive of a state-owned enterprise for several years. This state-owned enterprise is Zhen Shi Shares’ largest supplier, having supported over 7 billion yuan in purchases by Zhen Shi Shares in the past three years plus one recent period. Behind this cooperation, Yang Guoming, the general manager of the supplier, previously held indirect shares in Zhen Shi Shares until he gradually transferred his shares between June and July 2025, indirectly exiting his stake in Zhen Shi Shares.

1. Cash collection ratio and net cash ratio are less than 1, associated sales revenue and the second shareholder's disclosed procurement amount may show 'inconsistent information disclosure'

Companies planning to go public should disclose related-party transactions truthfully, accurately, and completely. However, research has found that the sales data disclosed by Zhen Shi Co., Ltd. to related parties may be 'inconsistent' with the procurement data disclosed by the related parties.

1.1 Revenue and net profit reversed in 2023-2024, both cash collection ratio and net cash ratio were less than 1

According to the prospectus dated January 23, 2026 (hereinafter referred to as the 'prospectus signed on January 23, 2026'), Zhen Shi Co., Ltd.'s operating income for 2022-2024 and January-June 2025 was 5.267 billion yuan, 5.124 billion yuan, 4.439 billion yuan, and 3.275 billion yuan, respectively; net profits for the same period were 781 million yuan, 793 million yuan, 607 million yuan, and 404 million yuan, respectively.

After calculation, Zhen Shi Co., Ltd.'s operating income decreased by 2.72% and 13.37% year-on-year for 2023-2024, respectively, while net profits increased by 1.53% and decreased by 23.43% year-on-year, respectively.

According to the review report, Zhen Shi Co., Ltd.'s operating income from January to September 2025 was 5.397 billion yuan, an increase of 77.06% over the previous year, and net profit was 431 million yuan, an increase of 39.89% over the previous year.

In other words, Zhen Shi Co., Ltd.'s operating income showed negative growth for two consecutive years in 2023-2024, and net profit also started to decline in 2024. By January-September 2025, Zhen Shi Co., Ltd.'s revenue and net profit growth rates turned positive again.

According to the prospectus signed on January 23, 2026, Zhen Shi Co., Ltd.'s net cash flow from operating activities for 2022-2024 and January-June 2025 was -208 million yuan, -409 million yuan, 103 million yuan, and 106 million yuan, respectively. During the same period, the cash received from selling goods and providing services was 3.059 billion yuan, 4.088 billion yuan, 2.373 billion yuan, and 1.89 billion yuan, respectively.

After calculation, Zhen Shi Co., Ltd.'s cash collection ratio for 2022-2024 and January-June 2025 was 0.58, 0.8, 0.53, and 0.58, respectively. The net cash ratio for 2024 and January-June 2025 was 0.17 and 0.26, respectively.

In other words, Zhen Shi Co., Ltd.'s cash collection ratio and net cash ratio were also less than 1 during 2022-2024.

Zhen Shi Co., Ltd. disclosed that in 2024, no income was generated from the sale of goods or provision of services to Zhen Shi Group, the second largest shareholder

According to the prospectus signed on January 23, 2026, as of the signing date of the prospectus on January 23, 2026,The actual controllers of Zhen Shi Co., Ltd. are Zhang Yuqiang and Zhang Jiankan, who are father and son. Zhang Yuqiang and Zhang Jiankan, through Tongxiang Huajia Enterprise Management Co., Ltd. (hereinafter referred to as 'Tongxiang Huajia'), Tongxiang Zeshi Trading Partnership (Limited Partnership) (hereinafter referred to as 'Tongxiang Zeshi'), and Zhen Shi Holding Group Co., Ltd. (hereinafter referred to as 'Zhen Shi Group'), collectively control 96.51% of Zhen Shi Co., Ltd.'s shares.

As of the signing date of the prospectus on January 23, 2026,Zhen Shi Group directly holds 39.4% of Zhen Shi Co., Ltd.'s shares and is the second largest shareholder of Zhen Shi Co., Ltd.andZhang Yuqiang,Tongxiang Wushi Trading Co., Ltd. (hereinafter referred to as 'Tongxiang Wushi') and Zhou Senlinhold 72.31%, 25.9%, and 1.79% of Zhen Shi Group respectively. Among them, Tongxiang Wushi is directly and indirectly held by Zhang Jiankan at 100%.

Zhen Shi Group is the second largest shareholder of Zhen Shi Co., Ltd., and is controlled by the actual controller of Zhen Shi Co., Ltd.

According to the prospectus signed on January 23, 2026, the related party transaction amounts for sales of goods and provision of services by Zhen Shi Co., Ltd. in 2022-2024 and January-June 2025 were 42.3317 million yuan, 19.3926 million yuan, 5.0138 million yuan, and 0.8944 million yuan, respectively.

In 2022-2024 and January-June 2025, the amounts for sales of goods or provision of services by Zhen Shi Co., Ltd. to non-commonly controlled related parties were 15.5205 million yuan, 6.7224 million yuan, 5.0138 million yuan, and 0.8944 million yuan, respectively. The amounts for sales of goods or provision of services to commonly controlled related parties were 26.8112 million yuan, 12.6701 million yuan, 0 yuan, and 0 yuan, respectively.

Among these, in 2022-2023, the revenue generated from sales of goods or provision of services by Zhen Shi Co., Ltd. to Zhen Shi Group and its subsidiaries was 26.8112 million yuan and 12.6701 million yuan, respectively. No relevant revenue was generated in 2024 and the first half of 2025.

namelyIn 2024, Zhen Shi Co., Ltd. did not generate any income from sales of goods or provision of services to Zhen Shi Group, its second largest shareholder.。

However, this situation may differ from the information disclosed by Zhen Shi Group.

1.3 According to the disclosure by Zhen Shi Group, in 2024, Zhen Shi Group purchased over three million yuan worth of goods from a subsidiary of Zhen Shi Co., Ltd.

According to the prospectus signed on January 23, 2026,In April 2023,Zhen Shi Group used its 100% equity interest in Zhen Shi Hua Mei New Materials Co., Ltd. (hereinafter referred to as 'Zhen Shi Hua Mei') as consideration for capital increase in Heng Shi Limited (the predecessor of Zhen Shi Co., Ltd.). As of now,Zhen Shi Hua Mei has become a wholly-owned subsidiary of Heng Shi Limited.During 2022-2024 and January-June 2025,Zhen Shi Hua Mei is included within the consolidated financial statements of Zhen Shi Co., Ltd.

According to the fourth super short-term financing prospectus signed by Zhen Shi Group on November 6, 2025, for the year 2025 (hereinafter referred to as the 'November 6, 2025 Zhen Shi Group Financing Prospectus'), from 2023 to2024, the procurement amounts that Zhen Shi Group made from Zhen Shi Hua Mei were 4.1953 million yuan and 3.7999 million yuan respectively, with the purchased content being raw materials.

It can be seen that Zhen Shi Hua Mei is a subsidiary of Zhen Shi Co., Ltd., and during the periods from 2022 to 2024 and January to June 2025, it was included in the consolidated scope of Zhen Shi Co., Ltd. According to data disclosed by Zhen Shi Group, in 2024, Zhen Shi Group purchased more than three million yuan worth of raw materials from Zhen Shi Co., Ltd. and its subsidiaries. However, in the prospectus signed on January 23, 2026, Zhen Shi Co., Ltd. disclosed that in 2024, no income related to sales of goods or provision of services was generated from its second largest shareholder, Zhen Shi Group.

Further research found that changes in the consolidation scope, accounting policy changes, and corrections of accounting errors may not have impacted the aforementioned differences.

1.4 Changes in the consolidation scope, accounting policy changes, and corrections of accounting errors may not have affected the data discrepancies.

According to the prospectus signed on November 19, 2025, during the reporting period from 2022 to 2024 and January to June 2025, the number of entities included in the consolidated financial statements of Zhen Shi Co., Ltd. increased by 21 and decreased by four. Among them, four entities were included in the consolidated financial statements through mergers, all occurring in 2023. The four entities removed from the consolidated scope ceased operations during the period from 2022 to 2025.

Meanwhile, during the periods from 2022 to 2024 and January to June 2025, Zhen Shi Co., Ltd. corrected an accounting error by re-evaluating the credit risk of accounts receivable from Zhong Ke Yu Neng Technology Development Co., Ltd. and its subsidiaries at the end of 2024. In line with the principle of prudence, the method of providing for bad debts was adjusted from being calculated based on aging groups to individual impairment tests, with the provisioning ratio adjusted to 30%. When preparing the three-year and one-period financial statements, the retrospective restatement method was used to correct this error. During the same period, Zhen Shi Co., Ltd. did not experience any changes in accounting estimates, and accounting policy changes may not have involved the above-mentioned transaction data.

According to the offering circular of Zhen Shi Group dated November 6, 2025, and Zhen Shi Group's audited consolidated and parent company financial reports for the fiscal year 2024 released on August 29, 2025 (hereinafter referred to as 'Zhen Shi Group 2024 Annual Report'), there were no changes in consolidation scope caused by business combinations in Zhen Shi Group during 2024 and January to September 2025. Moreover, there were no significant changes in accounting policies, accounting estimates, or corrections of accounting errors.

In summary, Zhen Shi Group is the second largest shareholder of Zhen Shi Co., Ltd., controlled by Zhang Yuqiang and Zhang Jiankan, the actual controllers of Zhen Shi Co., Ltd., making it an affiliate of Zhen Shi Co., Ltd. Against this backdrop, Zhen Shi Co., Ltd. disclosed that in 2024, it did not generate any income from sales of goods or provision of services to Zhen Shi Group, its second largest shareholder. However, Zhen Shi Group disclosed that during the same period, it purchased raw materials from Zhen Shi Hua Mei, a subsidiary of Zhen Shi Co., Ltd., with an amount exceeding three million yuan. Changes in the consolidation scope, accounting policies, or corrections of accounting errors of Zhen Shi Co., Ltd. and Zhen Shi Group might not have impacted the discrepancies in the aforementioned data.

China Jushi, as a supplier, has supported procurement worth over 7 billion yuan, and its General Manager Yang Guoming may have 'unexpectedly' divested shares in Zhen Shi Co., Ltd.

From small details, one can infer the larger picture; seeing one leaf fall indicates the approach of autumn. Research shows that Zhen Shi Co., Ltd.'s largest supplier is a state-owned public company, from which Zhen Shi Co., Ltd. procured over 90% of its fiberglass over the past three years and the most recent period. Behind this cooperation, the actual controller of Zhen Shi Co., Ltd. once served as the General Manager of this state-owned public company. After his resignation, an indirect shareholder of Zhen Shi Co., Ltd. took over as the General Manager of the state-owned public company. By June to July 2025, this indirectly participating shareholder indirectly exited its stake in Zhen Shi Co., Ltd. through share conversion.

Over the past three years and the most recent period, more than 90% of fiberglass was procured from China Jushi, with cumulative procurement exceeding 7 billion yuan.

According to the prospectus signed on January 23, 2026, China Jushi Co., Ltd. (hereinafter referred to as 'China Jushi') is the largest supplier of Zhen Shi Co., Ltd. From 2022 to 2024 and January to September 2025, the procurement amounts from China Jushi for fiberglass and other materials by Zhen Shi Co., Ltd. were 2.112 billion yuan, 1.895 billion yuan, 2.035 billion yuan, and 1.518 billion yuan respectively.The proportions of these purchases to operating costs were 52.98%, 50.24%, 62.43%, and 62.64% respectively.

During the same period,the proportion of fiberglass procurement amounts from China Jushi to the total fiberglass procurement amounts by Zhen Shi Co., Ltd. were 99.96%, 99.95%, 99.83%, and 96.15% respectively.Additionally, during the same period, general related-party transactions such as electricity procurement, related sales, and related leasing also existed between Zhen Shi Co., Ltd. and China Jushi.

It is evident that over the past three years and the most recent period, Zhen Shi Shares has cumulatively purchased glass fiber from China Jushi for more than 700,000 yuan.

Let us now turn our attention to the shareholder background of China Jushi.

China Jushi is controlled by China National Building Material Group (CNBM), while Zhen Shi Shares' actual controller owns an enterprise that ranks as the second-largest shareholder of China Jushi.

According to the prospectus signed on January 23, 2026, China Jushi is a related party of Zhen Shi Shares. As of October 15, 2025, Zhen Shi Group, the second-largest shareholder of Zhen Shi Shares, holds a direct stake of 16.88% in China Jushi, while Zhang Yuqiang and Zhang Jiankan, the actual controllers of Zhen Shi Shares, hold direct stakes of 0.0018% and 0.33%, respectively, in China Jushi.

Based on China Jushi's annual reports and the financing bond offering document signed by Zhen Shi Group on November 6, 2025, China Jushi was established on August 31, 1998, with its predecessor being China Chemical Building Materials Co., Ltd.At the time of China Jushi's establishment,China National Building Materials Group (hereinafter referred to as 'CNBM'),Zhen Shi Group,Jiangsu Yonglian Group Corporation, and China National Building Materials Co., Ltd. (hereinafter referred to as 'CNBM') contributed capital to China Jushi at respective percentages of 56.68%,33.39%、6.36%、3.57%。

Among these entities, CNBM is a state-owned enterprise, while Zhen Shi Group was then funded by the Tongxi Glass Employee Security Fund Management Association and the Employee Stock Ownership Association, contributing 90.23% and 9.77%, respectively, with Zhang Yuqiang serving as chairman.

According to the annual reports of China Jushi and Zhen Shi Group for each period, from 2022 to 2024, as well as January to June 2025,China National Building Material (CNBM) and Zhen Shi Group are respectively the controlling shareholder and the second largest shareholder of China Jushi. Among them, CNBM is a state-owned entity,and it is the actual controller of China Jushi, controlled by the Building Materials Group. However, Zhen Shi Group is a non-state-owned entity, controlled by one of Zhen Shi Co., Ltd.'s actual controllers, Zhang Yuqiang.

It should be noted that although China Jushi is controlled by the state-owned enterprise CNBM, one of Zhen Shi Co., Ltd.'s actual controllers, Zhang Yuqiang, served as the general manager of China Jushi for several years.

From 2022 to March 2024, the actual controller of Zhen Shi Co., Ltd., Zhang Yuqiang, served as the general manager of the state-owned enterprise China Jushi.

According to the prospectus signed on January 23, 2026,The actual controllers of Zhen Shi Co., Ltd., Zhang Yuqiang and Zhang Jiankan, have long held relevant positions at China Jushi.At the beginning of the reporting period, starting in 2022,Zhang Yuqiangserved as a director and vice chairman of China Jushi and had previously served asAt the beginning of the reporting period, namely from 2022 to March 2024, he served as the general manager.From the start of the reporting period in 2022, Zhang Jiankan has served as a director of China Jushi.

According to an announcement by China Jushi in March 2024 regarding the resignation of the general manager and the appointment of a new one,Zhang Yuqiang has served as the general manager of China Jushi since 2005.

During the period when China Jushi was controlled by China National Building Material, Zhang Yuqiang had served as the company’s general manager for several years.

Notably, after Zhang Yuqiang resigned from his position as general manager of China Jushi, the new directors of China Jushi still maintained 'associations' with Zhen Shi shares.

In April 2024, Yang Guoming became the general manager of China Jushi and indirectly held shares in Zhen Shi until 2025.

According to the announcement issued by China Jushi on March 18, 2024, titled 'Change in Directors, General Manager, and Deputy General Manager,' China Jushi recently received the resignation report from General Manager Zhang Yuqiang. Due to work adjustments, Zhang Yuqiang applied to resign from his position as general manager of China Jushi.

In accordance with relevant regulations, Mr. Zhang Yuqiang's resignation report became effective upon delivery to the board of directors. After stepping down as general manager, Zhang Yuqiang will continue to serve as the vice chairman of China Jushi and hold relevant positions in the board’s special committees, continuing to play a role in strategic oversight and major decision-making within the China Jushi board.

March 18, 2024On April 10, 2024, China Jushi convened the eleventh meeting of its seventh board of directors, during which they reviewed and approved the proposal regarding the resignation of the company’s general manager and the appointment of a new general manager. In line with operational needs, following the nomination by the chairman and the review by the board's nomination committee,The board of directors of China Jushi agreed to appoint Yang Guoming as the general manager,with the term of office commencing from the date of approval by the board of directors until the expiration of the term of the seventh board of directors.

According to the supplementary prospectus for the tenth series of innovation bonds issued by China Jushi on December 1, 2025, as of December 1, 2025, Yang Guoming remains a director and general manager of China Jushi,with his term beginning on April 10, 2024.。

Moreover, Yang Guoming also previously held an indirect stake in Zhenshi Co., Ltd.

According to the prospectus signed on January 23, 2026, prior to this issuance, Zhenshi Group and Tongxiang Zeshi Trading Partnership (Limited Partnership) (“Tongxiang Zeshi”) directly held 39.4% and 0.84% equity stakes in Zhenshi Co., Ltd., respectively. The most recent change in Zhenshi Co., Ltd.'s equity structure occurred on June 29, 2023.

In other words,Since June 29, 2023, Zhenshi Co., Ltd. has been held by Zhenshi Group and Tongxiang Zeshi at 39.4% and 0.84%, respectively.

Furthermore, according to the financing prospectus of Zhenshi Group dated November 6, 2025, and data from the Market Supervision Administration, between March 2015 and January 2024, Yang Guoming directly held 0.66% of Zhenshi Group. In January 2024, Yang Guoming transferred 0.05% of his equity in Zhenshi Group to Tongxiang Wushi.In July 2025, Yang Guoming transferred all of his 0.6114% equity stake in Zhenshi Group to Tongxiang Wushi. Afterward, Yang Guoming no longer holds any shares in Zhenshi Group.

Furthermore, according to data from the Market Supervision Administration and the prospectus signed on January 23, 2026, Tongxiang Zeshi was established in April 2023, at which time Yang Guoming already held shares in Tongxiang Zeshi.On June 11, 2025, Yang Guoming withdrew his shares from Tongxiang Zeshi. As of February 1, 2024, Yang Guoming's subscribed capital contribution ratio to Tongxiang Zeshi was 20.35%.

According to public information from the Shanghai Stock Exchange, on June 25, 2025, Zhen Shi Co.'s application for listing on the main board of the Shanghai Stock Exchange was accepted.

In other words, Yang Guoming succeeded Zhang Yuqiang as the general manager of China Jushi in April 2024. Prior to June 2025, Yang Guoming indirectly held shares in Zhen Shi Co. through Zhen Shi Group and Tongxiang Zeshi. In June 2025, the Shanghai Stock Exchange accepted Zhen Shi Co.'s listing application materials. Between June and July 2025, Yang Guoming gradually transferred his shares in Zhen Shi Group and Tongxiang Zeshi, thereby indirectly exiting his stake in Zhen Shi Co.

In summary, during 2022-2024 and the first half of 2025, more than 90% of Zhen Shi Co.'s glass fiber purchases were made from its largest supplier, China Jushi, with cumulative purchases exceeding 7 billion yuan. China Jushi is controlled by the state-owned enterprise China National Building Materials and partly owned by Zhen Shi Co.'s actual controller. Against this backdrop, Zhen Shi Co.'s actual controller served as the general manager of China Jushi for many years until stepping down in March 2024.

III. Conclusion

For this initial public offering, not only do Zhen Shi Co.'s related sales figures differ from the procurement data disclosed by its second-largest shareholder, potentially indicating 'inconsistent disclosure,' but its relationship with its largest supplier, China Jushi, also merits attention. Over the past three years and the latest period, more than 90% of Zhen Shi Co.'s glass fiber purchases came from China Jushi, with total procurement amounting to over 7 billion yuan. Zhen Shi Co.'s actual controller, Zhang Yuqiang, served as the general manager of the state-owned enterprise China Jushi for many years until stepping down in March 2024. Yang Guoming, who took over as general manager of China Jushi, previously held an indirect stake in Zhen Shi Co. Between June and July 2025, Yang Guoming gradually transferred his shares in Zhen Shi Group and Tongxiang Zeshi, thereby indirectly exiting his stake in Zhen Shi Co.

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