Fuhua Chemical's IPO controversy: Is dividend and fundraising contradictory?

Recently, Fuhua Tongda Chemical Co., Ltd. (hereinafter referred to as "Fuhua Chemical") has been embroiled in a controversy over its initial public offering (IPO) due to its massive dividends and fundraising plans.

The company's IPO filing shows that Fuhua Chemical has paid out massive dividends of RMB 33 billion in 2021 and 2022, with plans to raise up to RMB 60 billion through the IPO.

Some critics have questioned whether this IPO is a "money-making" move for the company's shareholders, citing concerns that the dividend payout may not be sustainable.

Others have pointed out that Fuhua Chemical has a high debt ratio of over 87% in 2022, which may require the company to raise funds through various means, including dividends and fundraising.

The controversy surrounding Fuhua Chemical's IPO has sparked debate among investors and financial experts, with some arguing that the move is a sign of the company's weakness rather than its strength.