"China's No. 1 Mattress Stock" reveals an insider! The Shanghai Stock Exchange swiftly intervenes

As the “insider embezzlement case” erupted, Longever’s business fundamentals were also far from optimistic. After years of being stuck in a dilemma of increasing revenue but not increasing profits, founder Chen Aiyu was facing internal troubles and external risks at once.

Known as “China’s No. 1 mattress stock,” Longever has recently been pushed to the forefront of public opinion due to its controlling subsidiary’s funds being illegally transferred and a large amount being frozen.

On the evening of March 27, Longever announced that 100 million yuan of funds belonging to its controlling subsidiary, Xitu Technology Co., Ltd. (hereinafter: Xitu Technology), were illegally transferred by an insider using their position, and the company urgently froze the related accounts of 900 million yuan. The total amount involved and frozen exceeded 1 billion yuan, accounting for 26.54% of the company’s audited net assets in the most recent period and 42.69% of its monetary funds, respectively.

This seemingly single case of fund misappropriation, in hindsight, reflects multiple deep-rooted problems behind the scenes—including issues with subsidiary oversight, fund allocation, the internal control system, and even the family governance model. The 2025 annual report, scheduled to be disclosed on April 25, will also face a double test of audits and internal controls because of this incident.

01

A small subsidiary reveals a “major loophole” in funds

Longever was founded in 1996. Its business includes designing, researching and developing, producing, and selling high-quality deep-sleep products centered on mattresses. Its main products include mattresses, beds, sofas, and other supporting bedroom furniture. They are widely used in households, hotels, apartments, and various commercial scenarios.

The company’s founder and chairman is Chen Aiyu. In 1984, inspired by the Mexican film “Xenusia,” Chen Aiyu, then only 22 years old, started a mattress workshop of only a few dozen square meters with 1,000 yuan, marking the beginning of his entrepreneurial journey.

Public information shows that Longever was listed on the Shanghai Stock Exchange in 2012 and is known as “China’s No. 1 mattress stock.”

The core entity behind this “funds theft,” Xitu Technology, is a wholly owned subsidiary of Longever established in January 2021. Its registered capital is 50 million yuan. According to 2024 business registration information, it had only 8 employees, and its registered address is in Xiaoshan District, Hangzhou, Zhejiang Province.

It is precisely this relatively small subsidiary that, on the books, holds more than 100 million yuan in monetary funds—200% of its registered capital. It accounts for nearly 20% of the total monetary funds of all of Longever’s subsidiaries. — According to the company’s 2025 interim report, the listed company’s consolidated report monetary funds are 1.972 billion yuan, the parent company holds 1.444 billion yuan, and all of its subsidiaries’ total cash is only about 530 million yuan.

At present, it is still unclear when this 100 million yuan was specifically taken—was it transferred all at once or in multiple transfers? Financial professionals have pointed out that if it was transferred in a single batch, what was the authorization level for such a large transfer? If it was taken out in multiple batches, why was it not discovered in the early stages of the incident? If it bypassed regulatory supervision and internal monitoring through the method of splitting transfers into smaller amounts, it would reflect serious loopholes in the company’s fund monitoring system. If it was a one-time transfer of a lump sum, it usually requires approval from the financial controller, general manager, or even the board of directors—not something that a single individual could carry out independently.

After the incident, on March 26, Longever filed a report with the public security authorities and implemented protective account freezes. The company said this freeze was an independent action by the company itself. In the short term, it affected the subsidiary’s use of funds, but it did not constitute a major adverse impact on overall production and operations. The company is currently cooperating with the police to track the case and advance the work of unfreezing accounts and recovering funds.

It is worth noting that Zhou Yaying, the legal representative of Xitu Technology, told the media that she is only a nominal legal representative. This detail further highlights the chaos in personnel management at this subsidiary.

On March 27, the Shanghai Stock Exchange promptly issued a regulatory work letter regarding this matter. The involved parties include the listed company itself, the company’s directors and senior management, as well as the controlling shareholder and the actual controller.

It is worth noting that the company’s share price has cumulatively dropped by more than 22% over the last six trading days. The market still cannot directly link the company’s recent share price performance to the “funds theft” incident.

02

Revenue up, profit not up—high-percentage pledge adds more worries

This “insider incident,” without a doubt, was a test of the company’s cash flow. From financial data, Longever was already under certain pressure.

The 2025 third-quarter report shows that the most prominent signal in the period was profit momentum stalling. During the reporting period, Longever’s operating revenue increased slightly, but profit declined year over year. Its total profit in the third quarter was 140 million yuan, down 8.50% year over year; net profit attributable to shareholders of the listed company was 133 million yuan, down 6.1% year over year; and net profit after excluding non-recurring gains and losses was 134 million yuan, down 6.16% year over year.

Image source: Company financial report

Looking at the data for the first three quarters of 2025, Longever’s selling expenses were about 9.8 times its R&D expenses, indicating that its revenue growth still heavily relies on advertising promotion spending.

In fact, in recent years, Longever has tried to gain brand exposure through hit TV dramas and variety shows. The company once briefly crossed into the film and television industry. In 2015, Longever spent 720 million yuan to acquire Greentown Culture Media, which it then renamed Shengxi Huashi. In that year’s financial report, the net profit brought by that film and television business accounted for about one-third of Longever’s total profit.

However, the film and television business continued to record losses afterward. In its 2020 performance report, Longever said it would divest the film and television business and refocus on its furniture main business, bringing an end to its cross-industry attempt.

After returning comprehensively to its core business, Longever’s performance still showed the pattern of “revenue up, profit not up.” From 2020 to 2024, Longever’s revenue scale kept expanding—from 5.623 billion yuan steadily rising to 8.729 billion yuan. Meanwhile, net profit attributable to the parent fluctuated sharply over the same period: 313 million yuan, 559 million yuan, 238 million yuan, 429 million yuan, and 322 million yuan over five years. The profit growth bottleneck has become a sharp blade hanging over the company’s head.

In addition, the recent pledging situation of the company’s controlling shareholder has also drawn market attention.

According to an announcement in January 2026, Longever’s controlling shareholder and persons acting in concert with it have a relatively high pledge ratio. Collectively, they pledged 59.01% of their total holdings, accounting for 21.46% of the company’s total share capital.

More worryingly, within the next six months, 283 million yuan in pledged financing will mature; and within one year, another 200 million yuan will mature.

In its latest announcement, Longever admitted that this matter could have some adverse impact on the normal use and turnover of funds by its controlling subsidiaries in the short term. However, the company emphasized that after taking the cash flow situation comprehensively into account, it would not temporarily constitute a major adverse impact on overall production and business activities.

But the market clearly remains cautious—after the announcement was released, the company’s share price came under pressure. The exposure of this insider incident has undoubtedly further amplified external concerns about the company’s internal control system and governance level.

In 2022, Chen Aiyu delegated the position of president to his son, Chen Yicheng. With father and son fighting together, in the face of market pressure, these years they have been accelerating Longever’s deployment in the sleep technology field and set 2025 as the company’s “AI Year.” They are actively推进 the transformation from a traditional furniture manufacturer to a technology-based sleep solutions provider, launching a smart sleep ecosystem brand “aise BaoBao” series, as well as product lines such as the aise BaoBao Cloud Enjoy series and the Longever AI Jingmian E series. However, up to now, the company has not disclosed specific sales data, and its actual market effectiveness still needs to be observed further.

Meanwhile, Longever’s products and services have frequently received consumer complaints 【Download Black Cat Complaint Client】. On the Black Cat Complaint platform, searching with the keyword “Longever” yields more than 2,500 related complaints. The issues mainly center on difficult after-sales price protection, mattress sagging, mattress bulging, and strong unpleasant odors.

On social media, some consumers said, “I spent nearly 5,000 yuan buying a Longever mattress at offline stores, and within less than two years, problems like latex aging, powdering, and yellowing appeared, but the after-sales response was slow and they did not solve it.”

The 《BUG》 column, acting as a consumer, consulted Longever’s official customer service. The representative said, “We will first arrange a technician to come on-site to check and verify it, and then we will provide feedback on the verification result. After that, our after-sales service will give a handling and solution plan.” But when asked what the specific solutions include, the customer service replied, “For example, factory return for repair or replacement—mainly depending on the situation. But throughout the whole process, each situation is different, and the time may indeed also be relatively long.”

Industry insiders in the home furnishing sector point out that Longever’s deeply rooted family enterprise governance model has become the underlying cause of the failure of the internal control system.

To this day, Longever is facing a dual test: both internal control loopholes and a crisis of brand trust.

Zhou Ting, dean of the YaoKe Research Institute, said, “At present, Longever must first resolve the core crisis. On the one hand, it must immediately conduct a comprehensive review and remediation of the internal control systems of the company and all subsidiaries, rebuild the financial and funds management processes, strengthen internal audit and supervision, and prevent such risks from happening again. On the other hand, it must completely shift its operating mindset—abandon the model of heavy marketing and light R&D, and heavy scale with light profits. It should focus on improving product quality upgrades and optimizing after-sales service, face consumer complaints head-on, come up with effective rectification plans, and repair the brand’s reputation. Only by first strengthening the governance foundation and then enhancing the core competitiveness of its products and services can it truly escape the dilemma of ‘revenue up, profit not up’ and regain market and capital trust.”

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