"Bleached Chicken Feet" Scandal Emerges, Polyfluoro Subsidiary Implicated, Family Business Governance Shortcomings Draw Attention

A report about “Internet celebrity chicken feet” exposed on CCTV’s March 15th Consumer Rights Day Gala has put Henan Yifeng Electronic New Materials Co., Ltd. in the spotlight. The report pointed out that some companies use hydrogen peroxide to bleach chicken feet, and long-term consumption may damage oral mucosa and liver and kidney functions, even endangering lives. Yifeng Electronics, as a hydrogen peroxide supplier, was accused of having links with the involved food companies, and its parent publicly traded company, Duofuduo (002407.SH), has also fallen into public scrutiny.

On March 16th, Duofuduo urgently issued a statement clarifying that its controlling subsidiary, Yifeng Electronics, is a hydrogen peroxide seller but has not established business cooperation or brand licensing with the involved food companies Shufu Xiang and Zengqiao Food. The announcement emphasized that Yifeng Electronics’ production and sales activities are unrelated to the company and its controlling subsidiaries. However, crisis PR expert Zhan Junhao pointed out that although the announcement attempts to distance itself from responsibility, the fact that the subsidiary illegally sold hazardous chemicals reveals serious loopholes in the group’s compliance and risk control, and the controlling shareholder needs to bear full management responsibility.

The Jianguo County Market Supervision Administration subsequently announced that a joint investigation team has been established to conduct a comprehensive review of Yifeng Electronics. The company has ceased production, and the investigation is ongoing. According to Duofuduo, Yifeng Electronics had revenue of 31.152 million yuan in 2025, with a net loss of 3.3872 million yuan, accounting for less than 1% of the company’s consolidated revenue. Its main business involves the production of hazardous chemicals, food additives, and disinfectants. Although the financial impact is limited, market reactions were swift; on the day of the announcement, Duofuduo’s stock price fell by 0.97%, reducing its market value to 36.368 billion yuan.

Duofuduo’s performance has fluctuated significantly in recent years. From 2020 to 2024, the company’s revenue increased from 4.245 billion yuan to 12.358 billion yuan, then fell back to 8.207 billion yuan. Its net profit attributable to shareholders surged from 49 million yuan to 1.948 billion yuan before dropping to a loss of 308 million yuan. In the first three quarters of 2025, the company reported revenue of 6.729 billion yuan, a year-on-year decrease of 2.75%, but net profit attributable to shareholders increased by 407.74% to 78.0546 million yuan. The performance fluctuations are mainly influenced by the price volatility of lithium hexafluorophosphate, which saw low prices in 2024 leading to decreased gross margins, and improved performance after prices rebounded in the second half of 2025.

Industry analyst Bai Wenxi believes that Duofuduo faces multiple challenges. First, the lithium hexafluorophosphate industry is highly cyclical, with significant price fluctuations causing strategic imbalances, such as expanding capacity during downturns, leading to substantial impairments. Second, the company’s corporate governance is outdated, with clear family business characteristics and frequent related-party transactions. The incident exposed weaknesses in subsidiary management. Third, the development of a second growth curve is slow; revenue still heavily depends on lithium hexafluorophosphate, and the gross margin of new energy materials has fallen to 12.6%. Accelerating the industrialization of high-value-added products is urgent.

The founder of Duofuduo is Li Shijiang, whose family holds shares in the listed company through Duofuduo Group. Li Shijiang’s son, Li Yunfeng, serves as general manager, and his eldest daughter, Li Lingyun, is vice chairman. In 2024, Li Lingyun’s annual salary reached 2.28 million yuan, higher than that of her father and brother. The 77-year-old Li Shijiang previously led the company to overcome technical barriers in lithium hexafluorophosphate, breaking foreign monopolies. However, this incident highlights his insufficient risk control during industry downturns. Bai Wenxi pointed out that Duofuduo needs to shift from “personal governance” to “systematic governance,” balancing individual innovation with organizational sustainability to navigate industry cycles.