GMT EIGHT - IPOs

New Stock Analysis | Major Customers Help Turn Losses into Profits as Zhengli New Energy Seeks to Increase Production Capacity and Compete in the Electric Vehicle Battery Market

On the evening of March 25, HKEX revealed that Jiangsu Zhengli New Energy Battery Technology Co., Ltd. (hereinafter referred to as "Zhengli New Energy") had a listing hearing on the Hong Kong Stock Exchange, with CICC and CMB International as the joint sponsors. It is worth noting that in the financial data up to the end of August 2024 before the listing hearing, Zhengli New Energy was still in a loss-making state. However, in the prospectus after the listing hearing, as of the end of 2024, Zhengli New Energy had already turned losses into profits. Turning Losses into Profits with Major Customers According to the prospectus, Zhengli New Energy was established in 2019, with Cao Fang and Chen Jicheng as the core founders and controlling shareholders of the company. It is noteworthy that both Cao Fang and Chen Jicheng had previously worked at Fuyao Glass Industry Group. Cao Fang is the sister of Fuyao Glass Industry Group founder Cao Dewang, and had served as the sales manager, director, and vice general manager of Fuyao Glass Industry Group; she currently serves as the chairman and executive director of Zhengli New Energy. Chen Jicheng had held various positions at Fuyao Glass Industry Group, including serving as the executive director and vice general manager of Fuyao Glass Industry Group; he currently serves as the executive director and general manager of Zhengli New Energy. In the shareholder structure of Zhengli New Energy, there is a diverse capital presence. Three Yi Development Co., Ltd. wholly owned by Cao Dewang, holds approximately 2.52% of the shares of Zhengli New Energy through its subsidiaries. In addition, many state-owned enterprises have also entered the scene, such as investment platforms under the Fujian Provincial Government-owned financial institution Huafu Securities and platforms under the Changshu Municipal Finance Bureau. Data shows that as of the end of August 2024, Zhengli New Energy recorded a net loss of 100 million RMB. In 2021, 2022, and 2023, Zhengli New Energy experienced losses of 402 million RMB, 1.72 billion RMB, and 590 million RMB respectively, totaling 2.712 billion RMB in losses over the three years. According to the prospectus, the significant increase in losses for Zhengli New Energy in 2022 was due to the impact of the Weying Automobile event. In November 2022, Zhengli New Energy stopped delivering ternary lithium batteries for BEVs (pure electric vehicles) to Weying Automobile. The Weying Automobile event caused the sales volume of ternary lithium batteries from Zhengli New Energy to decrease from 2.9GWh in 2022 to 1.5GWh in 2023, and the sales revenue of ternary lithium batteries to decrease from 2.629 billion RMB in 2022 to 1.448 billion RMB in 2023. Clearly, the Weying Automobile event was a huge loss for Zhengli New Energy financially and operationally. However, with the industry experiencing low raw material prices and adjustments in business strategies, Zhengli New Energy was able to turn losses into profits in the last four months of 2024, achieving a net profit of 91.014 million RMB in 2024. The prospectus shows that raw material costs accounted for 77.7%, 71.7%, 73.8%, and 74.6% of total sales costs in 2021, 2022, 2023, and 2024 respectively, and 76.1%, 78.0%, 70.1%, and 63.7% of total revenue in the respective years. Meanwhile, Zhengli New Energy adjusted its business strategy to focus on major customers. Data shows that from 2021 to 2024, the sales revenue from the top five customers of Zhengli New Energy were 1.337 billion RMB, 2.973 billion RMB, 3.238 billion RMB, and 4.530 billion RMB respectively, accounting for 89.1%, 90.4%, 77.8%, and 88.2% of total revenue in the respective years. Regarding the concentrated growth in revenue from the top five customers, Zhengli New Energy stated in the prospectus, "In 2024, we strategically focus on major OEM customers (due to production capacity constraints, we are cooperating on more models), and the revenue growth of three customers among the top five customers has increased the proportion of revenue contribution from the top five customers overall." It is worth noting that Zhengli New Energy's collaboration with leading companies in the automotive industry has formed a high-quality customer base. The company's battery products primarily serve electric vehicle manufacturers, including large central state-owned enterprises, emerging automotive companies, and multinational leading vehicle manufacturers. The supply share of battery products for core models from various leading global companies such as FAW Red Flag, GAC Trumpchi, LEAPMOTOR, SAIC-GM Wuling, and SAIC-GM continues to rise. It is important to note that LEAPMOTOR became a "dark horse" in the automotive market in 2024, achieving sales of over 290,000 vehicles for the year, ranking third among new energy companies behind Ideal and Horizon Robotics. In terms of monthly sales, LEAPMOTOR saw a surge in sales after the third quarter of 2024, breaking the 40,000 vehicle mark in November, and turning a net profit in the fourth quarter, becoming the second profitable new energy vehicle company. This aligns with the financial data of Zhengli New Energy. The dynamic battery market is expected to maintain rapid growth In the current market environment, the overall situation in the dynamic battery industry has brought new reflections and challenges to the company. On the one hand, customer dependence and accounts receivable risks threaten the company's financial health like the sword of Damocles hanging over its head; on the other hand, the rapid development of the industry also attracts the company to actively explore paths for breakthroughs and development. In this complex situation of opportunities and risks, Zhengli New Energy must not only address risks but also seize the opportunities in industry development to stand firm in the fierce market competition. According to a Frost & Sullivan report, the dynamic battery industry is characterized by opportunities and challenges. In terms of opportunities, the dynamic battery market has steadily grown in recent years, with global dynamic battery installations expected to increase from 716.0GWh in 2023 to 3,513.1GWh in 2028 at a compound annual growth rate of 37.5%, and China Shipbuilding Industry Group Power's battery installations are expected to increase from 389.0GWh in 2023 to 1,943.3GWh in 2028 at a compound annual growth rate of 37.9%. The rapid development of China Shipbuilding Industry Group Power's battery industry presents unique opportunities for industry participants."tu eres mi razn para sonrer" "you are my reason to smile"However, the industry also faces many challenges. Structural changes in market demand, such as the automotive industry's integrated optimal requirements for product safety, quality, performance, and cost, have driven structural changes in the new energy vehicle and battery industry, making the trend of multi-path development more prominent. Against the background of the subsidy decline for batteries and breakthroughs in lithium iron phosphate battery technology, there has been a switch in the dominant battery types in the market, leading to significant changes in the vehicle structure of the new energy vehicle market. In addition, battery manufacturers need to respond to the rapidly changing market environment, providing diversified product solutions, which pose new challenges to their flexibility and development capabilities. To meet the stable supply and demand of battery products in the early stages of industry development, many battery companies have invested heavily in building production lines. However, under current market demand, there are issues of poor compatibility, low efficiency, and high manufacturing costs. At the same time, automakers have raised higher requirements for standardized battery products that can be adapted to different types of vehicles and compatible with different electrochemical systems. Currently, Zhengli New Energy plans to build a capacity of 50.5GWh by the end of 2026 and further develop aviation battery products. According to the prospectus, Zhengli New Energy is the first company in the China Shipbuilding Industry Group Power battery industry to obtain the AS9100D aerospace quality management system certification. Their aviation battery products mainly consist of high-nickel semi-solid lithium-ion batteries, and they have already started supplying initial samples. The diversified project development provides the company with a broader growth space. In conclusion, with the big customer strategy, Zhengli New Energy has achieved a turnaround. However, relying on big customers also increases the instability of its operations. In addition, the industry competition and financial risks faced by the company also need to be carefully evaluated by investors.

01/04/2025

New stock news | Jiain International once again submits documents to Hong Kong Stock Exchange. Its Bukuta tungsten mine project is expected to begin commercial production in Q2.

According to the disclosure on March 31st by the Hong Kong Stock Exchange, Jiaxin G-RESOURCES Investment Limited (hereinafter referred to as Jiaxin International) has submitted an application for listing on the main board of the Hong Kong Stock Exchange, with CICC as its exclusive sponsor. Previously, the company had submitted documents to the Hong Kong Stock Exchange on August 19, 2024. The prospectus indicates that Jiaxin International is a tungsten mining company rooted in Kazakhstan, focusing on the development of the Bakuta tungsten mine. According to data from Frost & Sullivan, as of December 31, 2024, Bakuta is the world's largest open-pit tungsten mine in terms of tungsten trioxide (WO3) reserves. As of the same date, Bakuta Tungsten Mine is also the world's fourth-largest WO3 reserve tungsten mine (including both open-pit and underground tungsten mines), with the largest designed tungsten ore processing capacity in the world within a single tungsten mine. During the reporting period, Jiaxin International primarily focused on preparing for the commercial production of the Bakuta tungsten mine project. The project commenced trial production in November 2024 to test and fine-tune the processing flow. Commercial production is expected to begin in the second quarter of 2025, with a target annual mining and mineral processing capacity of 3.3 million tons of tungsten ore in 2025. The Bakuta tungsten mine is located in the Yenbekshikazakh district of Almaty region, Kazakhstan, and can be reached from Almaty and the Khorgos port linking Kazakhstan to China via the national highway. In addition, the railway connecting Khorgos to Almaty is located approximately 20 kilometers north of the Bakuta tungsten mine, and is expected to facilitate smooth transportation of products once the company begins commercial production. The Bakuta tungsten mine project also has readily available and affordable hydroelectric power supply. Financially, the Bakuta tungsten mine project was in the exploration and development stage throughout the reporting period, so the company did not report any revenue. In 2022, 2023, 2024, the company incurred losses of HK$94.45 million, HK$80.129 million, HK$64.969 million, and HK$177 million, respectively.

01/04/2025

New Stock News | Lens Technology (300433.SZ) submits documents to Hong Kong Stock Exchange to become the first batch of contract manufacturers for core components and complete machine assembly of Siasun Robot & Automation.

According to the disclosure by the Hong Kong Stock Exchange on March 31st, Lens Technology Co., Ltd. (hereinafter referred to as Lens Technology) (300433.SZ) has submitted an application to the Hong Kong Stock Exchange Main Board, with CITIC SEC as its exclusive sponsor. The prospectus shows that Lens Technology is a leading provider of precision manufacturing solutions for the entire industry chain of smart terminal. Based on the revenue in 2024, the company ranks at the forefront in the global consumer electronics precision structural parts and module comprehensive solutions industry, and in the global intelligent automobile interaction system comprehensive solutions industry. The company has accumulated deep technical capabilities in the field of consumer electronics and smart cars, and has a strong and comprehensive platform capability, including talent, technology, supply, and intelligent manufacturing. This enables the expansion into new business areas, seizing future growth opportunities, and helping the company become one of the first enterprises in the industry to undertake mass production and assembly of key core components of humanoid Siasun Robot & Automation and AI glasses/XR headsets. Since the 2000s, Lens Technology has led the industry with new materials, new technologies, new equipment, and new fields, pioneering the use of new materials such as glass, sapphire, and ceramics in the consumer electronics sector. For example, in 2007, the company pioneered the use of glass in the world's first full-screen touch smartphone, establishing the mainstream technological direction of smart terminal function panels. To this day, the company has vertically integrated the entire industry chain of smart terminals from raw materials and functional structural component production to functional module assembly and complete machine assembly, leveraging its expertise in materials such as glass, metal, sapphire, ceramics, plastic, leather, silicone, fiberglass, and carbon fiber. The company has established long-term strategic partnerships with leading global consumer electronics and smart car brands, usually deeply involved in the research and development and production of their products 2 to 3 years before they are launched. In addition, the company actively covers a wide range of application areas with great growth potential, extending horizontally into diverse scenarios such as smart retail terminals, industrial and humanoid Siasun Robot & Automation, AI glasses/XR headsets, forming a business layout with new market growth points. Lens Technology has nine production and research bases domestically and abroad, including overseas production bases in Southeast Asia, as well as offices and points of contact at home and abroad, achieving widespread coverage of domestic and foreign markets. By optimizing the supply chain and logistics costs for customers through a customer-centric layout, the company can rapidly respond to customer needs. In terms of finances, in 2022, 2023, and 2024, Lens Technology's revenues were approximately RMB 46.699 billion, RMB 54.491 billion, and RMB 69.897 billion respectively; during the same period, annual profits were approximately RMB 2.52 billion, RMB 3.042 billion, and RMB 3.677 billion respectively.

01/04/2025

New stock news | Unisound updates prospectus, medical + life AI dual engine powers up, commercialization process accelerates comprehensively.

On March 30, Unisound Intelligent Technology Co., Ltd. (hereinafter referred to as Unisound) updated its Hong Kong IPO prospectus, further advancing its listing process. As a pioneer in China's AGI technology, Unisound has made significant breakthroughs in the commercial application of artificial intelligence technology in recent years. Since the breakthrough of AI technology in 2017, Unisound has continuously upgraded its core AI capabilities relying on the Atlas intelligent computing platform (184 PFLOPS computing power). From the early UniCore model to the Shanhai model with 60 billion parameters, Unisound has achieved a leap in multimodal interaction and complex reasoning. Through the "technology-scene" dual-drive, Unisound has deeply integrated large models into vertical fields such as medical and daily life. It is worth noting that Unisound has not only completed the scale landing of technological solutions but also driven a significant growth in revenue and profitability. From 2022 to 2024, the company's revenue steadily increased from 601 million yuan to 939 million yuan, with a compound annual growth rate of 25%; during the same period, gross profit increased from 240 million yuan to 364 million yuan, with an average annual growth rate of 23.3%, demonstrating the company's solid commercial landing capabilities and healthy profitability level. According to data from Frost & Sullivan, in terms of revenue, Unisound is the fourth largest AI solutions provider in China in 2024, and the second-fastest growing among companies with annual revenue exceeding 500 million yuan. Also in the same year, based on revenue, the company ranks third in China in life AI solutions and fourth in medical AI services and solutions. In terms of medical AI, Unisound's AI medical solutions significantly improve medical efficiency and quality through medical record voice input, medical record quality control, single disease quality control, and medical insurance payment management. The company's system has increased medical record input speed by 4-6 times, reduced quality control time by 80%, and achieved close to expert-level intelligent review using natural language understanding and clinical knowledge graph. By 2024, the company has provided AI solutions to 166 medical customers, helping hospitals upgrade to intelligence and promote the process of medical reform. In terms of daily life AI, Unisound's AI living solutions cover various scenarios such as residential, commercial spaces, hotels, and transportation to help companies improve operational efficiency and service experience. A typical example is the Shenzhen Metro Line 20 voice ticketing system, which has reduced ticketing time from 15 seconds to 1.5 seconds, significantly relieving passenger flow pressure. From 2022 to 2024, the number of customers served by life solutions increased from 373 to 411, covering top insurance groups and metro systems, among other benchmark customers, continuously expanding service scope and deepening industry influence. Meanwhile, by providing AI large model capabilities through the MaaS model, Unisound's API call volume peak has exceeded 1 billion times per month, and AI chip sales volume has nearly doubled over three years. In the wave of industrialization of AI, the company, relying on a mature business model and deep scene accumulation, is rapidly growing into an industry leader. Looking ahead, Unisound will adhere to a balance of technological innovation and commercialization, continuously create value through full-chain layout, and lead the deep integration of AI technology with the real economy.

31/03/2025

New Stock News | Woodpecker Hong Kong IPO Prospectus Fails for the Second Time

The Woodpecker Repair International Limited (hereinafter referred to as "Woodpecker") Hong Kong IPO prospectus submitted on September 30, 2024 expired after 6 months on March 30, 2025, with CICC and Zhongtai International as its joint sponsors at the time of submission. This is the second time the company's IPO submission has expired, with the previous one submitted on January 29, 2024 also expiring on July 29, 2024. Woodpecker is the largest home repair platform. The Woodpecker platform provides convenient, transparent, and trustworthy services to tens of millions of Chinese families in over 300 cities, while also providing engineers with opportunities for sustainable income. According to the data from Burnt Consultants, based on the total transaction volume in 2023, Woodpecker holds a market share of up to 2.4% in China's online home repair industry. The prospectus shows that the total transaction volume of the Woodpecker platform increased from RMB 990 million in 2021 to RMB 1.46 billion in 2022, and further increased to RMB 2.48 billion in 2023, with a compound annual growth rate of 58.5% from 2021 to 2023. As of the six months ending June 30, 2024, the total transaction volume on the platform was RMB 1.57 billion.

31/03/2025

New Stock News | Ze Hui Biology Port's IPO prospectus for public offering is invalidated, dedicated to developing innovative cell therapy products for PSC.

ZeHui Biotechnology Co., Ltd. (ZeHui Biotech) submitted its Hong Kong IPO prospectus on September 30, 2024, which expired on March 30, 2025, six months after submission, with CICC as its exclusive sponsor at the time of submission. The prospectus disclosed that ZeHui Biotech is a biopharmaceutical company in the clinical research and development stage, dedicated to developing innovative cell therapy products derived from pluripotent stem cells ("PSC") to treat a variety of diseases. As one of the earliest companies in China and even globally to engage in the research and development of PSC-derived cell therapy products, according to Frost & Sullivan data, the company is one of the first in China to obtain approval for PSC-derived cell therapy new drug clinical trial applications ("IND") and the only company in China currently with multiple PSC-derived cell therapy assets in Phase II clinical trials. Currently, the company's product portfolio includes the core product ZH901, as well as main products ZH903, ZH902, and ZH906. As of the last feasible date, the core product ZH901 has entered Phase II clinical trials for the treatment of AE-ILD, aGVHD, meniscus injury, and ARDS. ZH903 and ZH902 are main products currently being studied in investigator-initiated trials ("IIT"), aiming to treat Parkinson's disease and dry AMD, respectively. The company's main product ZH906, used for treating corneal endothelial decompensation, is in the preclinical stage.

31/03/2025

New stock news | Hong Kong IPO prospectus of Xiangjiang Electric Appliance is invalid.

Hubei Xiangjiang Electrical Appliances Co., Ltd. (hereinafter referred to as Xiangjiang Electrical Appliances) submitted a listing application for listing on the Hong Kong stock exchange on September 29, 2024, which expired on March 29, 2025, 6 months after submission. Sinolink (Hong Kong) was the exclusive sponsor at the time of submission. The prospectus shows that Xiangjiang Electrical Appliances is a Chinese manufacturer of quality household products for quality living. It mainly operates in the ODM/OEM model and has established a customer base consisting of globally renowned and long-standing brands such as Walmart, Telebrands, SEB, Sensio, Hamilton Beach, and Philips. With its capabilities in design, development, and manufacturing of various small household appliances, the company has been particularly successful in the kitchen small appliance sector. The company has been consecutively ranked as one of the "Top Ten Kitchen Small Appliance Export Enterprises" by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products in 2022 and 2023. According to a Frost & Sullivan report, based on the export value in 2023, the company ranks among the top ten enterprises in the Chinese kitchen small appliance industry. Based on the export volume to the US and Canada in 2023, the company's electric kettles hold approximately 21.4% and 32.3% market share in the relevant categories defined by the Chinese Customs General Administration. Based on the export volume to the US in 2023, the company's electric mixers and other electric products hold approximately 6.7% market share in the relevant categories defined by the Chinese Customs General Administration.

31/03/2025

New stock news | JD Industrial submits application to Hong Kong Stock Exchange, becoming the largest service provider in China's industrial supply chain technology and service market.

According to the disclosure by the Hong Kong Stock Exchange on March 30th, JD Industrial Limited (referred to as JD Industrial) has submitted an application for listing to the Hong Kong Stock Exchange, with Bank of America Securities, Goldman Sachs, and Haitong International as joint sponsors. JD Industrial is a leading industrial supply chain technology and service provider in China. The company offers a wide range of industrial product supply and digital supply chain services through its full-chain intelligent industrial supply chain solution called "Taipu", to meet the diverse needs of customers. "Taipu" is built on the company's end-to-end supply chain digital infrastructure, covering commodities, procurement, fulfillment, and operations. According to the prospectus, after years of development, JD Industrial has become the largest participant in China's MRO procurement services market. According to data from Zhaoshi Consulting, based on transaction volume in 2024, the company ranks first, with a scale nearly three times that of the second place. According to the same data, as the company expands into a broader industrial supply chain market, based on transaction volume in 2024, the company is also the largest service provider in China's industrial supply chain technology and services market, with a market share of 4.1%. The continuous growth of the company's scale fully demonstrates the efficiency of its business model. From 2022 to 2024, the company's transaction volume increased from approximately RMB 22.3 billion to RMB 28.8 billion, with a compound annual growth rate of 13.5%. According to data from Zhaoshi Consulting, as of December 31, 2024, based on SKU count, the company provides the widest range of industrial product supply in China. As of December 31, 2024, the company has provided around 57.1 million SKUs covering 77 product categories. In 2024, the company's product supply comes from a wide and nationwide industrial product supply network consisting of approximately 121,700 manufacturers, distributors, and agents. In terms of finances, during the reference period, most of JD Industrial's revenue came from commodity sales revenue, with the rest coming from providing trading platforms, advertising, and technology and other services. In 2022, 2023, and 2024, JD Industrial's total revenue from continuing operations was approximately RMB 14.1 billion, RMB 17.3 billion, and RMB 20.4 billion respectively, with a compound annual growth rate of 20.1%. It is worth noting that in 2022, 2023, and 2024, the company recorded net losses of RMB 1.3 billion, net profit of RMB 4.8 million, and net profit of RMB 760 million respectively.

30/03/2025

New stock news | iFlytek submits an application to the Hong Kong Stock Exchange. The company is a provider of AI solutions and launched its own large language model, Shanhai Damo, in 23 years.

According to the disclosure by the Hong Kong Stock Exchange on March 30, Yunjiasheng Intelligent Technology Co., Ltd. (hereinafter referred to as "Yunjiasheng") has submitted an application for listing to the Hong Kong Stock Exchange, with CICC and HAITONG INT'L as its joint sponsors. The prospectus shows that Yunjiasheng is a leading artificial intelligence company with full independent intellectual property rights and mastery of the full-stack AGI technology. Yunjiasheng started building the Atlas artificial intelligence infrastructure in 2016. The release of deep learning models such as Transformer in 2017 and BERT in 2018 marked a breakthrough in AI natural language processing shortly afterwards. Leveraging the company's strong R&D expertise in interactive AI and market insights gained since its establishment, the company launched the first BERT-based large language model UniCore as the initial core algorithm model of its central technology platform Yunji Brain, providing a range of AI solutions to customers in various vertical industries. In 2023, Yunjiasheng launched a proprietary large language model called Shanhai Big Model with 600 billion parameters, as a new core algorithm model of the company's central technology platform Yunji Brain, continuously iterating on this model. Since its launch, the Shanhai Big Model has been continuously upgraded to enhance its language capabilities and multimodal reasoning abilities. With its multimodal capabilities, the Shanhai Big Model can handle and integrate information from different modes, making it better able to understand complex scenarios and improve human-machine interaction. With the enhancement of its reasoning abilities through iterations, the Shanhai Big Model's capabilities in handling complex information and tasks have significantly improved. Yunjiasheng provides highly competitive products and solutions for a wide range of applications in life AI and medical AI. According to data from Frost & Sullivan, based on revenue, Yunjiasheng is the fourth largest AI solution provider in China in 2024 among enterprises with annual revenues exceeding 500 million RMB, growing second fastest. In the same year, based on revenue, the company ranked third in China for life AI solutions and fourth for medical AI services and solutions. Financially, during the historical periods, Yunjiasheng's revenue mainly comes from the sale of AI products and solutions. In 2022, 2023, and 2024, Yunjiasheng's revenue was approximately 601 million RMB, 727 million RMB, and 939 million RMB respectively, with a compound annual growth rate of 25%. During the same period, the gross profit was approximately 240 million RMB, 295 million RMB, and 364 million RMB respectively, with a compound annual growth rate of 23.3%.

30/03/2025

New Stock News | Changhong New Materials submits application to Hong Kong Stock Exchange GEM, main business is graphene integrated heating products and electric heating grid cloth.

According to the disclosure on March 28 by the Hong Kong Stock Exchange, Changhong New Materials Group Limited (referred to as Changhong New Materials) has submitted an application for listing on the Hong Kong Stock Exchange's GEM, with Jianquan Finance Limited as its exclusive sponsor. The prospectus shows that Changhong New Materials is mainly engaged in the research, development, production, and sales of new heating materials and products in the northeast region of China. The company's product portfolio mainly includes two categories: graphene heating grid fabric and graphene integrated heating products, both aimed at providing consumers and industrial applications with efficient and balanced heating functions. Currently, Changhong New Materials has nurtured multiple brand combinations, each of which can meet specific market segments and consumer needs. The company's brands include: Huacheng, Fanchi, Meisikon, and Dielianqingfeng. In terms of sales channels, the company customizes its operations for two business segments: direct sales and distribution. Graphene heating grid fabric under the Huacheng brand is sold directly to factories and construction companies, while graphene integrated heating products under the Fanchi, Meisikon, and Dielianqingfeng brands are distributed through sales networks in the northeast region of China. Data shows that in the 2024 fiscal year, distribution contributed 81.4% to revenue, while direct sales accounted for 18.6%. Regarding customer concentration, in the 2023 and 2024 fiscal years, the sales to the top five customers accounted for approximately 53.0% and 53.8% of total revenue for each year, respectively. The sales to the single largest customer accounted for about 15.6% and 13.1% of total revenue for each year, respectively. In terms of supplier concentration, in the 2023 and 2024 fiscal years, the procurement from the top five suppliers accounted for approximately 84.6% and 87.6% of the total procurement for each year, respectively. The procurement from the single largest supplier accounted for about 56.1% and 42.8% of total procurement for each year, respectively. Financially, in 2023 and 2024, Changhong New Materials achieved revenues of 25.548 million and 97.882 million RMB respectively, with annual profits of 6.436 million and 17.11 million RMB respectively. Furthermore, the prospectus warns of risks that the company's business may face, including disruptions to operations and financial conditions due to reliance on key suppliers; concentration risks from heavy dependence on a few major customers that could significantly impact earnings and profitability; and potential adverse effects on the company's business, financial conditions, and operating performance if it fails to effectively compete with existing or potential competitors in a competitive and fragmented industry.

29/03/2025

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