A-share subscription | Zhongguo Ruilin (603257.SH) starts subscription for company clients such as Aluminum Corporation of China, Zijin Mining Group.

On March 26, China RuiLin (603257.SH) started its subscription with an issue price of 20.52 yuan per share, a subscription cap of 9,500 shares, a P/E ratio of 18.17 times, listed on the Shanghai Stock Exchange, with Changjiang as its sponsor. The prospectus disclosed that China RuiLin is a professional engineering and technology company, mainly providing engineering and technical services including design consulting, engineering general contracting, equipment integration for domestic and foreign non-ferrous metal mining, beneficiation, smelting, processing industry chain customers, and its business also extends to environmental protection, municipal and other fields. Domestic customers include CHINFMINING, China Energy Investment, China Copper, China Baowu, Aluminum Corporation Of China, China Railway Resources, China Northern Industries, Jiangxi Copper, Tongling Nonferrous Metals Group, Baiyin Nonferrous Group, Zijin Mining Group, Jinchuan Group, and other central enterprises, state-owned enterprises, and large enterprise groups, while foreign customers include Glencore, BHP, Rio Tinto, Ivanhoe Mines, Codelco, and other large international mining groups. In terms of finance, in the financial years 2019, 2020, and 2021, the company achieved operating income of approximately 1.497 billion yuan, 1.664 billion yuan, and 2.005 billion yuan, respectively. The net profits were approximately 179 million yuan, 147 million yuan, and 157 million yuan, respectively. It is worth noting that the prospectus specifically reminds investors to pay attention to the risk of decreasing gross profit margin. During the reporting period, the company's overall gross profit margin of the main business was 27.53%, 25.05%, 20.62%, and 16.17%, showing a downward trend, mainly due to the proportion of engineering general contracting income with relatively lower gross profit margin in the company's main business income showing a continuous upward trend, and the slight decrease in gross profit margin of engineering design consulting business, which is the company's core business and main source of profit. During the reporting period, the gross profit margin of the company's engineering general contracting business was 8.80%, 8.18%, 7.45%, and 5.42%, respectively, accounting for 31.53%, 36.15%, 51.35%, and 64.92% of the main business income; during the reporting period, the gross profit margin of the company's engineering design and consulting business was 41.04%, 38.16%, 37.24%, and 38.51%, respectively, accounting for 48.23%, 44.59%, 36.90%, and 27.70% of the main business income. The company faces the risk of further lowering its comprehensive gross profit margin due to the increasing scale and proportion of engineering general contracting income with relatively lower gross profit margin, and the further decrease in the level of gross profit margin of the engineering design consulting business, which could adversely affect the company's operating performance.