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.