Stock Abbreviation: Jinsanjiang
Stock Code: 301059
Jinsanjiang (Zhaoqing) Silicon Material Company Limited (23 Yingbin Avenue, Zhaoqing High-tech Zone) is issuing a prospectus for the convertible bonds to unspecified investors (Draft for Meeting).
Sponsor (Lead Underwriter)
Guangdong Province, Shenzhen City, Futian District, Central Third Road 8, Excellence Times Square (Phase II), North Building 2026, February
Statement
The China Securities Regulatory Commission and the exchange's decisions or opinions regarding this issuance do not guarantee the authenticity, accuracy, or completeness of the application documents and disclosed information, nor do they provide substantial judgments or guarantees regarding the issuer's profitability, investment value, or investor returns. Any contrary statements are false representations. According to the Securities Law, after securities are legally issued, the issuer is responsible for changes in operations and earnings. Investors should independently assess the issuer's investment value and make their own investment decisions, bearing the investment risks arising from changes in operations, earnings, or securities prices after the legal issuance of securities.
Major Matters Reminder
The company particularly reminds investors to pay full attention to the following major matters and carefully read the relevant sections on risk factors in this prospectus.
1. Special Risk Reminders
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Risk of Failure to Achieve Expected Economic Benefits from Fundraising Projects The company's construction project for a production base in Malaysia, upon completion and reaching production capacity, will yield an annual production capacity of 50,000 tons of silica for toothpaste. According to the feasibility study report, the project is expected to achieve an average annual revenue of RMB 503.5414 million with a gross profit margin of 28.75% and an after-tax internal rate of return of 17.32%. Previous fundraising projects did not meet expectations primarily due to lower-than-expected gross profit margins. If future competition in the toothpaste industry intensifies, leading to a decrease in sales prices or significant changes in customer demand, it may affect market pricing and sales scale of the project products. Since 2022, the price of sodium silicate, a major raw material, has been declining; if prices rise significantly in the future, it will adversely impact the project's gross profit margin and expected returns. Additionally, if the company fails to make expected progress in R&D and process upgrades related to silica, it may lack competitive product performance, affecting customer expansion and revenue growth. These factors may lead to the fundraising project failing to achieve expected economic benefits.
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Risk of Increased Depreciation and Amortization from Fundraising Projects The fundraising project involves significant capital expenditures. Once the project stabilizes, the annual depreciation and amortization will amount to RMB 21.1365 million, accounting for 2.38% of the expected total revenue and 14.44% of the expected total net profit. The project has a certain construction cycle, and if adverse market changes or poor management occur, leading to lower-than-expected product prices or gross profit margins, the company may face risks of declining operational performance due to increased depreciation and amortization.
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High Customer Concentration Risk During the reporting period, sales to the top five customers amounted to RMB 198.2806 million, RMB 198.5680 million, RMB 277.1263 million, and RMB 222.0359 million, accounting for 70.94%, 67.45%, 71.88%, and 68.86% of total revenue, respectively. The company's main product, silica for toothpaste, is primarily supplied to the toothpaste industry. According to Research Head Enterprises Research Center, the top five global toothpaste manufacturers, including Colgate Palmolive, P&G, and Unilever, hold approximately 67.94% of the market share, while the top ten hold about 80.35%. The high concentration in the toothpaste market leads to high customer concentration for the company. If major customers' demand changes or they shift to other suppliers, it could adversely affect the company's operations. Failure to develop new customers as expected will also negatively impact the company.