Statement
The China Securities Regulatory Commission and the exchange do not guarantee the authenticity, accuracy, or completeness of the application documents and disclosed information regarding this issuance, nor do they make substantive 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 must independently assess the issuer's investment value and make their own investment decisions, bearing the investment risks arising from changes in operations and earnings or fluctuations in 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 risk factors in this prospectus.
Special Risk Reminders
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Risk of Failure to Achieve Expected Economic Benefits from Fundraising Projects The company's Malaysia production base construction project, upon completion and reaching production capacity, will form 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 503.54 million during the forecast period, with a gross profit margin of 28.75% and an after-tax internal rate of return of 17.32%. The previous fundraising projects did not meet expectations mainly due to lower-than-expected gross profit margins, with actual average procurement prices for key raw materials significantly higher than those during the IPO reporting period (2017-2019). The products from this fundraising project mainly target toothpaste manufacturers; if competition in the toothpaste industry intensifies, leading to a decline in selling prices or significant changes in customer demand structure, it may affect market pricing and sales scale. Since 2022, the price of sodium silicate, a key raw material, has been declining. If raw material prices rise significantly in the future, it will adversely affect the gross profit margin and expected returns of this fundraising project. Additionally, if the company fails to make expected progress in R&D and process upgrades related to silica, it may lead to insufficient product performance competitiveness, further impacting customer expansion and revenue growth. These factors may result in the fundraising investment project failing to achieve expected economic benefits.
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Risk of Increased Depreciation and Amortization from Fundraising Projects The investment scale of this fundraising project is large and mainly consists of capital expenditures. After entering the stable phase, the annual depreciation and amortization amount will be 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; if significant adverse changes occur in the market environment or due to poor project management, leading to the project not achieving expected benefits, the company faces the risk of declining operating performance due to increased depreciation and amortization expenses.
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High Customer Concentration Risk During the reporting period, the sales amounts to the top five customers were RMB 198.568 million, RMB 277.126 million, and RMB 307.785 million, accounting for 67.45%, 71.88%, and 68.67% of total revenue, respectively. The company's main product, silica for toothpaste, has a high customer concentration primarily in the toothpaste industry. According to Research Head Enterprises Research Center, major global manufacturers of oral care toothpaste and mouthwash include Colgate Palmolive, P&G, and Unilever, with the top five manufacturers holding approximately 67.94% of the market share in 2024. The high concentration in the toothpaste market leads to high customer concentration for the company. If major customers change their demand or reduce procurement from the company, or switch to other suppliers of silica for toothpaste, it will adversely affect the company's operations. If the company fails to develop new customers as expected, it will also negatively impact its operations.