Jiahong New Materials' Entrepreneurship Board IPO "terminated (withdrawn)" focusing on the research, production, and sales of electric heating products.

On December 1, Wuhu Jiahong New Materials Co., Ltd. (hereinafter referred to as Jiahong New Materials) terminated its IPO on the Shenzhen Stock Exchange ChiNext Board. Due to the withdrawal of the issuing and listing application by Wuhu Jiahong New Materials Co., Ltd. and the sponsor, the Shenzhen Stock Exchange decided to terminate its IPO review according to the "Shenzhen Stock Exchange Stock Issuance and Listing Review Rules (Revised in 2024)". The prospectus shows that Jiahong New Materials has been focusing on the research and development, production, and sales of electric tracing products, including self-controlling temperature tracing bands, constant power tracing bands, temperature controllers, accessories, and electric tracing system engineering. As a professional electric tracing ODM/OEM manufacturer and system solution provider, the company has developed high-quality electric tracing products for domestic and foreign customers, which can be widely used in industries such as oil and natural gas, chemical industry, electric power energy, marine ships, bio-medicine, as well as insulation, antifreeze, snow melting, heating, and other commercial and residential applications. The main raw materials of Jiahong New Materials include metal wires, chemical raw materials, and colorants. Important suppliers include AJX Chemical Technology (Shanghai) Co., Ltd., Zhejiang Dongyi New Materials Co., Ltd., Anhui Guangyu Electronic Materials Co., Ltd., and Tongling Jingda Special Electromagnetic Wire Co., Ltd. During the reporting period, the company's products were mainly exported, with major customers being regional electric tracing brand companies, mainly in the United States, Russia, Canada, and the United Kingdom. The proportion of domestic sales business during the reporting period showed a steady upward trend, with domestic customers mainly in the fields of petroleum and chemical industry, rail transportation, logistics, warehousing, marine engineering, vessels, and new energy industries. In the domestic market, the company has deeply explored the needs of large industrial customers, continuously improved its comprehensive service capabilities, and established stable cooperative relationships with well-known domestic industrial customers such as CNPC, CNOOC, Sinopec, gradually promoting the import substitution of high-end electric tracing products. According to the document from the Wire and Cable Branch of the China Electrical Equipment Industry Association, the company ranked in the top three in the domestic electric tracing market share from 2017 to 2019 among domestic enterprises. Financially, in 2020, 2021, and 2022, Jiahong New Materials achieved operating revenues of RMB 210 million, RMB 300 million, and RMB 355 million respectively. During the same period, the company's net profits were approximately RMB 41.27 million, RMB 52.61 million, and RMB 76.98 million respectively. As stated by Jiahong New Materials in the prospectus, the comprehensive gross profit margin during the reporting period was 49.40%, 43.41%, and 42.79% respectively (the gross profit margin for 2020, 2021, and 2022 was calculated after deducting transportation and miscellaneous expenses from operating costs), showing a decreasing trend. This was mainly influenced by factors such as market price fluctuations, exchange rate fluctuations, changes in raw material prices such as metal wires, and external environmental changes within the electric tracing industry. If there is an increase in downward pressure on the macroeconomic environment in the future, intensified industry competition leading to a decrease in the electric tracing market size and product sales prices, or an increase in costs due to rising raw material prices, or the expansion of the market resulting in the addition of a large number of low-price customers, it will have a negative impact on the company's comprehensive gross profit margin and therefore affect the company's performance.