Kofon shares announced the termination (withdrawal) of the GEM IPO, as one of the leading segmented silicone oil companies in China.

On December 8th, Zhejiang Kefeng Organosilicon Co., Ltd. (referred to as Kefeng Corporation) terminated its IPO on the Shenzhen Stock Exchange ChiNext Board. Due to the withdrawal of the issuance and listing application by Kefeng Corporation and the sponsor, in accordance with the "Shenzhen Stock Exchange Stock Issuance and Listing Review Rules (2024 Revision)" Article 62, the Shenzhen Stock Exchange decided to terminate the issuance and listing review. According to the prospectus, Kefeng Corporation is a high-tech enterprise specializing in the research, development, production, and sales of organic silicon products, with organic silicon application materials as its main business. It is a national-level specialized and new "little giant" enterprise. Its main products include segmented silicone oil, amino silicone oil, post-finishing aids, pre-treatment aids, dyeing and printing aids, nano-liquid dispersed dyes, hexamethyldisiloxane, etc. The company's product categories are complete, its business chain is intact, and it has become one of the leading segmented silicone oil companies in China. Four products developed by Kefeng Corporation, namely "Versatile Hydrophilic Amino Silicone Oil", "Cotton-specific Segmented Polyether Hydrophilic Amino Silicone Oil", "Dyeing and Sweat-absorbing Agent KF-1474", and "Cotton Fabric Special Hydrophilic Segmented Silicone Oil SSK-90", have been recognized by the Zhejiang Provincial Department of Economy and Information Technology (Zhejiang Provincial Economic and Information Committee) as reaching the leading level of technology in the country and are identified as provincial-level industrial new products (new technologies). The company has established good business cooperation with downstream professional large and medium-sized chemical enterprises such as Rudolf Chemical, Huntsman Textile, and Demavak. Its products and technologies have been recognized by customers, accumulating many high-quality customer resources. During the reporting period, the main raw materials purchased by Kefeng Corporation are DMC, isopropanol, and other chemical materials. The company's main suppliers during the reporting period include Zhejiang Zhongtian Dongfang Fluorosilicone Materials Co., Ltd., Luxi Chemical Group Silicon Chemical Branch, Hoshine Silicon Industry Co., Ltd., Shandong Jinling Chemical Co., Ltd., etc. With the development of technology and the transformation and upgrading of the economic structure, the deep processing and application of organic silicon, especially in high-tech product application areas, continues to expand. Emerging industries such as 5G communication, new energy, consumer electronics, etc., are showing a trend of vigorous development. The rapid popularization and upgrading of products and supporting infrastructure in the above-mentioned industries have greatly driven the growth of demand for organic silicon products in the upstream of the industrial chain. The company also seizes opportunities, continuously expands horizontally and vertically in the textile dyeing aids and organic silicon industry chain, actively cultivates new profit growth points, and its subsidiary Quzhou Kefeng's products can be widely used in the fields of electronics, medical care, new energy, etc., which are key development directions for strategic emerging industries. In 2022, Quzhou Kefeng's new products achieved operating income of 26.1584 million yuan. At the same time, the company is studying the technology of lithium battery additives borate ester (TMSB) and phosphate ester (TMSPA). Once the technology is mature and put into the market, it can effectively expand the company's profit growth space. In terms of finance, in 2020, 2021, and 2022, Kefeng Corporation's operating income was 314 million yuan, 519 million yuan, and 440 million yuan respectively, while the net profit of the company during the same period was approximately 37.2202 million yuan, 73.0955 million yuan, and 64.5185 million yuan respectively. According to Kefeng Corporation's prospectus, the company's main raw materials are DMC, isopropanol, and hydrogen-containing bifunctional heads. During the reporting period, the direct material costs accounted for a high proportion of the main operating costs, namely 91.77%, 94.40%, and 92.42% (excluding freight). The fluctuation of raw material prices is an important factor affecting the company's gross profit margin. In recent years, the unit prices of some raw materials purchased by the company have undergone significant fluctuations. If the prices of raw materials continue to rise rapidly in the short term or fluctuate frequently in the future, and the company cannot promptly take effective measures, it may affect the market competitiveness of the company's products and have a negative impact on the company's revenue growth and profit improvement.