A-share subscription | Yongjie New Materials (603271.SH) opens for subscription. The products mainly include aluminum plates and aluminum foils.

On February 28, Yongjie New Materials (603271.SH) began its subscription with an issue price of 20.6 yuan per share and a subscription ceiling of 15,500 shares. The price-to-earnings ratio is 17.03, industry price-to-earnings ratio is 17.72, and it belongs to the main board of the Shanghai Stock Exchange, with Dongxing as the sponsor (main underwriter). The prospectus shows that Yongjie New Materials is specialized in the research, production, and sales of aluminum sheets and foils. Its products mainly include aluminum sheets and aluminum foils. Aluminum sheets and foils are basic materials for further processing in many downstream industries. The company's products are mainly used in downstream products or areas such as lithium batteries, lightweight vehicles, new building materials, and electronic appliances. From 2021 to 2023, the company's production volume as a percentage of the industry's total production volume is 1.76%, 1.68%, and 1.72% respectively. With the continuous increase in sales volume and market penetration rate of new energy vehicles in recent years, the company's business in the lithium battery sector has grown rapidly. The "aluminum alloy sheets for lithium ion battery structure parts" produced by the company has been recognized by the Ministry of Industry and Information Technology as a "manufacturing industry single champion product". According to the certification issued by China Nonferrous Metals Industry Association, from 2021 to 2023, the company is the first domestically in terms of market share of "aluminum alloy sheets for lithium ion battery structure parts". The funds raised this time are planned to be used for the following projects: Financially, in the fiscal year 2021, 2022, 2023, and January to June 2024, Yongjie New Materials achieved operating income of approximately 6.303 billion yuan, 7.150 billion yuan, 6.504 billion yuan, and 3.732 billion yuan, respectively. During the same period, the net profit was approximately 239 million yuan, 354 million yuan, 238 million yuan, and 164 million yuan respectively. In the prospectus, Yongjie New Materials mentioned that the company faces risks of fluctuating raw material prices. The main raw materials of the company are aluminum ingots, flat ingots, cast and rolled coils, and aluminum foil blanks. During the reporting period, the direct materials accounted for a high proportion of the cost, and fluctuations in the prices of main raw materials have a certain impact on the gross profit margin and profit level. According to the sensitivity analysis based on the financial data for 2023, a 5%, 10%, and 20% increase in the aluminum ingot market price will lead to a decrease of 0.25%, 0.49%, and 0.91% in the gross profit margin, and an increase of 2.52%, 4.62%, and 9.66% in the total profit of the company. Fluctuations in aluminum prices will affect the company's revenue and costs in the same direction, with a relatively small impact on the company's profitability after offsetting. However, due to factors such as differences in raw material procurement, finished product sales timing, and aluminum ingot pricing methods, on one hand, if raw material prices continue to rise significantly in the future, the company may face the risk of a decline in product gross profit margin. On the other hand, if raw material prices continue to fall significantly, the company will not only face a decrease in total profit, but also an increase in the risk of inventory markdown losses, thereby affecting the company's profit level.