New Stock Preview | Eye-catching performance with gross profit margin of only 2%, Jianbang Metal Materials becomes the "silver porter"?

The third submission of the photovoltaic silver powder leader to the Hong Kong Stock Exchange aims to impact the Hong Kong stock market with a different structure. It was observed that on July 14th, Jinan Jianbang Metal Materials Co., Ltd. (hereinafter referred to as "Jianbang Metal Materials") submitted an application for listing on the main board of the Hong Kong Stock Exchange, with China Securities Co., Ltd. International as its exclusive sponsor. It is worth noting that Jianbang Metal Materials had previously submitted listing applications with the name "Jianbang High-Tech" on May 2, 2025, and November 6, 2025. This time, changing the entity to "Jinan Jianbang Metal Materials Co., Ltd." is not simply a name change, but a fundamental switch in the listing pathfrom a red-chip structure to a direct H-share issuance. This adjustment directly addresses the pain points from the previous two unsuccessful attempts. Previously, due to issues such as the transfer of equity by the company's controlling shareholder Chen Jian to his son Chen Zichun at zero cost in 2022, and the existence of overdue bills and credit record issues among companies under the Jianbang Group, the company faced review obstacles during the CSRC filing process. By dismantling the red-chip structure and opting for H-shares, the aim is to bypass the historical burdens created by the red-chip structures like the 37th notice registration and ODI filings, shifting the regulatory focus from the complexities of "offshore structure compliance" back to the "clarity of domestic company equity ownership", thereby increasing the likelihood of successful listing approval. However, while the change in structure may increase the likelihood of approval, it does not erase the fundamental wrinkles in the company's operations. The potential risks and challenges faced in the company's business development are still unavoidable hurdles. Even if Jianbang Metal Materials successfully lands on the Hong Kong stock market, its valuation pricing may be constrained by the fundamental ceiling. Exposing low profitability concerns amid high growth Established in 2010, Jianbang High-Tech is focused on the research, development, production, and sales of silver powder, a key raw material for manufacturing photovoltaic silver paste. With over a decade of operational experience, the company holds a significant position among domestic photovoltaic silver powder manufacturers, with its product line covering high-end silver powders required for advanced photovoltaic cell technology. According to Frost & Sullivan data, based on Chinese photovoltaic silver powder sales revenue, Jianbang Metal Materials has consistently ranked among the top three domestic producers since 2023; based on the sales revenue of silver powder for BC batteries in 2025, Jianbang Metal Materials ranked first among all photovoltaic silver powder producers. While leading in market size, Jianbang Metal Materials has achieved robust growth. The prospectus indicates that from 2023 to 2025, Jianbang Metal Materials' revenue was 2.782 billion, 3.95 billion, and 5.067 billion yuan respectively, with a compound annual growth rate of 34.91%; during the same period, its adjusted net profit was 61.928 million, 86.784 million, and 183 million yuan, with a compound annual growth rate of 71.9%, significantly higher than the revenue growth rate. In the first five months of 2026, Jianbang Metal Materials' revenue was 4.05 billion yuan, a year-on-year increase of 187.43%, with adjusted net profit of 58.102 million yuan, a year-on-year increase of 139.42%. Clearly, Jianbang Metal Materials' latest performance growth has accelerated. This growth is driven by several factors. Firstly, the booming photovoltaic sector and the domestic substitution window have coincided. Silver powder is a core raw material for photovoltaic silver paste (accounting for approximately 75% of the paste cost), known as the "chip" of the photovoltaic industry chain, which was long monopolized by Japan's DOWA. Jianbang Metal Materials achieved domestication in 2020, aligning with the domestic surge in photovoltaic installations and supply chain security demands. Secondly, as a technological pioneer, Jianbang Metal Materials covers all mainstream battery routes such as PERC / TOPCon / HJT / BC, being the first domestic manufacturer to master TOPCon's LECO technology silver powder. This has allowed the company to seize industrial opportunities. Thirdly, Jianbang Metal Materials has successfully entered the supply chains of leading domestic photovoltaic silver paste manufacturers, with its Jinan plant designed with an annual capacity of 1,485 tons, the largest in the country, laying a foundation for the company's sustained revenue growth. Based on these factors, Jianbang Metal Materials' continuous revenue growth is mainly driven by a combination of increased volume and price. In terms of volume, the sales volume of silver powder in 2023 to 2025 was approximately 52.98 tons, 59.41 tons, and 57.03 tons respectively, only fluctuating in 2025, with a sales volume of 21.12 tons in the first five months of 2026, a year-on-year increase of 13.24%. In terms of price, the rise in silver prices has driven an increase in the company's product prices. According to Frost & Sullivan data, the average price of silver increased by 30.6% from 4.9 thousand yuan in 2023 to 6.4 thousand yuan in 2024, and further increased by 34.4% to 8.6 thousand yuan in 2025. The price increased by 152.1% to 17.9 thousand yuan in the first five months of 2026. While the combined effect of volume and price has driven the company's revenue growth, effective cost control has accelerated profit growth. The three expenses of Jianbang Metal Materials accounted for 1.19%, 1.06%, and 1.05% of total revenue in 2023 to 2025, continuously decreasing. In the first five months of 2026, this indicator was 0.61%, almost half of the same period in 2025, indicating significant operating leverage and emerging economies of scale. However, beneath the continued growth lies potential challenges, including low profitability. According to the prospectus, Jianbang Metal Materials' gross profit margin was 3.9%, 3.3%, and 4.7% from 2023 to 2025, decreasing from 2.8% to 2.0% in the first five months of 2026. This low gross profit margin is due to the company's business model of "thin profit margin in silver processing", earning from "silver price + meager processing fees", resulting in raw material costs accounting for over 99% of total sales costs. In this model, the rise in silver prices significantly boosts revenue growth, but a decline in silver prices could exert pressure on revenue. Moreover, despite a continuous rise in silver prices, there have been instances of a decrease in gross profit margins, such as in 2024 and the first five months of 2026, primarily due to intensified price competition in the industry compressing already thin processing fees. This implies that Jianbang Metal Materials' business model has relatively poor resilience to fluctuations. Concentration of risks in suppliers and customers, long-term challenges in de-silverization trend In fact, low gross profit margins are just one risk aspect of Jianbang Metal Materials; challenges on the business side are equally prominent, especially the concentration risks in clients and suppliers. According to the prospectus, from 2023 to 2025, revenue from the top five clients of Jianbang Metal Materials accounted for 94.8%, 84.4%, and 71.1% respectively, with revenue from the largest client accounting for 45.1%, 36.7%, and 21.4%. While client concentration has decreased, it remains relatively high, exposing deep risks of dependence on major clients and weakening bargaining power, leading to risks of delayed product price transmission downstream. On the supplier side, the concentration is even more extreme. From 2023 to the first five months of 2026, purchases from the top five raw material suppliers accounted for 97.7%, 98.3%, 98.3%, 99.8%; with the share of the largest supplier increasing from 51.1% in 2023 to 68.7% in 2025, and 75.1% in the first five months of 2026. While the company explains that this is due to the concentrated nature of the silver nitrate industry, the increasing dependence on a single supplier amplifies supply chain vulnerability. Caught between upstream supplier reliance and downstream client dependence, Jianbang Metal Materials faces the risk of being cornered by suppliers during silver price fluctuations and facing performance challenges when large clients reduce orders or churn. This once again underscores the nature of Jianbang Metal Materials' business as a "thin profit transporter" caught between silver and silver paste, being disadvantaged at both ends without adequate bargaining power. The trend towards de-silverization is a looming threat over Jianbang Metal Materials. Silver paste is the largest non-silicon cost for photovoltaic cells, and the downward cost trajectory of "less silver no silver" is progressing through PERC TOPCon HJT silver-coated copper copper electroplating routes. While Jianbang Metal Materials has benefitted from the silver consumption dividend brought by the transition to TOPCon in the past three years, this dividend is now being eroded by silver-coated copper and copper electroplating. Although BC has a high single-wafer silver consumption, its limited installed capacity may not sustain a large-scale operation. Market share warnings have already appeared. In 2022 and 2023, Jianbang Metal Materials ranked first among domestic manufacturers with market shares exceeding 10%, but in 2024, the market share dropped to 9.8%, further declining to 9.3% in 2025. Companies like Suzhou Simate and Hubei Yinko New Materials have surpassed Jianbang Metal Materials, while Japan's DOWA retains 92% market dominance in high-end spherical silver powders under 5m through a patent pool. In the wave of de-silverization, Jianbang Metal Materials' nano silver powder has been validated for high copper slurry, providing a buffer for performance between 2026 and 2028. However, the real worry lies in technological divergence. The industry's primary focus on cost reduction is through silver-coated copper powder, an area where Jianbang Metal Materials is still in the research phase. In contrast, players like Agus have already landed large-scale de-silverized production, with leading companies like Deko and Juhu establishing early advantages in the silver-coated copper field. Jianbang Metal Materials has yet to produce mature silver-coated copper products, indicating a significant lag behind the industry's top tier in the N-type cell "low-silver" arena. This may be directly related to the company's continued low investment in research and development. Since 2023, Jianbang Metal Materials' research and development expenditure has been less than 1% of total revenue, creating uncertainty about whether such low-intensity investments can support Jianbang Metal Materials' transition into the competitive race. The risk of the company's growth curve not catching up with the pace of technological erosion remains objectively present. Therefore, even if Jianbang Metal Materials successfully lands on the Hong Kong stock market after the structural change, it still faces multiple challenges such as low gross profit margin, concentration of suppliers and clients, the impact of the de-silverization trend, and inadequate product maturity in silver-coated copper. Against this backdrop, despite Jianbang Metal Materials achieving impressive performance driven by silver prices and product sales since 2023, the company's weak fundamental safety net may significantly constrain its valuation levels, making it difficult to achieve pricing in the market that aligns with its narrative as the "leader in photovoltaic silver powder".