Shaanxi Ruikeshenzhen Stock Exchange GEM IPO "terminated (withdrawn)" main customers include WuXi AppTec, Sinopec, etc.

On March 7, Shaanxi Ruiko New Materials Co., Ltd. (referred to as Shaanxi Ruiko) saw a change in the status of its IPO review on the Shenzhen Stock Exchange's ChiNext board to "termination (withdrawal)." This was due to Shaanxi Ruiko New Materials Co., Ltd. withdrawing its application for the issuance of public offering documents. In accordance with Article 62 of the Shenzhen Stock Exchange's Rules for the Review of Stock Issuance and Listing, the Shenzhen Stock Exchange decided to terminate the review of its initial public offering of shares and listing on the ChiNext board. According to the prospectus, Shaanxi Ruiko's main business is the research, production, sales, processing, and recycling of noble metal catalysts, providing customers with a series of services including consultation, selection, development, and recycling of noble metal catalysts. The company's products are widely used in fields such as fine chemicals (pharmaceuticals, LCD materials, pesticides, food and feed additives, specialty chemicals), basic chemicals, and environmental protection. The main application fields of noble metal catalysts in the pharmaceutical and pharmaceutical intermediate sectors, and the company's major customers include WuXi AppTec, Qilu Pharmaceutical, Zhejiang Jiuzhou Pharmaceutical, Zhendatianqing, Valiant Co., Ltd., Asymchem Laboratories, Sinopec, serving nearly 200 listed companies. Noble metal catalysts have a history of industrial production for over a hundred years, and the industry competition is relatively intense. In the international market, well-known noble metal catalyst production enterprises such as Johnson Matthey in the UK, BASF in Germany, Umicore in Belgium, Evonik in Germany, UOP in the United States, and Haldor Topsoe in Germany have certain advantages in terms of product categories and product technology. In China, with the continuous upgrading of domestic noble metal catalyst products, some domestic enterprises with strong technical capabilities and the ability to quickly adapt to the market have continuously gained advantages in competition, such as Kaili Catalyst & New Materials, Shaanxi Ruiko, Kaida Catalyst, Sino-Platinum Metals, and Hangzhou Konner. Since its establishment, Shaanxi Ruiko has focused on the research and production of noble metal catalysts. After twenty years of development, the company has hundreds of noble metal catalyst products with a deep product technology reserve, making it one of the main producers of noble metal catalysts in the domestic fine chemical industry, ranking among the top three in China. This time, Shaanxi Ruiko's raised funds are all centered around its main business. After deducting the issuance expenses, the funds will be invested in the following projects based on their importance: Financially, in 2020, 2021, 2022, and the first six months of 2023, the company's operating income was 939 million yuan, 1.186 billion yuan, 1.185 billion yuan, and 620 million yuan respectively. During the same period, the company achieved net profits of 77.0141 million yuan, 67.328 million yuan, 111.4867 million yuan, and 33.1905 million yuan respectively. In the risk factors mentioned in the prospectus, Shaanxi Ruiko stated that the company faces the risk of a decline in the price of noble metals in the market leading to inventory devaluation and decreased profits. As of June 30, 2023, the company's own inventory mainly consists of noble metal catalyst products in production backup and noble metal turnover materials for padding, with the costs of palladium, platinum, rhodium, and other precious metals accounting for over 95% of the inventory costs in each period. Shaanxi Ruiko mentioned that in recent years, due to changes in market supply and demand environment, the Russia-Ukraine conflict, changes in international monetary policies, and other factors, the prices of noble metals such as palladium and rhodium have fluctuated significantly. Over the past decade, the market price of the main noble metal used by the company, palladium, has fluctuated between 100-680 yuan per gram. In the first half of 2023, the palladium market price continued to fluctuate and trend downwards, with a decrease of approximately 30% from early 2023 to the end of June 2023. This led to a significant decrease in net profit year-on-year despite an increase in operating income for the first half of 2023. If the prices of noble metals continue to fall and the company fails to take effective measures to mitigate the risk of falling prices, it will have a significant adverse impact on the company's performance level.