On February 5, 2024, Guangdong Youju Advanced New Materials Co., LTD. (hereinafter referred to as "Youju New Materials") responded to the third round of inquiries of the Shenzhen Stock Exchange and updated its prospectus, giving a more detailed description of its operating performance and major customers.

Prospectus shows that Youju New Materials was founded in 2012, the company's main business is mainly for the special engineering plastic polyaryl ethersulfone and upstream key raw materials R & D, production and sales, sponsored by Haitong Securities, plans to raise 650 million yuan on the GEM, of which 450 million yuan is used for an annual output of 16,000 tons of special engineering plastic composite modification project. 200 million yuan is used to supplement working capital.

Financial report data show that from 2020 to June 2023, Youju New Material achieved operating income of 245 million yuan, 333 million yuan, 411 million yuan, 168 million yuan, and realized net profit of 20 million yuan, 58 million yuan, 92 million yuan, and 35 million yuan. After entering 2023, the company's performance showed a significant decline:

From January to June 2023, the main business income decreased by 9.6081 million yuan compared with the same period in 2022, down 5.45%; From January to September 2023, the reviewed operating income decreased by 14.79% year-on-year, and the net profit decreased by 27.00%;
From January to June 2023, bisphenol S product revenue decreased by 64.98% compared with the same period in 2022, gross profit margin decreased from 48.51% in 2022 to 31.13%, capacity utilization decreased from 93% in 2022 to 60.67%;
From January to June 2023, the sales volume in the field of HVAC building materials decreased by 45.01% compared with the same period in 2022;
From January to June 2023, the net cash flow generated from operating activities was 9,382,900 yuan, lower than the net profit and lower than the same period in 2022;
At the end of June 2023, both the current ratio and the quick ratio decreased significantly compared with that at the end of 2022; The net cash flow generated from operating activities in January-September 2023 decreased by 82.90% compared with the same period last year.

Youjuxin said in the reply letter that during the reporting period, bisphenol S products showed a substantial increase and then a sharp decline mainly due to the impact of weak demand in the downstream thermal paper industry in 2023 and intensified market competition. At present, the order situation of bisphenol S products in hand is good, and the risk of further decline in sales revenue of bisphenol S in 2024 is small; The decrease in the amount of cash flow generated by operating activities in 2023 is mainly caused by the joint effect of the decline in net profit, the increase of operational receivables and the reduction of business payable projects. Although the progress of sales collection has declined slightly, it still maintains a high level overall; At the end of 2023, the asset-liability ratio increased, and the current ratio and quick ratio decreased mainly due to the company's continuous promotion of fundraising projects and the construction of Hubei special engineering plastics base through its own funds and bank loans in 2023. The company has sufficient credit line and still has strong solvency.

Prospectus shows that Hanyu Group, the second largest shareholder of the company, is also an important customer of the company. During the reporting period, Youji New Materials sold modified PA, modified PP and other products to Hanyu Group, respectively, RMB 7.308,100, RMB 9.292,300, RMB 4.370,400 and RMB 2.070,200. Related to it, in March 2016, Hanyu Group invested in Youju New Material with 5.25 yuan/registered capital, in January 2017, Jiangjin Investment invested in Youju New material with 26.6 yuan/registered capital, and the net profit of Youju New Material in 2015 and 2016 was 897,400 yuan (unaudited) and 686,600 yuan (unaudited), respectively. The profit level in 2015 was higher than that in 2016, while the investment price of Hanyu Group in 2016 was significantly lower than that of Jiangjin Investment in 2017, which required the Shenzhen Stock Exchange to further demonstrate the fairness of the investment price of Hanyu Group, and whether Hanyu Group provided the issuer with customers, suppliers, technology, personnel, plants or other types of resources after the investment. Whether there are other interest arrangements and whether they constitute share payment.

In this respect, Youju new material replied that the pre-investment price-earnings ratio corresponding to Hanyu Group's 2016 investment price is 58.50 times, and the investment price is fair; Jiangjin Investment in 2017 investment price is based on the company's production capacity is expected to increase significantly, PSU and PES will achieve industrialization, key technology breakthroughs and other factors determined by consultation with the company; The investment price of Hanyu Group is lower than that of Jiangjin Investment is reasonable. At the same time, since Hanyu Group bought shares in March 2016 to 2018, the company has not sold the company and has no business dealings with Hanyu Group. In 2019, the company expanded its general engineering plastics business and began to sell modified PA, modified PP and other general engineering plastics to Hanyu Group, and the price of related transactions was fair.

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