A-share subscription | Yong Jie New Material starts subscription, with products mainly including two categories: aluminum plates and aluminum foils

According to Zhitong Finance APP, on February 28, Yong Jie New Material (603271.SH) opened for subscription, with an issuance price of 20.6 yuan per share, a subscription limit of 15,500 shares, a price-to-earnings ratio of 17.03 times, and an industry price-to-earnings ratio of 17.72. It belongs to the Shanghai Stock Exchange main board, with Dongxing Securities as the sponsor (lead underwriter). The prospectus shows that Yong Jie New Material specializes in the research and development, production, and sales of aluminum plates, strips, and foils, with products mainly including aluminum plates and aluminum foils. Aluminum plates and foils are basic materials for further processing in many downstream industries. The company's products are mainly applied in downstream products or fields such as lithium batteries, vehicle lightweighting, new building materials, and electronics. From 2021 to 2023, the company's production volume accounted for 1.76%, 1.68%, and 1.72% of the total industry output, respectively. With the continuous increase in sales volume and penetration rate of new energy vehicles in recent years, the company's business in the lithium battery field has grown rapidly. The "aluminum alloy plates and strips for lithium-ion power battery structural components" produced by the company have been recognized by the Ministry of Industry and Information Technology as a "single champion product in the manufacturing industry." According to the certification issued by the China Nonferrous Metals Industry Association, during the period from 2021 to 2023, the company ranked first in the domestic market share for "aluminum alloy plates and strips for lithium-ion power battery structural components." The funds raised this time are intended for the following projects: In terms of finance, for the fiscal years 2021, 2022, 2023, and the first half of 2024, Yong Jie New Material achieved operating revenues of approximately 6.303 billion yuan, 7.150 billion yuan, 6.504 billion yuan, and 3.732 billion yuan, respectively, with net profits of approximately 239 million yuan, 354 million yuan, 238 million yuan, and 164 million yuan during the same periods. Yong Jie New Material mentioned in the prospectus that the company faces the risk of raw material price fluctuations. The main raw materials for the company are aluminum ingots, flat ingots, cast-rolled coils, and aluminum foil blanks. During the reporting period, the proportion of direct materials in costs was relatively high, and fluctuations in the market prices of major raw materials have a certain impact on gross profit margins and profitability. According to a sensitivity analysis based on the 2023 financial data, if the market price of aluminum ingots rises by 5%, 10%, and 20%, the company's gross profit margin will decrease by 0.25%, 0.49%, and 0.91%, respectively, while the total profit of the company will increase by 2.52%, 4.62%, and 9.66%. Fluctuations in aluminum prices will similarly affect the company's revenue and costs, with a small net impact on profitability after offsetting. However, due to factors such as the timing difference in raw material procurement and finished product sales, as well as differences in aluminum ingot pricing methods, if raw material prices continue to rise significantly in the future, the company may face the risk of declining product gross profit margins On the other hand, if raw material prices continue to decline significantly, the company will not only face a reduction in total profits but may also face an increased risk of inventory write-down losses, thereby affecting the company's profitability