BGI Genomics has responded to the second round of inquiry letter from the Beijing Stock Exchange: A national-level specialized and innovative small giant, focusing on the research and sales of water-based functional materials

Hangzhou Huada Haitian Technology Co., Ltd. updated its listing application review status on the Beijing Stock Exchange on May 25. The company has responded to the second round of review inquiries, with the main issues addressed including historical capital contributions and equity transfer defects, the risk of performance decline, and the authenticity and verification of procurement. Regarding historical capital contributions and equity transfer defects, the company stated that the transfer price and other matters related to this equity transfer have been approved or confirmed by the competent authorities. Although there are procedural defects in this equity transfer, such as not being conducted publicly in a legally established property trading institution as stipulated by the "Interim Measures for the Administration of State-owned Property Transfer," and not undergoing auditing, these do not affect the validity of the transfer and the clarity of the issuer's equity, nor do they constitute substantial legal obstacles to this issuance. Relevant shareholders of the company have made up for the capital contribution defects and the corresponding interest for the unpaid period by the end of 2023, and the measures taken to remedy the capital contribution defects are effective and thorough. The interest rate is determined by referencing the market quotation rate for bank loans during the same period, and the interest accrual is fair. Regarding the risk of performance decline, the company indicated that during the reporting period, its market share in non-SPS paper-based new materials business was relatively high but slightly decreased. The company maintains a prominent position in the high basis weight sector, and the main customer base is generally stable, with no significant loss of customers. There is no decline in supply share among most major customers. The company's management team has rich experience in wood pulp procurement, which is beneficial for controlling procurement costs and creating profit margins for SPS products. Therefore, it is feasible for the gross profit margin of the company's SPS products to turn positive, and the related business has sustainability. Regarding the authenticity and verification of procurement, the company stated that during the reporting period, the overall market price of wood pulp was at a low range compared to recent years, and there is limited further downward space. Considering the characteristics of wood pulp products and the company's production and operational needs, it is reasonable for the company to maintain inventory at low market prices, which is in line with industry practices. The company also responded to other questions one by one. According to Changbi Finance, the company focuses on the research, development, and application of water-based functional materials and is recognized as a national-level specialized and innovative small giant and a high-tech enterprise