A-share subscription | JMT starts subscription, mainly engaged in the research and development of copper-based new materials

According to Zhitong Finance APP, on March 10, Jiangnan New Materials (603124.SH) opened for subscription, with an issue price of 10.54 yuan per share, a subscription limit of 11,500 shares, and a price-to-earnings ratio of 12.40 times. It is listed on the Shanghai Stock Exchange, with CITIC Securities as its exclusive sponsor.

The prospectus reveals that Jiangnan New Materials is primarily engaged in the research and development, production, and sales of copper-based new materials. The company's core products include three major categories: copper ball series, copper oxide powder series, and high-precision copper-based heat sink series. The copper ball series products independently developed by the company have been applied in various types and processes of PCB and copper plating processes for photovoltaic panels; the copper oxide powder series products have been applied in PCB copper plating processes, lithium battery PET composite copper foil manufacturing, and organic silicon monomer synthesis catalysts; the high-precision copper-based heat sink series products have been applied in the PCB embedded heat dissipation process. The company's core product industrial chain covers numerous fields, including communications, computers, consumer electronics, automotive electronics, industrial control, medical, aerospace, new energy, and organic silicon.

It is reported that Jiangnan New Materials' copper oxide powder series products achieved large-scale production and sales in 2021. The company plans to invest raised funds to add a production line with an annual output of 12,000 tons of electronic-grade copper oxide powder, which will significantly enhance the company's production capacity for copper oxide powder. The copper oxide powder products are expected to be an important growth point for the company's future revenue and profits.

In terms of finance, for the fiscal years 2019, 2020, and 2021, the company achieved operating revenues of approximately 2.990 billion yuan, 3.598 billion yuan, and 6.284 billion yuan, respectively. The company's net profits were approximately 61.2369 million yuan, 72.7145 million yuan, and 148 million yuan.

It is important to note that the prospectus specifically reminds investors to pay attention to the risk of continuously negative cash flow from operating activities. During the reporting period, the net cash flow from operating activities was approximately -1.25 billion yuan, -3.07 billion yuan, -5.70 billion yuan, and -2.47 billion yuan.

Jiangnan New Materials stated that the continuous negative net cash flow from operating activities is mainly due to: on one hand, the increase in the company's operating scale during the reporting period has led to a rapid growth in the demand for operating funds; on the other hand, there are differences in settlement methods with suppliers and customers, and some bills are listed in the cash flow from financing activities. If the company's credit policy or the collection situation from downstream customers undergoes significant adverse changes in the future, the net cash flow from operating activities may continue to be negative, thereby exposing the company to certain liquidity risks