A-share subscription | Nylon manufacturer Haiyang Technology opens subscription, may face the risk of declining gross margin

According to Zhitong Finance APP, on June 3, Haiyang Technology (603382.SH) opened for subscription, with an issue price of 11.50 yuan per share, a subscription limit of 14,500 shares, and a price-to-earnings ratio of 12.69 times. It is listed on the Shanghai Stock Exchange, with Dongxing Securities as its sponsor. The prospectus reveals that Haiyang Technology is one of the main enterprises in China engaged in the research, development, production, and sales of nylon 6 series products. The company has formed a complete product system of nylon 6 series, including chips, yarns, and tire fabrics. The main products of the company are nylon 6 chips, nylon 6 yarns, and tire fabrics, which are divided into nylon 6 tire fabrics, polyester tire fabrics, and nylon 66 tire fabrics. As of now, the issuer has established long-term cooperation with well-known large domestic and foreign chemical, chemical fiber, and tire companies in the field of the issuer's main products, including BASF, Enka, Xiaoxing Group, Jinfa Technology, Huading Co., Ltd., Aifeier, Cheng Shin Rubber, Zhongce Rubber, Linglong Tire, Senqilin, Giti Tire, Pulin Chengshan, and Double Star Tire. In terms of finance, for the fiscal years 2021, 2022, 2023, and the first half of 2024, the company achieved operating revenues of approximately 3.947 billion yuan, 4.067 billion yuan, 4.113 billion yuan, and 2.742 billion yuan, respectively, with net profits of approximately 282 million yuan, 167 million yuan, 140 million yuan, and 81.2472 million yuan, respectively. The gross profit margins of the main business were 15.05%, 10.37%, 8.12%, and 7.83%, respectively. Haiyang Technology stated that from 2021 to 2023, the issuer's operating revenue showed slight growth, but net profit continued to decline, with a significant drop in 2022, mainly due to changes in the supply and demand relationship of tire fabric products in the domestic market. In addition, Haiyang Technology has warned of debt repayment risks in its prospectus. Due to the relatively single financing methods, the funds for the company's various investments mainly come from bank loans, resulting in a relatively high asset-liability ratio and low current and quick ratios. At the end of each reporting period, the company's asset-liability ratios were 53.20%, 48.80%, 56.70%, and 61.21%, respectively; the current ratios were 1.14, 1.25, 1.10, and 1.15, respectively, and the quick ratios were 0.80, 0.86, 0.79, and 0.81, respectively. If there are significant adverse changes in the company's production and operation, it will affect the normal sales of the company's products and the turnover of funds, which may lead to significant debt repayment risks for the company