Yongda Co., Ltd. has increased production equipment but has not seen a growth in capacity, and major clients' overdue payments have reached 80%.

[Comprehensive Financial Report by Global Network Finance] Jiangsu Yongda Chemical Machinery Co., Ltd. specializes in the production and manufacturing of pressure vessels, with downstream applications in basic chemicals, coal chemicals, refining and petrochemicals, photovoltaics, and pharmaceuticals. Currently, the company is applying for listing on the Beijing Stock Exchange.

According to the prospectus (pre-IPO review draft) released by Yongda Co., Ltd. in November 2025, prior to the last IPO review meeting, it is estimated that the lower limit of the year-over-year change in net profit attributable to parent in 2025 is an increase of 5.89%, and the lower limit of the year-over-year change in net profit after deducting non-recurring gains and losses attributable to parent is -6.57%. However, based on Yongda’s later actual 2025 annual report, the net profit attributable to parent increased by 2.49% year-over-year, and the net profit after deducting non-recurring gains and losses attributable to parent decreased by 9.61%, both of which are lower than the previously announced prospectus estimates.

Public information also shows that Yongda Co., Ltd. was temporarily suspended from review during its IPO review in November 2025, making it the first company in 2025 to receive a “suspension of review” decision from the Beijing Stock Exchange. According to disclosed information at that time, in November 2025, Yongda Co., Ltd. confirmed revenue of 174.7327 million yuan from a subsidiary of Heseng Silicon Industry, which also became Yongda’s largest customer in 2025, with accounts receivable and contract assets totaling 77.9792 million yuan; in the same month, Yongda signed a settlement agreement with Heseng Silicon Industry, agreeing that Heseng Silicon Industry would pay 1.5 million yuan monthly starting from November 2025 until the debt was fully paid. That is, Heseng Silicon Industry’s debt of less than 80 million yuan would take 52 months, or over four years, to settle.

The information disclosed in this review application again shows that Yongda Co., Ltd. agreed to give Heseng Silicon Industry a discount on the owed amount, and for the previously formed accounts receivable of 77.9792 million yuan, a bad debt provision of 27.7532 million yuan was made, accounting for one-quarter of Yongda’s net profit attributable to parent in 2025. The prospectus also disclosed that the revenue contract with Heseng Silicon Industry worth 174.7327 million yuan has a gross profit margin of 19.10%, corresponding to a gross profit of less than 35M yuan; considering the final bad debt provision of 27.7532 million yuan and factors like VAT, this may indicate that the business could incur a loss, but the company did not respond to interview requests on this matter.

It is worth noting that as of the end of 2025, Yongda’s third-largest accounts receivable customer was “Shenghong Holding Group Co., Ltd.,” with an owed amount of 44.4526 million yuan and a bad debt provision of 8.8656 million yuan. The prospectus disclosed that “Shenghong Holding Group Co., Ltd.” is a leading company in the chemical industry, with the world’s largest PV-grade EVA capacity and the largest PETG capacity in China.

However, public information shows that the current “Shenghong Holding Group Co., Ltd.” also faces high industry standing but insufficient payment ability. This is highlighted in the “Reply to Inquiry Letter” on page 463, which discloses the “credit status, overdue status, overdue duration, whether there are lawsuits with the issuer, and post-approval repayment situation” of major customers with receivables over one year (including warranty deposits). It shows that over 80% of the overdue amount in this customer’s debt accounts for the total accounts receivable.

Moreover, according to the “Major Sales Contracts” disclosed on page 1778 of the prospectus, there are three contracts related to “Shenghong Refining (Lianyungang) Co., Ltd.,” all of which have been fulfilled, with amounts of 45.7551 million yuan, 79.7125 million yuan, and 33.8673 million yuan. However, the same contracts involving “Shenghong Refining (Lianyungang) Co., Ltd.” were also disclosed in the March 2024 public transfer prospectus (draft application) on page 242, with amounts of 46.19M yuan, 79.7125 million yuan, and 32.51M yuan, respectively. There are discrepancies between these figures and those in the current prospectus. The reason for the change in the amounts of already fulfilled contracts has not been addressed by Yongda.

Additionally, according to the prospectus, Yongda’s pressure vessel capacity remained unchanged from 2023 to 2025, maintaining a scale of 25k tons. However, based on the company’s earlier March 2024 public transfer prospectus, as of the end of 2023, the main production equipment’s original value was only about 37 million yuan, including 44 cranes, 19 cutting machines, 5 coil sheet machines, 315 welding machines, etc. Now, in the listing application, the disclosed original value of main production equipment as of the end of 2015 has approached 60 million yuan, an increase of 50% from the end of 2023, with cranes increased to 69 units, cutting machines to 21, coil sheet machines to 6, and welding machines to 401. The prospectus emphasizes that “the company’s fixed asset procurement is based on actual business expansion needs,” but the significant increase in major equipment has not resulted in corresponding capacity expansion.