GON(SZ:002768) Sou Hu Cai Jing·2025-07-29 12:18Core Viewpoint - Guoen Co., Ltd. is striving for an IPO on the Hong Kong Stock Exchange to expand its global production capacity and address financial pressures due to rising debt levels and declining profit margins [1][2][8]. Group 1: Company Overview - Guoen Co., Ltd. is a leading player in the domestic chemical new materials industry, focusing on two main sectors: large chemicals and health [1]. - The company has a diverse product range, including collagen, hollow capsules, gelatin, and organic polymer materials, which are essential raw materials for pharmaceuticals, health products, home appliances, food, and some industrial products [1]. - Founded in 2000 by Wang Aiguo, Guoen has grown from a startup to a major industry leader, with annual revenues nearing 20 billion RMB [3][4]. Group 2: Financial Performance - The company's revenue increased from 750 million RMB in 2015 to 19.19 billion RMB in 2024, while net profit rose from 72.24 million RMB to 685 million RMB during the same period [6]. - However, the asset-liability ratio has surged from 28.36% in 2015 to 61.68% in 2024, with total liabilities increasing from 280 million RMB to 11.32 billion RMB, indicating a significant reliance on debt for expansion [8][9]. - As of the end of 2024, the company had cash and cash equivalents of 2.015 billion RMB, insufficient to cover short-term borrowings of 2.217 billion RMB, highlighting liquidity challenges [9][10]. Group 3: Market Challenges - Guoen's gross profit margin has been declining, from 14.75% in 2021 to 8.71% in 2024, which constrains profitability [15]. - The large chemicals segment faces intense competition and price wars, while the health segment is impacted by procurement pressures from downstream pharmaceutical companies [16]. - In Q1 2025, the company reported a revenue decline of 0.23% year-on-year, marking the first drop in nearly a decade, with net profit decreasing by 9.8% [16]. Group 4: Strategic Initiatives - The company plans to use the funds raised from the Hong Kong IPO to enhance its global production capacity, including establishing production bases in Thailand, Vietnam, and Mexico [2][19]. - Guoen aims to increase its overseas revenue share, which was only 1.58% in 2024, as part of its strategy to mitigate growth bottlenecks [19]. - The international expansion is seen as a necessary step to align with the global market demands and improve cost efficiency [19].