SHEN YU(SZ:300563) Zheng Quan Zhi Xing·2025-08-08 16:11Core Viewpoint - The company is seeking to issue convertible bonds to unspecified investors, with legal opinions provided to ensure compliance with relevant regulations and to address inquiries from the Shenzhen Stock Exchange regarding the issuance process [1][2]. Group 1: Business Operations - The company's gold wire drawing business is primarily conducted by its subsidiary, Jiangsu Shenchang, which processes gold into wire for the semiconductor industry, specifically for chip manufacturing [3][4]. - The company has been engaged in gold wire drawing since around 2012, initially to meet customer demand for electronic components [4]. - Due to high gold prices, the company has faced liquidity constraints, leading to a reduction in the scale of its gold wire drawing operations since the first quarter of 2025 [5][9]. Group 2: Financial Performance - The revenue from the gold wire drawing business has increased in line with rising gold prices, but there was a notable decline in the first quarter of 2025 due to increased capital requirements for raw material procurement [5][9]. - The company’s plastic business, which supplies materials for coaxial cables, operates on a smaller scale and is subject to fluctuations based on production needs and market prices [6][9]. Group 3: Client Relationships - Major clients for the gold wire drawing business include Hangzhou Silan Microelectronics Co., Ltd., which has shown consistent revenue growth, indicating a solid trading background for the company's sales [8]. - The plastic business serves various clients in the chemical industry, with sales dependent on the production needs of coaxial cables [8]. Group 4: Revenue Recognition - The company recognizes revenue from both the gold wire drawing and plastic businesses using the gross method, as it retains control over the products and bears the associated risks [10][12]. - Contracts for the gold wire drawing business include terms that specify the company's responsibilities regarding product quality and delivery, reinforcing its role as the primary responsible party in transactions [10][11]. Group 5: Investment Properties - As of March 31, 2025, the company owns investment properties primarily used for production and office purposes, with a small portion leased out to enhance asset utilization [15]. - The investment properties account for a minor percentage of the company's total assets, indicating a focus on core business operations rather than real estate development [15][16]. Group 6: Financial Investments - The company has a long-term equity investment in Liyuan New Energy, amounting to 28.36 million yuan, which is classified as a financial investment due to its unrelated nature to the company's main business [21][22]. - As of March 31, 2025, the company does not hold significant financial investments that exceed 30% of its net assets, complying with regulatory requirements [21][22]. Group 7: Fundraising Projects - The company plans to expand its production capacity for coaxial cables, with a focus on high-speed data cables, to meet increasing market demand driven by technological advancements [24][25]. - The fundraising project is divided into two phases, with the first phase aimed at producing 272,500 kilometers of data cables, reflecting the company's strategic response to market trends [24][26].