GEM(SZ:002340) Xin Lang Zheng Quan·2025-09-02 12:36Core Viewpoint - Greeenme's upcoming Hong Kong IPO is driven by a pressing need for financing due to a significant debt gap of nearly 9 billion, despite the company's expanding revenue. The company's unit value has sharply declined, raising concerns about potential hidden issues in its asset statements [1][5]. Financial Performance - In the first half of 2025, Greenme achieved a revenue of 17.56 billion, a year-on-year increase of 1.28%, with the new energy battery materials business accounting for nearly 60% of total revenue, growing at a mere 0.56% [2][3]. - The company's capital expenditures surged from 1.43 billion in 2020 to 11.94 billion in 2024, with 6.63 billion spent in the first half of 2025 [3][5]. - The net profit attributable to shareholders for the first half of 2025 was 799 million, reflecting a year-on-year growth of 13.91% [10]. Debt and Financing - As of mid-2025, Greenme's short-term debt stood at 14.29 billion and long-term debt at 18.69 billion, while available cash and trading financial assets totaled only 5.4 billion, indicating a short-term debt gap of nearly 10 billion [5]. - The company is heavily reliant on debt for expansion, with financial expenses consuming a significant portion of profits, peaking at 49% of net profit in 2024 [5]. Business Model and Operations - Greenme operates a dual business model of "urban mining and new energy materials manufacturing," focusing on recycling key mineral resources and producing battery materials [2]. - The company has established a comprehensive supply chain for nickel resources, producing high-end battery materials that are widely used in electric vehicles and energy storage [6][7]. Inventory and Production Efficiency - Despite increasing revenue, the efficiency of unit production value has declined, with fixed asset unit values dropping from 2.18 in 2022 to 1.34 in 2024 [10]. - The company reported a high average capacity utilization rate of over 95% in its new energy business, significantly exceeding industry averages, while also experiencing a substantial increase in inventory and prepayments, which rose from 7.48 billion in 2020 to 16.51 billion by mid-2025 [12][14]. Market Position and Strategic Moves - Greenme's new energy materials business saw a revenue increase of 10.24% in 2024, while the urban mining business grew by 3.87% [11]. - The company is seeking to attract strategic investors for its subsidiary in Indonesia to enhance its global competitiveness and integrate deeper into the European and American markets [6][7]. Concerns and Regulatory Issues - There are concerns regarding the high inventory levels and prepayments, which may indicate potential financial engineering practices to defer cost recognition [15]. - The company's auditing firm faced scrutiny for inadequate audit procedures, leading to a change in auditors [16].