Zheng Quan Zhi Xing·2025-09-05 16:23Core Viewpoint - Jushen Logistics Group Co., Ltd. is responding to an inquiry regarding its application to issue convertible bonds, highlighting recent financial performance and operational challenges, particularly in its transportation and warehousing segments [1][2]. Financial Performance - In Q1 2025, the company reported a net profit of -3.01 million yuan and a negative cash flow from operating activities of -36.73 million yuan, contrasting with a revenue of 259.60 million yuan, which represents a year-on-year growth of 22.74% [2][4]. - The company's transportation revenue for the reporting period was 970.05 million yuan, while warehousing revenue was 107.38 million yuan, indicating a significant reliance on transportation services [2][4]. Operational Challenges - The decline in net profit despite revenue growth is attributed to a decrease in gross margin by 4.84 percentage points, primarily due to losses in the Guinea land transportation business, which reported a gross margin of -135.71% [4][5]. - Management expenses increased by 74.39% year-on-year, largely due to the expansion of the management team for the Guinea operations, while financial expenses surged by 160.67% due to increased borrowing and foreign exchange losses [4][5]. Client Relationships - The company has deepened its collaboration with Tianshan Aluminum Group, becoming its exclusive service provider for certain logistics services starting in 2024, which positions Tianshan as the company's largest client [2][4]. - The emergence of Guangxi Fusheng Logistics as a top client shortly after its establishment raises questions about the sustainability and rationale behind this relationship, given its low registered capital [2][4]. Cash Flow and Debt Management - The company anticipates sufficient cash flow to cover the principal and interest of the proposed convertible bonds, with a projected operating cash flow of 46.38 million yuan for the first half of 2025 [5][10]. - The issuance of convertible bonds is seen as a strategic move to mitigate debt repayment pressure, with a relatively low interest rate compared to traditional debt instruments [10][12]. Business Model and Market Position - The company operates in the non-ferrous metal logistics sector, focusing on integrated logistics services, including transportation and warehousing, which are interlinked but can also operate independently [11][12]. - The company has established a strong market presence in key regions, with over 900,000 square meters of warehouse space, enhancing its competitive edge in the logistics market [14][15].