SINYUAN ZM(SZ:301398) Xin Lang Cai Jing·2025-09-09 13:32Core Viewpoint - Xingyuan Zhuomei has responded to the Shenzhen Stock Exchange's inquiry regarding its application for issuing convertible bonds, providing detailed explanations on financial fluctuations and project planning [1][4]. Financial Performance - The company's main business revenue for the reporting period was 214.68 million, 265.98 million, 346.83 million, and 285.20 million, showing a growth trend [1]. - The net cash flow from operating activities was lower than net profit from 2021 to 2024, primarily due to changes in inventory and operating receivables, as well as non-cash expenses [1]. - In the first half of 2025, net cash flow from operating activities exceeded net profit, attributed to an increase in cash received from sales and government subsidies [1]. Profitability Metrics - The gross profit margins from 2021 to June 2025 were 41.65%, 36.41%, 34.83%, 35.43%, and 30.72%, indicating a downward trend influenced by raw material price fluctuations [2]. - The cost of raw materials for magnesium alloy die-casting increased by approximately 57.59% in 2022, leading to a 9.76 percentage point decline in gross margin compared to the previous year [2]. - Xingyuan Zhuomei maintains a higher gross margin compared to industry peers due to its business focus, operational scale, and strategic choices [2]. Sales and Inventory Management - The company's foreign sales revenue closely matched export customs declaration amounts and tax refunds, indicating reliable collection from foreign clients [3]. - Inventory levels increased significantly during the reporting period, justified by business growth and raw material stocking [3]. - The inventory structure primarily consists of raw materials, work-in-progress, and finished goods, with a consistent proportion above 85% across reporting periods [3]. Fundraising and Project Investment - Xingyuan Zhuomei plans to raise up to 450 million RMB for a project to produce 3 million sets of high-strength magnesium alloy precision components for automobiles [4]. - The investment scale of the project is reasonable, with unit capacity investment lower than the industry average, and all project details are conservatively estimated [4]. - Although the project may lead to increased depreciation and dilution of net asset returns in the short term, it is expected to significantly enhance the company's long-term profitability [4].