YouFa(SH:601686) Zhong Guo Jing Ying Bao·2025-12-03 13:49Core Viewpoint - Youfa Group has announced the termination of its A-share issuance plan for 2024, which was initially aimed at raising up to 1 billion yuan for capacity expansion, working capital, and repaying bank loans [1][2]. Group 1: Termination of Fundraising Plan - The planned issuance was approved by the board and shareholders in late 2024 but was ultimately terminated due to the expiration of the authorization period and considerations of market conditions and company strategy [2]. - The company stated that the termination of the fundraising will not significantly impact its normal operations or shareholder interests [2]. Group 2: Financial Stability Concerns - The termination of the fundraising plan raises concerns about the potential pressure on Youfa Group's cash flow, especially given its rising debt levels [3]. - Youfa Group's debt-to-asset ratio has increased from 54.37% in 2021 to 71.44% by the third quarter of 2025, significantly higher than the industry average [4]. - The company's bank loan balance has also risen, reaching 70.56 billion yuan by mid-2024, with corresponding interest expenses fluctuating over the years [4]. Group 3: Performance Trends - Youfa Group's main products are steel pipes used in various sectors, including water supply, gas supply, and construction [5]. - The company has experienced fluctuating profits due to declining steel prices, reduced demand, and rising costs, with net profits dropping from 11.43 billion yuan in 2020 to 4.25 billion yuan in 2024 [6]. - However, in 2025, Youfa Group reported a significant rebound in profitability, with a net profit of 5.02 billion yuan in the first three quarters, marking a 399.25% year-on-year increase [7].