Core Viewpoint - The company, Hangzhou Fu'en Co., Ltd., is responding to the Shenzhen Stock Exchange's inquiries regarding its IPO, focusing on its recycled fabric technology, production capacity expansion, and compliance issues [1][3]. Company Overview - Hangzhou Fu'en Co., Ltd. is a global supplier of eco-friendly fabrics, emphasizing sustainable development in its operations [6]. - The company aims to raise approximately 1.25 billion yuan through its IPO, which was accepted on June 24, 2025 [6]. Market Position - The company claims a market share of 4% in recycled polyester-cotton blended fabrics and 6% in recycled color-spun fabrics, positioning itself as a leading player in the domestic recycled fabric sector [3]. - Fu'en's export scale ranks among the top in its category, recognized by the China National Textile and Apparel Council [3]. Technology and Innovation - The company has developed customized equipment and specialized processes to address challenges in recycled fabric production, claiming a high level of non-replicability of its core technologies [3][4]. - Fu'en asserts that the industry has not faced disruptive technological changes in the midstream fabric sector, with upcoming products expected to enhance performance and cost-effectiveness [4]. Compliance and Regulatory Issues - The company reported three administrative penalties, including fines totaling approximately 17.42 thousand yuan, which it claims do not constitute significant violations [4]. - Fu'en emphasizes that the penalties are minor and have been addressed appropriately [4]. Production Capacity and Financial Projections - The company plans to produce 73.97 million meters of fabric in 2024, with a capacity utilization rate of 92.6% and a sales rate of 98.7% [5]. - Fu'en's external procurement of color-spun yarn and fabric exceeds the planned production capacity from its fundraising projects, indicating a strong demand [5]. - The company anticipates an annual depreciation expense of approximately 86.71 million yuan from the new projects, which could negatively impact profitability if performance does not meet expectations [5].

Group 1: Company Overview - Tianfulong (天富龙) is set to issue shares at a price of 23.6 yuan per share with a P/E ratio of 20.93, which is lower than the industry average of 32.3 [1] - Fuen Co., Ltd. (福恩股份) has submitted its prospectus for an IPO on the Shenzhen Main Board, with CITIC Securities as the sponsor [1][3] - Fuen Co. specializes in recycled fabrics for clothing, serving major brands like H&M, Uniqlo, and Zara, but faces risks related to high brand concentration and increasing accounts receivable [1][8] Group 2: Financial Performance - Fuen Co. reported revenues of approximately 17.64 billion yuan in 2022, 15.17 billion yuan in 2023, and an expected 18.13 billion yuan in 2024, with net profits of 2.77 billion yuan, 2.29 billion yuan, and 2.75 billion yuan respectively [22] - The company’s gross profit margins were 27.79%, 29.97%, and 28.65% over the reporting periods, slightly above the average for comparable companies [23] Group 3: Market Position and Risks - Fuen Co. holds a market share of approximately 4% in recycled polyester blended fabrics and 6% in recycled color-spun fabrics in the domestic market [22] - The company faces risks from high customer concentration, with the top five clothing brands accounting for about 70% of its revenue [15] - Accounts receivable have been increasing, with values of approximately 246 million yuan, 255 million yuan, and 274 million yuan over the reporting periods, representing about 30% of current assets [16]