Core Viewpoint - Jiangsu Benchuan Intelligent Circuit Technology Co., Ltd. is undergoing a review process for issuing convertible bonds, with specific financial accounting issues raised by the Shenzhen Stock Exchange that require clarification and quantification of revenue and profit fluctuations during the reporting period [1][3]. Financial Performance Summary - The company's operating revenue for the reporting period was 559.26 million, 510.94 million, 596.10 million, and 170.49 million yuan, with net profits after deducting non-recurring gains and losses of 34.05 million, -110.45 million, 74.60 million, and 28.18 million yuan respectively [1][11]. - The gross profit margins for the main business were 15.79%, 11.60%, 12.42%, and 15.69% during the same periods [1][19]. - The company experienced a significant drop in net profit in 2023, primarily due to decreased market demand and increased manufacturing costs, leading to a gross margin decline from 19.25% to 16.86% [11][28]. Revenue Composition and Trends - The company's revenue composition included 90.96% from main business and 9.04% from other business activities, with the latter primarily consisting of sales from waste materials [12][20]. - The company’s foreign sales accounted for 57.37%, 52.13%, 48.39%, and 50.78% of main business revenue, with major export markets being the United States and Europe [2][3]. - The company’s production capacity utilization rates were 82.68%, 77.54%, 87.40%, and 85.95% during the reporting periods [2][3]. Industry Context - The global PCB market saw a decline in value by approximately 14.96% in 2023, with a significant drop in sales prices, indicating intense competition within the industry [5][13]. - China has become the largest production area for PCBs, accounting for 56% of the global market share in 2024 [7][8]. - The PCB industry is characterized by a low concentration of manufacturers, leading to a competitive market environment [7][8]. Product and Market Dynamics - The company has established a flexible production management system to meet diverse customer specifications, which is crucial given the complexity of PCB manufacturing [8][9]. - The company has a strong focus on R&D, holding several core technologies and certifications that enhance its competitive edge in the market [9][10]. - The sales of single/double-sided boards and multi-layer boards represented significant portions of the company's revenue, with fluctuations in sales prices and volumes impacting overall profitability [15][21]. Cost and Expense Analysis - The company’s total expenses during the reporting periods were 66.32 million, 88.59 million, 90.80 million, and 27.55 million yuan, with a rising trend in sales and management expenses [25][26]. - The increase in sales expenses was attributed to efforts to expand market presence and enhance brand recognition [25][26]. - R&D expenses remained a significant part of the budget, reflecting the company's commitment to innovation and technology development [26][27].

Core Viewpoint - Jiangsu Benchuan Intelligent Circuit Technology Co., Ltd. is responding to the Shenzhen Stock Exchange's inquiry regarding its application to issue convertible bonds, providing detailed explanations and modifications to its fundraising prospectus based on the inquiry [1][2]. Financial Performance - The company's operating revenue for the reporting periods was 559.26 million yuan, 510.94 million yuan, 596.10 million yuan, and 170.49 million yuan, with net profits (excluding non-recurring gains and losses) of 34.05 million yuan, -6.74 million yuan, 16.97 million yuan, and 9.04 million yuan respectively [1][2]. - The net cash flow from operating activities was 110.45 million yuan, 74.60 million yuan, 28.18 million yuan, and 17.90 million yuan, indicating a decline in cash flow despite revenue and net profit growth [1][2]. Business Segments - Other business income primarily came from the sale of waste materials, with revenues of 25.17 million yuan, 30.86 million yuan, 45.35 million yuan, and 15.41 million yuan, achieving a gross margin exceeding 90% [2]. - The proportion of foreign sales in the main business revenue was 57.37%, 52.13%, 48.39%, and 50.78%, with major export markets including the United States and Europe [2]. Market Conditions - The PCB industry faced a significant downturn in 2023, with a global market value decline of approximately 14.96%, leading to a drastic drop in product sales prices [15]. - The PCB market is projected to recover, with a total global electronic product market expected to reach 2.55 trillion USD in 2024, growing by 7.4% year-on-year [6][9]. Competitive Advantages - The company emphasizes flexible production management, advanced technology and R&D capabilities, and a strong quality control system, which are critical for maintaining competitiveness in the PCB market [10][11][12]. - The company has established long-term strategic partnerships with leading downstream enterprises, enhancing its brand recognition and market position [11]. Cost Structure - The company's operating costs and gross profit margins have fluctuated, with gross margins of 19.25%, 16.86%, 18.87%, and 22.98% over the reporting periods, influenced by changes in product sales structure and pricing [20][21]. - Period expenses were reported at 66.32 million yuan, 88.59 million yuan, 90.80 million yuan, and 27.55 million yuan, with a rising trend in sales and management expenses due to increased market activities [26][27].