Summary of Key Points Core Viewpoint - The company has decided to terminate certain fundraising projects and adjust the implementation locations of others to optimize resource allocation and improve fundraising efficiency [5][9]. Fundraising Overview - The company raised a total of RMB 1,172.4 million through its initial public offering, with a net amount of RMB 1,057.89 million after deducting issuance costs [1][2]. - The fundraising plan included a total investment of RMB 839.74 million across various projects [2]. Changes in Fundraising Projects - The company has approved the addition of a new project, "Solar Photovoltaic Module Junction Box Production Project," and adjusted the investment amounts for existing projects [2][3]. - The total investment for the revised fundraising plan is RMB 1,319.74 million, with the planned fundraising amount remaining at RMB 839.74 million [3]. Termination of Fundraising Projects - The "Annual Production of 6.5 Million Sets of New Energy Vehicle Roofs, Mudguards, and Wiring Harnesses Construction Project" has been terminated due to internal business integration needs [5]. - The total investment for the terminated project was RMB 100 million, with RMB 88 million planned for fundraising, of which RMB 23.77 million has been utilized [5][6]. Reasons for Project Termination - The decision to terminate the project was based on the assessment that existing production capacity meets current demand, and further investment could lead to idle capacity risks [5]. - The company aims to enhance fundraising efficiency and avoid redundant construction by reallocating resources to higher-priority projects [5]. Use of Remaining Funds - Remaining funds from the terminated project will continue to be stored in a dedicated account, with plans for future investment in projects that demonstrate good market prospects [6]. - The company will ensure compliance with relevant regulations regarding the use of fundraising [6]. New Implementation Locations - The company has proposed a new implementation location for the "R&D Center Upgrade Project" to optimize resource allocation and accelerate project progress [7]. - The new location is expected to enhance the quality of fundraising projects and improve overall competitiveness [7]. Review Procedures and Opinions - The board of directors has approved the termination and location changes, stating that these decisions will not adversely affect the company's operations and align with long-term development goals [8][9]. - The sponsor institution has confirmed that the changes comply with relevant regulations and do not harm shareholder interests [9].

Investment Rating - The report maintains a "Recommended" rating for Tongling Co., Ltd. [3] Core Views - The profitability of the junction box segment has significantly declined, while automotive components have become the second main business for the company [1][2] - The company achieved a revenue of 1.587 billion in 2024, a year-on-year increase of 3.04%, but the net profit attributable to shareholders dropped by 56.73% to 71.395 million [1] - The average selling price of photovoltaic junction boxes decreased by 18.0% from 15.54 yuan per unit in 2023 to 12.74 yuan in 2024, impacting profitability [1] - The automotive parts business generated 300 million in revenue in 2024, accounting for 18.9% of total revenue, with a net profit contribution of 24.386 million [2] Financial Performance Summary - In Q1 2025, the company reported a revenue of 419 million, a 2.65% increase year-on-year, but the net profit fell by 41.64% to 20.880 million [1] - The gross margin for the junction box segment dropped from 22.90% in 2023 to 15.43% in 2024 [1] - The company expects net profits for 2025, 2026, and 2027 to be 109 million, 164 million, and 208 million respectively, with corresponding EPS of 0.91, 1.36, and 1.73 [3][4] Market Position and Outlook - The market share of the company decreased from 11.7% in 2023 to 9.4% in 2024, primarily due to delays in overseas capacity expansion [2] - The company anticipates a recovery in profitability for the junction box segment in 2025 as the photovoltaic industry prices stabilize [2] - The automotive parts project has a gross margin of 27.52%, which helps alleviate the pressure from the company's single product structure [2]