Core Viewpoint - Chao Yang Jin Da Titanium Industry Co., Ltd. (Jin Ti Co.) is preparing for its listing on the Beijing Stock Exchange, with a focus on high-end sponge titanium products used in aerospace and defense sectors. The company faces challenges including a significant reduction in fundraising, high levels of receivables, and low R&D investment compared to peers [1][9][18]. Group 1: Company Overview - Jin Ti Co. specializes in the research, production, and sales of sponge titanium products, with over ten years of experience in high-end applications [1]. - The actual controllers of the company are Zhao Chunlei and Wang Shuxia, who hold over 64% of the voting rights [3][4]. - The company has a history of financial issues, including a significant amount of outstanding loans exceeding 90 million yuan [5][6]. Group 2: Financial Performance - In the first three quarters, Jin Ti Co. reported revenue of 12.72 billion yuan and a net profit of 1.55 billion yuan, marking year-on-year increases of 12.43% and 52.68%, respectively [23]. - The average selling price of its main product, sponge titanium, has been declining, with prices per ton dropping from 72,600 yuan to 46,600 yuan over recent years [23][24]. - The company’s revenue from sponge titanium products accounted for over 90% of total sales, with aerospace-grade products being the primary contributor [23][24]. Group 3: Fundraising and Investment - Jin Ti Co. plans to raise 4.05 billion yuan through its IPO, a reduction of 3.45 billion yuan from the initial proposal [9][18]. - The company has faced scrutiny regarding its ability to absorb new production capacity, with a proposed expansion of 20,000 tons, which is 67% of its current capacity [11][14]. Group 4: Research and Development - The company’s R&D expenditure has been low, with a rate of around 1%, significantly lower than competitors like Baotai Co. and Longbai Group, which have rates exceeding 3% [18][21]. - Jin Ti Co. has received recognition as a high-tech enterprise, but questions remain about its ability to maintain this status given its low R&D investment and workforce composition [22][21]. Group 5: Operational Challenges - The company has high levels of accounts receivable and inventory, with accounts receivable increasing from 125 million yuan to 399 million yuan over recent years [25][26]. - Jin Ti Co. has experienced significant fluctuations in operating cash flow, with net outflows in 2022 and 2023, raising concerns about its financial stability [26].