Core Viewpoint - Hunan Hualian Ceramics Co., Ltd. (referred to as "Huaci Co.") has responded to the Shenzhen Stock Exchange's inquiries regarding the sustainability of its overseas revenue, customer concentration, inventory management, and the feasibility of its investment project in Vietnam, confirming the viability of these aspects [1] Group 1: Overseas Revenue - The proportion of overseas sales revenue for Huaci Co. was 67.20%, 62.84%, 71.06%, and 65.27% during the reporting periods, with major clients including IKEA, Guizhou Moutai, and Wuliangye [2] - The top five overseas clients contributed 76.47% of the overseas revenue for the period from January to September 2025, with the largest client accounting for 65.27% [2] - The company maintains long-term cooperation agreements with major clients, with most partnerships exceeding 10 years, mitigating significant dependency risks [2] Group 2: Authenticity of Overseas Revenue - The report indicates a strong correlation between customs data and overseas sales revenue, with a discrepancy rate of less than 0.4% from 2022 to 2024 [3] - The VAT refund rates for the years 2022 to 2024 were 14.04%, 12.82%, and 12.20%, aligning closely with the standard refund rate of 13% [3] - The impact of exchange rate fluctuations on operating performance was minimal, with the highest exchange gain or loss accounting for only 0.57% of overseas revenue [3] Group 3: Inventory Management - As of September 2025, the book value of inventory was 182.49 million yuan, representing 13.37% of current assets, with 81.07% of inventory aged less than one year [4] - The inventory turnover ratio for Huaci Co. was consistently higher than that of comparable companies, reaching 4.72 times in 2024 [4] - The provision for inventory depreciation was in line with industry peers, with rates of 10.44%, 11.21%, 9.84%, and 9.59% from 2022 to September 2025, lower than the average of comparable companies [4] Group 4: Vietnam Investment Project - Huaci Co. plans to invest 1.438 billion yuan in establishing a daily-use ceramics production base in Vietnam, aiming for an annual production capacity of 165 million pieces [5] - The project is expected to generate annual sales revenue of 1.405 billion yuan and a net profit of 272 million yuan, with an internal rate of return of 14.25% [5] - The project has completed necessary approvals and has established cooperation intentions with local suppliers, with existing clients showing interest in purchasing approximately 60% of the new capacity [5]

Group 1 - The company Huaci Co., Ltd. announced the acquisition of land use rights from Hunan Anxun Logistics Transportation Co., Ltd. for a total price of 1.7214 million yuan [2] - The land is located in the ceramic industrial park and has a total area of 4,755.30 m², with clear property rights and no encumbrances [2] - This acquisition is expected to enhance the operational efficiency of the company's subsidiary, Hunan Hualian Juhua Electric Porcelain Co., Ltd., by optimizing internal resource allocation and strengthening control over production land [2] Group 2 - In the first three quarters, Huaci Co., Ltd. achieved total operating revenue of 1.133 billion yuan, representing a year-on-year increase of 15.32% [2] - The net profit attributable to the parent company for the same period was 189 million yuan, with a year-on-year growth of 12.17% [2] - The company's stock has experienced a continuous three-day limit-up, closing at 20.61 yuan per share on November 18, with a total market capitalization of 5.191 billion yuan [3]

Group 1 - The core viewpoint of the news is that Hunan Huaci Co., Ltd. experienced a significant stock price increase of 10.01%, reaching 17.04 CNY per share, with a total market capitalization of 4.292 billion CNY [1] - The company, established on August 1, 1994, specializes in the research, design, production, and sales of daily ceramic products, with its main revenue sources being colored glaze ceramics (95.43%), underglaze colorful ceramics (2.45%), electrical ceramics (1.32%), ceramic new materials (0.52%), and others (0.28%) [1] Group 2 - Among the top circulating shareholders of Huaci Co., Ltd., the Baodao Fund has a presence with its Baodao Jiuhang Mixed A Fund (008318), which entered the top shareholders in the third quarter, holding 762,100 shares, accounting for 0.31% of circulating shares [2] - The Baodao Jiuhang Mixed A Fund, established on December 24, 2019, has a latest scale of 1.473 billion CNY, with a year-to-date return of 39.12%, ranking 2047 out of 8140 in its category [2]

Core Viewpoint - The company, Hunan Hualian Ceramics Co., Ltd., is experiencing growth in its business segments, particularly in dental materials and cross-border e-commerce, benefiting from currency depreciation and strong overseas revenue. Group 1: Company Performance - The company's stock price increased by 1.86% on September 22, with a trading volume of 224 million yuan and a market capitalization of 4.148 billion yuan [1] - For the first half of 2025, the company reported a revenue of 726 million yuan, representing a year-on-year growth of 25.10%, and a net profit attributable to shareholders of 120 million yuan, up 21.63% year-on-year [7] - Cumulative cash dividends since the company's A-share listing amount to 272 million yuan, with 219 million yuan distributed over the past three years [8] Group 2: Business Segments - The company produces zirconia, a key material for dental products, and has indicated involvement in cross-border e-commerce [2] - Its subsidiary, Hualian Torch, manufactures electrical porcelain products primarily for high and ultra-high voltage applications, serving clients such as the State Grid [3] - The subsidiary's products, including insulators and wall bushings, are utilized in flexible direct current transmission systems, with supply contracts to major clients like the State Grid and Southern Grid [4] Group 3: Market Dynamics - The company benefits from a significant overseas revenue share, accounting for 71.06% of total revenue, aided by the depreciation of the yuan [5] - The stock has seen a net inflow of 23.72 million yuan from major investors, indicating a positive trend in investor sentiment [6] - The average trading cost of the stock is 15.28 yuan, with the current price approaching a resistance level of 16.55 yuan, suggesting potential for upward movement if the resistance is broken [6]

Group 1: Financial Performance - The company's revenue in the first half of 2025 increased by 25.1% year-on-year, while net profit attributable to shareholders grew by 21.63% [2] - The gross profit margin for the first half of 2025 was 33.04%, a decrease of 1.08 percentage points compared to the same period last year [2] - The net profit growth rate in the second quarter of 2025 reached 31.51%, indicating strong performance in the industry [3] Group 2: Research and Development - R&D investment for 2024 is projected to be 67.9 million yuan, accounting for over 5% of revenue [1] - In the first half of 2025, R&D expenditure was 31.92 million yuan, reflecting a year-on-year increase of 4.78% [2] - The company holds 503 patents, indicating a strong focus on innovation [1] Group 3: Market Strategy and Expansion - The company plans to invest 1.438 billion yuan in the "ASEAN Ceramic Valley" project, which is expected to add 165 million pieces of colored glaze ceramic capacity, accounting for 40% of current capacity [4] - The company aims to diversify its customer base, as the top two clients account for over 60% of revenue [3] - The establishment of a research center in Shenzhen is part of the strategy to enhance innovation and design capabilities [1] Group 4: Export and International Relations - The proportion of foreign sales reached 71.06%, with key clients including IKEA and William Sonoma [2] - The company faces a 16.5% anti-dumping tax on exports to the EU, but the new Vietnam base will reduce tariffs to 3%, potentially increasing export share [2] - The company has maintained growth in EU exports despite the anti-dumping measures since 2011 [2] Group 5: Risk Management - The company has identified 12 internal risks and 291 related risks, primarily involving legal disputes [4] - Measures have been implemented to ensure compliance and manage related transactions effectively [4] - Accounts receivable accounted for 70.35% of net profit in the first half of 2025, with an average collection period of about one month [5]

Core Viewpoint - Huaci Co., Ltd. has responded to the Shenzhen Stock Exchange's inquiry regarding its application for a specific stock issuance, detailing its business operations, related transactions, and fundraising projects, showcasing the company's business layout and development trends [1] Group 1: Business Operations - Huaci's export revenue accounted for 67.20%, 62.84%, 71.06%, and 65.27% over the reporting periods, with major clients including IKEA, Guizhou Moutai, and Wuliangye, indicating a stable customer structure [2] - The global ceramics market is on an upward trend, with China being the largest producer, exporter, and consumer of ceramic products, particularly in daily-use ceramics, where Huaci holds significant advantages [2] - The company has a high customer concentration but maintains stable cooperation with major clients, aligning with industry norms, and does not face significant dependency or substitution risks [2] Group 2: Related Transactions - Huaci has frequent related transactions with major parties such as Huacai Packaging and Yucha Ceramics, which are necessary for production and have been verified for fair pricing [3] - The pricing mechanism for related transactions is reasonable, and comparisons with non-related party transactions confirm their fairness [3] - Overall, related transactions have a minimal impact on the company's operating performance and do not constitute unfair transactions [3] Group 3: Fundraising Projects - The total investment for the fundraising project is approximately 1.44 billion yuan, with 700 million yuan raised for the ASEAN Ceramic Valley project in Vietnam, which aims to produce color-glazed ceramics with an additional annual capacity of 16.53 million pieces [4] - The project targets both existing and new overseas customers, with a favorable market environment and strong product competitiveness, ensuring high sales certainty and reasonable capacity planning [4] - The project is expected to generate annual revenue of 1.41 billion yuan and a net profit of 271.92 million yuan after reaching full capacity, with an internal rate of return of 14.25%, indicating cautious and reasonable benefit assessments [4]

Group 1 - The company plans to issue shares to specific investors, including its controlling shareholder, Zhi Yu Investment, and other qualified institutional investors, subject to regulatory approval [2][3][18] - The total amount to be raised from this issuance is not to exceed 700 million yuan, with the funds intended for specific investment projects [25][26] - The issuance will not change the company's control structure, as Zhi Yu Investment will remain the controlling shareholder post-issuance [27][31] Group 2 - The company aims to enhance its production capacity and efficiency by establishing a new production base in Vietnam, responding to increasing market demand for ceramic products [10][15][17] - The company has a strong international presence, with over 200 overseas clients across more than 60 countries, and aims to further expand its market share in the global ceramic industry [14][17] - The issuance is part of a broader strategy to align with national initiatives such as the Belt and Road Initiative and to strengthen supply chain cooperation with ASEAN countries [11][13][17] Group 3 - The issuance process will involve a pricing mechanism based on the average trading price of the company's shares over the 20 trading days prior to the pricing date [21][22] - Zhi Yu Investment has committed to subscribe for shares amounting to 30 million yuan, agreeing to the same price as other investors [6][21][31] - The company has established a shareholder return plan for 2025-2027, which includes measures to address potential dilution of immediate returns from the issuance [7][12]

Core Viewpoint - The report outlines the feasibility analysis for the fundraising plan of Hunan Hualian Ceramics Co., Ltd., focusing on the establishment of a new production base in Vietnam to enhance production capacity and meet growing international demand for colored glaze ceramics [5][19]. Fundraising Plan - The total amount to be raised from the issuance is not to exceed 700 million yuan, with the net proceeds intended for specific investment projects [3][4]. - The total investment for the project is estimated at 1.438 billion yuan, with 700 million yuan allocated from the fundraising [4]. Project Overview - The project will be located in Vietnam's Thanh Hoa Province, aiming to establish an overseas production base for daily-use ceramics [5]. - The project is expected to generate an annual revenue of 1.405 billion yuan and a net profit of 271.919 million yuan once operational [5]. Necessity and Feasibility Analysis - The company has experienced high sales rates for its colored glaze ceramics, indicating a need for increased production capacity to meet customer demand [5]. - The establishment of the new production base is crucial for enhancing the company's competitive edge and expanding its market share in both domestic and international markets [6][8]. Economic Benefits - The project is projected to achieve a post-tax internal rate of return of 14.25% and a payback period of 9.12 years [5]. - The company has a strong international customer base, with over 200 clients across more than 60 countries, making the project strategically important for global market penetration [6][16]. Industry Context - The ceramics industry is undergoing a transformation with advancements in production technology, necessitating the adoption of automated and intelligent manufacturing processes [7][8]. - Vietnam is positioned as a favorable investment destination due to its stable political environment, low labor costs, and strategic geographical location [13][14]. Strategic Alignment - The project aligns with China's Belt and Road Initiative, enhancing the company's ability to participate in international trade and investment [10][11]. - The establishment of the production base in Vietnam will complement the company's domestic operations and strengthen its supply chain [9][12]. Regulatory Compliance - The project has obtained necessary approvals and permits from relevant authorities in both China and Vietnam, ensuring compliance with local regulations [19].

Core Viewpoint - Huaci Co., Ltd. plans to expand its production capacity by establishing a new manufacturing base in Vietnam, funded by a private placement of up to 700 million yuan, marking its first refinancing since going public [2][4]. Group 1: Fundraising and Investment Plans - The company intends to raise up to 700 million yuan through a private placement, with the funds allocated entirely to the ASEAN Ceramic Valley project [3][4]. - The controlling shareholder, Zhiyu Investment, plans to subscribe for 30 million yuan of the new shares [3]. - The issuance will involve no more than 75.56 million shares to up to 35 specific investors [3]. Group 2: Production Capacity and Financial Projections - The new project in Vietnam aims to produce an additional 16.534 million pieces of colored glazed ceramics annually, with projected annual revenue of 1.405 billion yuan and net profit of 272 million yuan once operational [5]. - The internal rate of return on the investment is estimated at 14.25%, with a payback period of 9.12 years [5]. Group 3: Revenue and Profit Trends - Huaci Co., Ltd. reported revenues of 1.34 billion yuan in 2024, a year-on-year increase of 8.79%, and a net profit of 205 million yuan, up 14.21% [2][7]. - The company has consistently maintained a high sales rate for its colored glazed ceramics, with production and sales rates exceeding 110% from 2022 to 2024 [8]. Group 4: Market Presence and Strategy - The company has established a significant international presence, with foreign sales accounting for 67.20%, 62.84%, and 71.06% of total revenue from 2022 to 2024 [6]. - Huaci Co., Ltd. aims to leverage Vietnam's geographical advantages and cost efficiencies to enhance its market share in Europe and ASEAN countries [6]. Group 5: Dividend Policy - The company has increased its cash dividend payout, reaching 100 million yuan in 2024, which is 49.14% of its net profit [9]. - A future dividend plan is set to distribute at least 50% of net profit as cash dividends from 2025 to 2027 [9].