Core Viewpoint - Huading Co., Ltd. plans to raise up to 707.5 million yuan through a private placement of shares, fully subscribed by its controlling shareholder, Zhenai Group, with a commitment to not transfer the shares for 36 months [1][2]. Fundraising Plan - The private placement will issue no more than 250 million shares, accounting for 30% of the pre-issue total share capital, with funds directed towards a project to produce 65,000 tons of high-quality differentiated nylon PA6 filament [2]. - Zhenai Group will finance the subscription through a combination of 40% self-owned funds (approximately 283 million yuan) and 60% self-raised funds (approximately 424.5 million yuan), primarily through bank loans secured by the newly issued shares [2][3]. - The group has engaged with major banks, obtaining loan commitment letters, and plans to use its good credit standing to secure the loans [2]. Control Stability - Zhenai Group has developed a multi-faceted repayment plan to address concerns about control stability, including cash dividends from its subsidiary, potential future dividends, and asset sales [3]. - The pledge of new shares will increase the group's share pledge ratio from 32.69% to between 49.36% and 73.78%, but banks have indicated they will not impose forced liquidation clauses [3]. Investment Project - The project has a total investment of 950 million yuan, with an internal rate of return of 14.72% and a payback period of approximately 7.96 years, focusing on high-end differentiated products for sportswear and yoga apparel [4]. - The project aligns with the company's existing operations, with a projected capacity utilization rate of 92.39% in 2024 [4]. Operating Performance - In the first half of 2025, the company reported revenue of 2.411 billion yuan, a decrease of 45.76% year-on-year, primarily due to the divestment of its cross-border e-commerce business and cyclical fluctuations in the nylon industry [5][6]. - The average sales price of nylon products fell by 12.55%, while the procurement price of nylon chips decreased by 19.47% [6]. - Accounts receivable and inventory risks are manageable, with a high percentage of receivables and inventory being within one year [6].