Core Viewpoint - Shen Yu Communication Technology Co., Ltd. (Shen Yu Shares) is raising up to RMB 500 million for smart data line construction projects, with a focus on enhancing its core business in high-frequency RF coaxial cables [2][3]. Group 1: Financial Performance and Concerns - In 2024, Shen Yu Shares reported a significant discrepancy between raw material purchases (RMB 366.64 million) and the cost of coaxial cable production (RMB 457.69 million), resulting in a gap of RMB 91.05 million, raising questions about inventory management and cost reporting [4][6]. - The company's inventory increased from RMB 142.32 million at the end of 2023 to RMB 147.46 million at the end of 2024, contradicting claims of significant material consumption [6][7]. - The audit report issued by Tianzhi International raised concerns about the adequacy and effectiveness of the audit procedures, given the apparent inconsistencies in financial data [7]. Group 2: Business Strategy and Revenue Sources - Shen Yu Shares has a low-margin gold wire drawing business that contributed over 20% of its revenue from 2022 to 2024, despite a gross margin of around 2%, indicating a potential misalignment with core business strategies [8][9]. - The decision to reduce the scale of the gold wire drawing business coincides with the company's plan to issue convertible bonds, suggesting a strategic move to enhance its appeal to investors by focusing on core operations [9]. Group 3: Fundraising and Project Viability - The company plans to raise RMB 504 million for a smart data line project, which has a projected internal rate of return (IRR) of only 12.58%, significantly lower than industry standards of 16% to 25% [10][11]. - Shen Yu Shares has a history of project execution failures, including a previous project with an IRR of 19.84% that did not meet expected benefits, raising doubts about the feasibility of the new project [10][11]. - The company’s argument for absorbing new production capacity relies on optimistic market expectations, which may not account for potential price competition and margin erosion [12].

Group 1 - The brain-computer interface (BCI) sector has seen significant advancements since 2025, with related stocks experiencing substantial increases, such as Saily Medical up 165.37% and Innovative Medical up 92.46% as of July 3 [1] - The A-share BCI sector has an overall increase of 49.1% this year, indicating a strong market sentiment towards this industry [1] - Policy support has been a driving force, with cities like Beijing and Shanghai launching five-year action plans for BCI development, aiming to cultivate innovative enterprises and achieve clinical application of BCI products by 2030 [1][2] Group 2 - The establishment of China's first BCI industrial cluster in Shanghai marks a significant step in the domestic BCI landscape, with the new facility expected to be operational within the year [2] - The stock market has reacted positively, with multiple BCI-related stocks experiencing consecutive gains, such as Saily Medical and Jihua Group achieving three consecutive trading limits [2] - The BCI theme index in A-shares has risen by 4.96% over the past month, reflecting ongoing investor interest [2] Group 3 - Companies are increasingly engaging with investors regarding BCI developments, with Chengyitong announcing a dual-track strategy in invasive and non-invasive BCI technologies [3] - Chengyitong plans to release three prototypes of neuro-rehabilitation devices integrating BCI technology by July 2024 [3] - Other companies, such as Chengdu Huamei and Pulite, are also exploring BCI applications, focusing on signal processing hardware and high-performance materials, respectively [3]