Core Viewpoint - The Shanghai Stock Exchange has raised concerns regarding the pricing fairness of glass fiber purchased by Zhenstone Co. from its related party, China Jushi, particularly noting that the procurement prices during the reporting period were lower than those from third-party suppliers [1] Group 1 - Zhenstone Co. responded that the contract prices for E6 and E7 glass fibers purchased from China Jushi do not exhibit significant anomalies compared to the average selling prices of similar products to all customers [2] - The contract price for E8 glass fiber is aligned with the price movements of E7 glass fiber, indicating no obvious irregularities [2] - For the first half of 2025, the price of E8 glass fiber purchased from International Composites is roughly equivalent to the corresponding prices, while the price for E7 from China Jushi shows slight differences compared to International Composites [2] Group 2 - The price differences are attributed to several factors, including variations in procurement price structures, timing of contract negotiations, and differences in purchasing scale effects [2] - The contract price with China Jushi is based on ex-factory prices (excluding freight), while the contract with International Composites includes freight costs [2] - The procurement demand for glass fibers in 2025 is primarily directed towards China Jushi, with expected purchases from International Composites accounting for less than 10% of the total procurement volume [2]

Core Viewpoint - After being privatized and delisted from the Hong Kong stock market in 2019, Zhenstone Co., Ltd. is re-entering the capital market after six years, with significant revenue growth and a stable outlook for its performance despite some risks of revenue decline in the coming years [1]. Financial Performance - In the first three quarters of this year, the company achieved operating revenue of 5.397 billion yuan, an annualized increase of 62.13% compared to 2024 [1]. - The net profit after deducting non-recurring gains and losses was 567 million yuan, with an annualized increase of 26.62% compared to 2024 [1]. - The company reported a total asset value of 10.941 billion yuan as of June 30, 2025, up from 9.039 billion yuan at the end of 2024 [2]. - The total liabilities to assets ratio was 69.27% as of June 30, 2025, compared to 67.77% at the end of 2024 [2]. Revenue and Profit Trends - The company anticipates a decline in operating revenue from 2022 to 2024, primarily due to falling sales prices of its main products, but expects a recovery in revenue in the first half of 2025 as prices stabilize [1]. - The operating revenue for 2025 is projected to be 3.275 billion yuan for the first half, down from 4.438 billion yuan in 2024 [2]. Related Party Transactions - Zhenstone Co., Ltd. has significant related party transactions with China Jushi, with the amount of transactions constituting a high percentage of the company's operating costs, ranging from 60.42% to 70.49% over the reporting periods [3]. - The company has begun engaging third-party suppliers for glass fiber procurement, with plans for large-scale purchases from international suppliers starting in 2025 [4]. Bad Debt Provisions - The company has adjusted its bad debt provisions for accounts receivable from Zhongke YN, increasing the provision from 5% to 80% after the client was listed as a dishonest executor [5][10]. - The accounts receivable balance as of June 30, 2025, was 358.185 million yuan, with a bad debt provision of 286.548 million yuan at an 80% provision rate [7]. IPO and Fundraising - Zhenstone Co., Ltd. plans to raise approximately 3.981 billion yuan through its IPO, which will be allocated to various projects including the construction of glass fiber product production bases and a research and development center [10]. Dividend History - Prior to the IPO application, the company distributed significant cash dividends totaling approximately 1.14 billion yuan in 2022 and 2023 [11].