Core Viewpoint - Jiangsu Riyu Photovoltaic New Materials Co., Ltd. (Riyu Photovoltaic) has recognized the risks associated with high customer concentration as it submits its IPO application to the Hong Kong Stock Exchange [1][4]. Group 1: Company Overview - Riyu Photovoltaic specializes in the production of photovoltaic silver paste, a key raw material for solar cell manufacturing, which directly impacts the efficiency and output power of photovoltaic modules [1]. - The company’s silver paste products include those for TOPCon, xBC, and PERC solar cells [1]. Group 2: Financial Performance - The company has experienced rapid growth in revenue and profit over the past three years, with total revenues of CNY 393 million, CNY 1.594 billion, and CNY 2.285 billion for 2022, 2023, and 2024 respectively, reflecting a compound annual growth rate (CAGR) of 141.3% [1]. - Profits for the same years were CNY 900,000, CNY 59.7 million, and CNY 92.2 million, with a CAGR of 925.6% [1]. Group 3: Market Position - According to a report by Zhaoshang Consulting, Riyu Photovoltaic is projected to rank first among the top five global photovoltaic silver paste manufacturers by revenue in 2024, and fourth by both revenue and volume in the global photovoltaic silver paste industry [2]. Group 4: Raw Material Costs - The company’s raw material costs, which include silver powder, glass powder, and organic materials, accounted for over 90% of its sales costs, with costs of CNY 345 million, CNY 1.382 billion, and CNY 2.018 billion for 2022, 2023, and 2024 respectively [2]. - The raw material costs represented 97.2%, 97.7%, and 97.3% of total sales costs for the respective years [2]. Group 5: Customer Concentration Risk - Riyu Photovoltaic's top five customers contributed approximately CNY 392 million, CNY 1.541 billion, and CNY 1.708 billion in revenue for 2022, 2023, and 2024, accounting for about 99.8%, 96.7%, and 74.8% of total revenue [2]. - Notably, revenue from Customer A was particularly significant, contributing CNY 219 million, CNY 1.115 billion, and CNY 1.071 billion for the same years, representing approximately 55.9%, 70.0%, and 46.9% of total revenue respectively [3]. Group 6: Industry Context - The photovoltaic and lithium battery sectors are currently undergoing a phase of rapid capacity expansion followed by adjustment, leading to significant declines in performance and increased challenges for IPOs in the A-share market [4]. - Many companies, including Riyu Photovoltaic, are seeking to list in Hong Kong due to the relatively lenient profitability requirements, which provide a crucial avenue for alleviating financial pressures amid industry challenges [4].