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[Introduction] Yida Xinneng IPO terminated, no response in the first round of inquiries for nearly eight months

China Fund News reporter Nan Shen

A week later, another IPO project was terminated on the Shenzhen Stock Exchange, from a photovoltaic component company that was targeting the Growth Enterprise Market.Yida New Energy Technology Co., Ltd. (hereinafter referred to as Yida New Energy)。

On the evening of August 16, the Shenzhen Stock Exchange website was updated. Due to the withdrawal of the listing application by the sponsor of Yida New Energy, Guojin Securities, the Shenzhen Stock Exchange decided to terminate the company's listing review in accordance with relevant regulations. It is worth noting that the Shenzhen Stock Exchange's decision to terminate the listing review did not include any statement that the issuer (i.e. Yida New Energy) withdrew its listing application.

Yida Xinneng's listing application was accepted on December 29, 2023, and the first round of inquiries was received on January 24, 2024. In the face of the inquiries, the company and the sponsor did not choose to respond after nearly eight months of preparation, and the IPO was eventually terminated.

In the prospectus, Yida New Energy pointed out the risks of upstream and downstream price and demand fluctuations, industry overcapacity, and technological iteration. In addition, the company's debt-to-asset ratio is significantly higher than its peers, close to 90% for the three years of the reporting period, while the average level of comparable companies is around 72%.

During the reporting period, the prices of photovoltaic upstream and downstream fluctuated greatly

The prospectus shows that Yida New Energy is a multi-scenario photovoltaic application ecological solution provider led by the research and development, production and sales of high-efficiency photovoltaic cells and modules. According to statistics from Sobi Photovoltaic Network and International Energy Network/Photovoltaic Headlines, the company's domestic photovoltaic module bid scale ranked 7th and 6th in the industry in 2022 and 2023 respectively.

During the reporting period (2021 to 2023), the company's operating income was RMB 1.894 billion, RMB 8.606 billion and RMB 22.724 billion, respectively, and the net profit attributable to the parent company's owners was RMB -147 million, RMB 203 million and RMB 460 million, respectively, with a loss in 2021.

The company explained that in 2021, due to the periodic increase in silicon material prices, which led to an increase in silicon wafer prices, the company's raw material procurement price increase far exceeded the product sales price increase, resulting in a loss in 2021. Yida Xinneng pointed out that the company is in the middle of the industrial chain and is greatly affected by the fluctuations in upstream raw material prices and downstream demand adjustments, and faces the risk of performance fluctuations.

During the reporting period, the average sales price of the company's photovoltaic modules was RMB 1.64/W, RMB 1.73/W, and RMB 1.26/W, respectively, with year-on-year changes of 12.31%, 5.99%, and -27.19%, respectively; during the reporting period, the average unit price of silicon wafers purchased by the company was RMB 3.76/piece, RMB 5.87/piece, and RMB 2.83/piece, respectively, with year-on-year changes of 56.62%, 55.98%, and -51.72%, respectively.

Yida New Energy said that in recent years, the photovoltaic industry has experienced a period of overcapacity. Due to the combined effects of various factors such as the concentrated production of various links in the industrial chain in 2023 and the PERC battery capacity clearance cycle, the effective capacity of the photovoltaic industry is higher than the shipment volume. Intensified competition has led to price fluctuations in various links of the industrial chain, and the standard price of photovoltaic modules has gradually declined, which has had a negative impact on the company's operating performance.

The debt-to-asset ratio is nearly 90%

Significantly higher than the average of comparable companies

The debt repayment and liquidity risks of Yida New Energy cannot be ignored. The company said that the photovoltaic industry in which it is located is a capital-intensive industry that requires a large amount of continuous investment.

At the end of each period of the reporting period, the company's consolidated debt-to-asset ratio was 87.71%, 86.54% and 86.89% respectively, and the current ratio was 0.89 times, 0.98 times and 1.04 times respectively. Compared with companies in the same industry, the debt-to-asset ratio is higher and the current ratio is lower. During the reporting period, the average debt ratio of the six comparable companies selected by the company (JA Solar, JinkoSolar, Trina Solar, Risen Energy, Canadian Solar, GCL Integration) was around 72%.

Yida New Energy said that the company is still in a stage of rapid development and has a high demand for subsequent capital investment. If it cannot effectively expand its financing channels, fails to obtain financial support in a timely manner or its customer repayments are lower than expected, it will face debt repayment and liquidity risks, which will in turn have an adverse impact on its production and operations.

In addition, Yida New Energy's asset quality needs to be improved, with a high proportion of inventory and a fast growth rate. As of the end of 2021, the end of 2022 and the end of 2023, the book value of the company's inventory was 453 million yuan, 1.298 billion yuan and 2.843 billion yuan respectively. At the end of each period of the reporting period, the balance of the company's inventory impairment provision was 7.0211 million yuan, 33.7873 million yuan and 503 million yuan respectively.

Yida New Energy originally planned to raise 2.5 billion yuan in this IPO, of which 2 billion yuan will be used to build a 14GWN TOPCon high-efficiency monocrystalline battery project with an annual output, and 500 million yuan will be used to supplement working capital.

Editor: Captain

Review: Xu Wen

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