Jianbang High-Tech, the PV silver powder leader, makes another attempt at the Hong Kong Stock Exchange, with its low-margin predicament yet to be resolved

ZC has learnt that Jianbang High-Tech, a leading domestic supplier of photovoltaic silver powder, has recently resubmitted its application for a Main Board listing to the Hong Kong Stock Exchange, with CITIC Securities International acting as its sole sponsor. This marks the company's renewed attempt following the lapse of its initial application in May 2025.

Profitability Challenges Amidst Industry Glory

Industry research indicates Jianbang High-Tech holds significant market share in China's photovoltaic silver powder sector. From 2022 to 2024, the company ranked among the top three domestic producers for three consecutive years, securing first place in 2022 and 2023 before placing third in 2024, maintaining a market share between 9.8% and 10.1%.

Despite its prominent market position, Jianbang High-Tech exhibits weak profitability. Financial data reveals that while revenue grew from RMB 1.759 billion to RMB 3.95 billion between 2022 and 2024, profits increased only marginally from RMB 24.2 million to RMB 79.027 million over the same period. However, the company's gross profit margin has persistently hovered within the low range of 3.3% to 3.9%, with net profit margins merely reaching 1.4% to 2.2%. In the first eight months of 2025, the company's profits declined significantly to RMB 52.7 million, representing a year-on-year decrease of 32.1%.

Jianbang High-Tech's revenue is heavily reliant on silver powder products, which account for over 97% of its business. Prospectus materials indicate the company primarily adopts a pricing model based on adding a mark-up to the cost of silver nitrate, whose price is directly linked to the market price of silver. This pricing mechanism leaves the company's profit margins vulnerable to dual pressures from silver price fluctuations and intensifying industry competition.

Concurrently, the company exhibits significant customer concentration. During the reporting period, sales to the top five customers accounted for 84.4% to 95.4% of total revenue, with the two largest customers (Customer A and Juhe Materials) contributing 63.1% of revenue in 2024. Supplier concentration is similarly pronounced, with purchases from the top five suppliers exceeding 97.7% of total procurement expenditure.

The prospectus reveals that Jianbang High-Tech's operating cash flow has remained persistently negative, with a cumulative net outflow of approximately RMB 620 million over three years. Furthermore, the company's trade receivables and notes receivable reached RMB 175 million in 2024, equivalent to 2.2 times its profit for the same period. This indicates substantial capital tied up by customers and increased credit risk exposure.

Against this backdrop, Jianbang High-Tech plans to allocate part of the raised funds towards replenishing working capital and repaying bank loans.

Opportunities and Challenges on the Transformation Path

The photovoltaic silver powder industry faces multiple challenges. Data indicates that by the end of 2024, the utilisation rate of China's photovoltaic silver powder production facilities stood at merely 31.7%. Jianbang High-Tech's own capacity utilisation rates were 36.7% and 43.4% in 2023 and 2024 respectively, reflecting the industry's current state of overcapacity.

More critically, downstream photovoltaic cell technology is evolving towards ‘reduced silver’ and even ‘silver-free’ solutions. Heterojunction cells have widely adopted silver-coated copper powder, while TOPCon cell manufacturers also plan to introduce this material. Should alternative technologies like copper electroplating achieve large-scale adoption, silver powder demand could significantly contract.

In response to these challenges, Jianbang High-Tech's strategy includes intensifying R&D into silver powder for non-PV applications and alternative conductive materials. The company also plans to establish R&D bases in East Asia and construct new production facilities in the Middle East to expand its overseas market presence.

In its prior filing feedback, the Securities and Futures Commission expressed concerns regarding changes in Jianbang High-Tech's actual control and related matters. Specific points included the reasonableness of former actual controller Chen Jian's 2022 transfer of domestic entity equity to his son Chen Zichun without compensation, along with requests for clarification on whether Chen Jian and entities under his control have substantial overdue debts or major litigation, or whether they are classified as dishonest entities.

Jianbang High-Tech's successful listing on the Hong Kong stock market hinges not only on its operational performance but also on addressing regulatory scrutiny over these matters. Against the backdrop of intensifying global competition in the photovoltaic industry, this silver powder supplier's capital journey remains fraught with uncertainties.

Disclaimer: The content herein is for reference only and does not constitute any form of investment advice. Should any information contained herein prove inaccurate, incomplete, or potentially misleading, please refer to the company's official announcements. Market risks exist; investment requires caution.