Doing business with competitors, letting his nephew be a supplier, the Guangdong boss born in the 1960s launches an IPO for Jingge New Materials

Article | Yema Finance Yang Guoguo

Editor | Liu Qinwen

When you pick up your phone and feel it getting hot after playing games for a long time, or when your electric vehicle continues to run stably after fast charging, it is all thanks to the silent contribution of thermal conductive materials. These materials are filled into polymer materials to rapidly conduct the heat generated by electronic components. Thermal conductive powder materials are like the “cooling guardians” of electronic devices.

Among them, Guangdong Jinge New Materials Co., Ltd. (hereinafter referred to as “Jinge New Materials”) is a deep cultivator in this industry. Its main products include thermal conductive powder materials, flame retardant powder materials, and wave-absorbing powder materials, with downstream applications covering high-growth sectors such as new energy vehicles, consumer electronics, 5G communications, and photovoltaic energy storage. Thermal conductive powder materials contribute nearly 70% of its revenue, serving as the core pillar of the company’s performance.

On February 19, 2025, Jinge New Materials was listed on the New Third Board, and the company is currently preparing for the Beijing Stock Exchange, with a major meeting on March 27.

01 Annual revenue exceeding 500 million, gross margin declining year by year

Thermal conductive powder materials belong to functional powder materials, a category that also includes flame retardant powder materials and wave-absorbing powder materials. Flame retardant powder materials serve as the “fire armor” for electronic appliances; wave-absorbing powder materials act as invisible “electromagnetic guardians,” absorbing stray electromagnetic waves in 5G communication devices and military stealth technologies to ensure signal quality and information security.

These are all main products of Jinge New Materials. From 2023 to 2025, Jinge New Materials’ operating income increased from 385 million yuan to 534 million yuan, while net profit attributable to the parent company rose from 41.29 million yuan to 57.48 million yuan. Although this seems to indicate a growth trend, several key indicators have raised red flags.

As the company’s largest source of revenue, thermal conductive powder materials contributed 359 million yuan in 2025, accounting for a high of 67.25%. In recent years, its sales volume increased from 18,100 tons in 2023 to 29,800 tons in 2025, and sales revenue rose from 269 million yuan to 359 million yuan, but the sales price has been on a downward trend, at 14,800 yuan/ton, 13,700 yuan/ton, and 12,000 yuan/ton from 2023 to 2025.

In addition, the other two major products, flame retardant powder materials and wave-absorbing powder materials, also saw a decline in sales prices, with the sales price of wave-absorbing powder dropping from 34,800 yuan/ton to 21,300 yuan/ton, a decrease of nearly 40%.

According to the prospectus estimates, if other conditions remain unchanged, a 5% decrease in the unit selling price of major products would lead to a revenue reduction of 19.23 million yuan, 23.37 million yuan, and 26.68 million yuan over three years, indicating that price fluctuations significantly impact performance.

The combination of declining prices and rising raw material costs has caused Jinge New Materials’ overall gross margin to drop from 25.28% in 2023 to 22.36% in 2025, marking a three-year decline.

While the price drop has indeed led to an increase in sales volume, it has also resulted in Jinge New Materials producing beyond its approved capacity. From 2022 to 2024, the overproduction rates were 37.61%, 38.86%, and 5.57%, respectively. It wasn’t until the year before the IPO in 2025 that the capacity utilization rate fell to 94.96% and the company completed its rectification.

Image source: “Inquiry Reply Letter”

What further worries investors is that the company’s financial situation is facing “double high” pressure. At the end of each reporting period, the book value of accounts receivable was 85 million yuan, 134 million yuan, and 128 million yuan, accounting for 29.88%, 41.9%, and 34.67% of current assets, respectively.

At the same time, the book value of inventory was 61.73 million yuan, 74.04 million yuan, and 85.17 million yuan, making up 21.6%, 23.2%, and 23.06% of current assets, respectively. Together, these two items accounted for over half of the current assets.

It is noteworthy that during the reporting period, Jinge New Materials recorded asset impairment losses of -1.6162 million yuan, -2.2908 million yuan, and -2.2221 million yuan, all attributed to inventory write-down losses. This indicates that the “double high” of accounts receivable and inventory not only occupies a significant amount of working capital but also increases the risk of future bad debts and write-downs.

02 Doing business with competitors, questioned about price fairness

The supply chain relationship of Jinge New Materials is another major point of interest and constitutes a significant part of its operational risks.

From 2023 to 2025, the company’s procurement amounts from its top five suppliers were 128 million yuan, 192 million yuan, and 208 million yuan, accounting for 46.77%, 51.83%, and 51.68% of total annual procurement, indicating a high concentration. Moreover, during the reporting period, the top five suppliers were quite stable, including Chalco New Materials, Lianrui New Materials, Luchang Chemical, Yufa Group, and Zexi New Materials.

Since the raw materials for the company’s products mainly consist of spherical alumina, alumina, and aluminum hydroxide, the upstream alumina market is dominated by major players like Chalco Group, resulting in high industry concentration. Thus, Jinge New Materials’ largest supplier, Chalco New Materials (a subsidiary of Chalco Group), is also a key supplier to its competitors Tianma New Materials and Yishitong. The company’s long-term procurement from them is consistent with industry norms, which is reasonable.

However, from 2022 to 2025, Lianrui New Materials, Zexi New Materials, and Baitu Co., Ltd. not only ranked among the top five suppliers but were also classified as major competitors by the company. Notably, from 2023 to 2025, the total procurement amount from Lianrui New Materials, Zexi New Materials, and Baitu Co., Ltd. accounted for as much as 91.4% of the total procurement during the reporting period.

Among them, Baitu Co., Ltd. was the company’s second-largest supplier in 2022 but dropped out of the top five suppliers in 2023.

During 2023 to 2025, Lianrui New Materials was not only the company’s second-largest supplier but also the largest supplier of spherical alumina, with procurement amounts of 26.34 million yuan, 54.41 million yuan, and 51.19 million yuan, showing a growing trend year by year.

Regarding the procurement prices from Lianrui New Materials and other suppliers, the company stated in the “Inquiry Reply Letter” that it “has applied for exemption from disclosure,” so we do not know the specific prices.

However, it is known that the procurement prices from Lianrui New Materials have continuously decreased over the reporting periods and are lower than those from other similar suppliers. This has drawn the attention of the Beijing Stock Exchange, which directly questioned the fairness of the procurement prices and whether there is any transfer of benefits.

Image source: “Inquiry Reply Letter”

In response, Jinge New Materials stated in the “Inquiry Reply Letter” that the company is the main customer of Lianrui New Materials’ spherical alumina products, and based on changes in procurement conditions and future cooperation expectations, the company sells at strategic partner prices in accordance with the framework agreement, leading to a decrease in procurement prices over the periods. There are no rebates between the company and its major suppliers.

Although the company explained that to ensure continuous stability in product quality, consistent performance indicators, and reliable delivery, it does not easily change core raw material suppliers that have been verified, the long-term reliance on competitors for raw materials undoubtedly adds complexity and risk to the supply chain.

03 The actual controller’s nephew is an “exclusive supplier,” many related parties “disappear” before the IPO

Behind Jinge New Materials’ push for the Beijing Stock Exchange stands a “monopolistic” leader—Huang Chaoliang.

Huang Chaoliang, born in August 1969, is from Guangdong and has a high school education. He started in the ceramics industry, becoming a sales manager at Sanshui Huali Ceramics in 1991, and the following year began serving as a person in charge or vice chairman at several companies in the Huaxing system. Over the past twenty years, he has worked at multiple companies including Jinge Fire Protection, Jinsui Freight, Weikede, and Sanshui Kaichao, accumulating experience from director, manager to supervisor. In 2012, he officially founded Jinge New Materials.

As of now, Huang Chaoliang directly and indirectly controls a total of 73.22% of the company’s shares and serves as chairman and general manager, forming an absolute controlling structure.

It is important to note that many of the company’s “directors, supervisors, and senior executives” hold multiple positions at various organizations, many of which are related parties to the company.

Image source: “Prospectus”

More concerning is that just before the company’s IPO, several related parties “collectively” deregistered.

For instance, Huang Chaoliang’s nephew Huang Yicong, along with his spouse Li Danhong, controlled Guangzhou Shengteng Trade Co., Ltd. (hereinafter referred to as “Shengteng Trade”) and Guangzhou Qianteng Trade Co., Ltd.; Liu Zhen, the director and deputy general manager, had a sister’s spouse, Long Zhijie, who once controlled Changshu Jiajin Textile Co., Ltd.; and director Zhou Songgan operated an individual business, the electronic commerce service department of Foshan City Chancheng District Junyue Le.

These companies were deregistered in April 2024, February 2022, January 2025, and November 2024 respectively, with deregistration dates being relatively concentrated.

Among them, Shengteng Trade was Jinge New Materials’ “exclusive” supplier, serving only Jinge New Materials. The cooperation began in October 2019 and ended in March 2023. Jinge New Materials primarily procured additives and auxiliary materials from Shengteng Trade, with procurement amounts of 667,700 yuan, 3,031,700 yuan, 5,914,200 yuan, 5,131,800 yuan, and 185,700 yuan from 2019 to 2023.

Image source: “Inquiry Reply Letter”

In this regard, the company explained that procuring through Shengteng Trade can achieve multiple confidentiality effects and is one of the technical confidentiality measures taken by the company. As the company’s development has matured, it has strengthened confidentiality management, and as the types of materials procured have expanded, the possibility of core components in the formula being leaked through a single supplier has gradually decreased. Therefore, the company has gradually ceased procurement dealings with Shengteng Trade.

In this move to the Beijing Stock Exchange, Jinge New Materials plans to raise approximately 205 million yuan, mainly for expansion, research and development, and to supplement working capital. Whether this funding can become the key leap for overcoming existing bottlenecks and achieving high-quality development remains to be seen. What are your thoughts on the story of Jinge New Materials? Feel free to leave your comments below for discussion.