Performance stagnation meets payment collection difficulties: How likely is Yongda Co.'s success in its second review at the Beijing Stock Exchange?

On April 10, the Beijing Stock Exchange will review the listing of Jiangsu Yongda Chemical Machinery Co., Ltd. (hereinafter referred to as "Yongda Shares").

This is not Yongda Shares’ first time being reviewed.

As early as November 2025, Yongda Shares was reviewed by the Listing Committee of the Beijing Stock Exchange, but was ultimately deferred due to internal control issues associated with its photovoltaic business.

Before this second review, Yongda Shares underwent sweeping reforms.

On one hand, faced with outstanding payments, Yongda Shares reached settlements with some clients such as Xinjiang Hesheng Silicon Industry, recovering receivables at discounted prices;

On the other hand, Yongda Shares has committed to fundamentally clearing out its photovoltaic business by 2026.

Although this has cleared some obvious short-term obstacles, some problems remain unresolved.

Looking at fundamentals, Yongda Shares’ performance has stagnated in recent years. In 2025, revenue and net profit attributable to shareholders were 727 million yuan and 109 million yuan respectively, with revenue declining by more than 10% year-on-year.

Moreover, overdue accounts receivable accounted for about 70% from 2023 to 2025. This persistently high overdue rate, combined with frequent lawsuits against major clients to collect debts, exposes Yongda Shares’ lack of bargaining power when facing dominant downstream customers.

For this listing, Yongda Shares plans to raise 458 million yuan for the construction of a heavy chemical equipment production base.

Against the backdrop of pressured fundamentals and persistent receivables problems, whether Yongda Shares can successfully enter the doors of the Beijing Stock Exchange is under close market scrutiny.

Clearing Out Photovoltaic Business

Yongda Shares’ core products are pressure vessels, key equipment for conducting various physical and chemical reactions, used in chemical, photovoltaic, and other industries.

The basic chemical division supports about half of Yongda Shares’ revenue, making it the main source. However, this base suffered a heavy blow in 2025, with segment revenue dropping sharply from 464 million and 466 million yuan over the past two years to 349 million yuan, shrinking over 25% year-on-year in 2025.

This drag resulted in an over 10% decline in overall revenue for Yongda Shares in 2025.

In sharp contrast to the weakness in the basic chemical main business, the photovoltaic division rose rapidly, becoming the fast-growing segment of Yongda Shares in recent years.

From 2023 to 2025, the photovoltaic segment generated 26 million, 156 million, and 181 million yuan in revenue, with its revenue share surging from just 3.62% to 25.25%.

However, the surging revenue figures of the photovoltaic division are dramatically juxtaposed against the current harsh reality of the industry.

At present, the photovoltaic sector is undergoing a brutal phase-out of surplus production capacity: even the most resilient leading enterprises struggle to avoid losses. For example, TCL Zhonghuan reported a staggering loss of over 9 billion yuan in 2025.

Facing the rationality issue of "counter-cyclical growth," Yongda Shares claims to adhere to a "not picky about sectors, only follows benchmarks" customer acquisition logic.

According to Yongda Shares, after obtaining project information, their core strategy is to prioritize bidding for benchmark projects of industry-leading enterprises, with no strong preference for specific application fields.

In other words, the growth in photovoltaic business is more a result of "going with the flow" in seizing major customer orders, rather than a strategic shift towards photovoltaics.

But this "not picky about sectors, only follows benchmarks" strategy, given that even photovoltaic leaders are mired in huge losses, clearly faces uncertainties about its future performance conversion.

This was the main reason why Yongda Shares’ listing review in November 2025 was deferred.

"Please sponsor agencies and reporting accountants further review the issuer's internal control measures for photovoltaic project sales, their rationality and effectiveness of implementation, adequacy of revenue recognition basis, recoverability of accounts receivable, and whether there might be a significant adverse impact on business performance," pointed out the Beijing Stock Exchange Listing Committee.

To clear listing obstacles, Yongda Shares resorted to drastic measures—willingly contracting its photovoltaic business and emphasizing that it will fundamentally clear out the segment by 2026.

Based on current order production progress, Yongda Shares expects photovoltaic business revenue in 2026 to be just 7 million yuan, while non-photovoltaic business revenue will be between 708 million and 750 million yuan.

"The impact of photovoltaic performance on 2026 overall results is extremely low," Yongda Shares claimed. "The performance growth in non-photovoltaic orders can offset the decline in photovoltaic performance."

From the previous "riding the wave" to today's "proactively zeroing out," Yongda Shares’ 180-degree turn toward its photovoltaic business indeed adds a safety chip to its second listing review, but whether "non-photovoltaic orders in hand" can truly support 2026 results still remains to be seen.

Debt Collection Tug-of-War

Compared to the decline in performance, what worries the market more may be Yongda Shares’ receivables issue.

As of the end of 2025, Yongda Shares’ accounts receivable had a book value of 244 million yuan, accounting for 33.58% of its revenue.

This is similar to peers, for example, at the same period, comparable company Kexin Electromechanical's accounts receivable ratio was 39.29%.

For a chemical sector equipment manufacturer, having sizable receivables on the balance sheet may be an industry norm under the B2B model. However, Yongda Shares’ key issue is the health of these receivables: large-scale, chronic overdue.

According to agreements, Yongda Shares typically grants clients a credit period of 30 to 90 days at various equipment delivery nodes, but this clause is almost nominal.

From 2023 to 2025, the proportion of Yongda Shares’ accounts receivable overdue beyond the credit period reached 68.67%, 79.78%, and 73.6% respectively.

Yongda Shares explained that this is mainly because downstream clients are large groups in basic chemicals, oil refining/petrochemicals, coal chemicals, and photovoltaics, dominating negotiations. Clients settle payments based on project progress and lengthy approval cycles, causing slow and overdue payments.

This means that Yongda Shares lacks bargaining power in front of strong downstream clients, directly leading to frequent failures of its internal collection mechanisms.

Although Yongda Shares has set up a standard "stepwise collection" system internally—first sending collection letters, then lawyer's letters after three months of non-response, and finally litigation—in reality, these standard steps often have little effect, especially with major downstream clients having cash flow difficulties.

To prevent paper wealth from becoming bad debt, Yongda Shares has had to frequently resort to litigation, forced execution, even "cutting prices for cash" to recover funds.

For example, photovoltaic client Inner Mongolia Yuexin Silicon Material (formerly Runyang Yueda, hereafter "Yuexin Silicon") defaulted over 35 million yuan of payments; Yongda Shares sued them in August 2024.

Even after civil mediation, Yuexin Silicon still defaulted and refused payment.

In January 2025, Yongda Shares had to apply to the court for forced execution, which so far remains unresolved.

A similar tug-of-war occurred in the traditional chemicals sector.

In 2023 and 2024, Yongda Shares sued Henan Longyu Coal Chemical twice, reached mediation, but the latter repeatedly defaulted until March last year, when both sides reconciled again with a payment agreement to settle the 9.23 million yuan debt in installments by June 2026.

Another client, Anhui Weibao Chemical, following mediation defaults, was subject to forced execution requested by Yongda Shares, currently still in asset investigation phase.

Furthermore, Yongda Shares sometimes had to swallow the bitter pill of "discounts for cash."

Due to large receivable backlogs caused by photovoltaic sector volatility, to accelerate fund recovery, Yongda Shares conceded to Xinjiang Hesheng Silicon Industry.

In November 2025, Yongda Shares signed a reconciliation agreement for installment repayment with Hesheng, and to ensure full payment, signed a supplemental agreement in March 2026 agreeing to a direct discount on the receivable.

From lengthy judicial enforcement to discounted collection, Yongda Shares’ tough "debt collection chronicles" are a true reflection of its high accounts receivable risk and weak industry chain position.

In such a collection environment full of games and compromises, the gold content of Yongda Shares' performance certainly needs to be reassessed.

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