Regulatory warning not yet expired for half a year, Zhuzhou Kenen makes another IPO attempt.

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At the end of 2025, a regulatory warning revealed hidden aspects of the withdrawal of the IPO application by Zhuzhou Konnor New Materials Co., Ltd. (hereinafter "Zhuzhou Konnor").

This new materials company, which had submitted a STAR Market IPO application to the Shanghai Stock Exchange in June 2023 and withdrew the application two and a half years later, was named by the Shanghai Stock Exchange for issues such as inaccurate disclosure of R&D investment amounts and inaccurate disclosure of internal control-related information.

Subsequently, Zhuzhou Konnor and its related responsible persons all received regulatory warnings.

But this did not hinder Zhuzhou Konnor’s steps towards listing.

Within less than half a year, Zhuzhou Konnor once again stood at the doors of the STAR Market—recently, Zhuzhou Konnor submitted a STAR Market IPO application to the Shanghai Stock Exchange and received acceptance.

However, compared to the previous application, this time Zhuzhou Konnor is knocking on the IPO door again with higher revenue and profits, reduced R&D expenses, still unresolved performance commitment pressure, and a fundraising plan more likely to trigger discussion.

Zhuzhou Konnor’s main products include high-purity gallium, high-purity indium, and premium indium, ultimately used in scenarios such as 5G/6G and high-speed optical communications. In 2025, its revenue surpassed 1 billion yuan, and the net profit attributable to shareholders exceeded 100 million yuan in the same period.

It is worth mentioning that although Zhuzhou Konnor reduced the overall fundraising scale in this IPO, the amount allocated to working capital projects has "increased rather than decreased".

Zhuzhou Konnor plans to raise 560 million yuan, of which 100 million yuan will be used for working capital—an increase of 50 million yuan compared to the previous IPO.

Whether this fundraising plan can gain regulatory recognition is under close watch.

Urgent IPO

As early as June 2023, Zhuzhou Konnor submitted a STAR Market IPO application to the Shanghai Stock Exchange, but after two and a half years withdrew the application materials voluntarily.

A subsequent regulatory warning issued by the Shanghai Stock Exchange revealed another side to Zhuzhou Konnor’s previous IPO setback.

An on-site inspection found that Zhuzhou Konnor did not sufficiently justify including part of scrap losses and employee compensation in R&D costs. The R&D expenses to be deducted totaled 4.4117 million yuan, accounting for 5.19% of accumulated R&D investment from 2021 to 2023.

Ultimately, Zhuzhou Konnor, Chairman Zhao Kefeng, CFO He Fen, and Songhui Qing were given regulatory warnings.

Though less than half a year has passed since that regulatory warning, Zhuzhou Konnor has embarked on the IPO journey again.

Zhuzhou Konnor has always had a strong willingness to push the listing timetable forward.

In fact, even before the previous IPO filing, Zhuzhou Konnor had disagreements with its intermediary over the pace of listing application and replaced its sponsoring institution.

In March 2022, Zhuzhou Konnor signed a counseling agreement with China Merchants Securities and filed for counseling at the Hunan Securities Regulatory Bureau in April 2022. Less than a year later, in January 2023, the two sides terminated the counseling relationship.

Afterward, Zhuzhou Konnor hired Shenga Securities as its sponsor and launched a sprint for the STAR Market.

According to Zhuzhou Konnor, it originally planned to use June 30, 2022, as the benchmark date and achieve the IPO application by the end of 2022. But by the fourth quarter of 2022, China Merchants Securities still had not advanced the related application as planned, and the two sides could not agree on the listing schedule and board arrangements.

To promote the listing process as quickly as possible, Zhuzhou Konnor finally chose to change sponsors.

This quick re-filing within less than half a year after the regulatory warning also demonstrates Zhuzhou Konnor's sense of urgency about the capitalization process.

This urgency may also relate to the performance commitment pressure behind Zhuzhou Konnor.

The prospectus shows that in June 2022, Zhuzhou Konnor’s actual controller Zhao Kefeng, Tang Yan, and shareholders such as Jinshi Fund signed an investment agreement, promising that if the company fails to complete the IPO by December 31, 2026, special clauses such as share repurchase will be restored.

This made Zhuzhou Konnor's position become more delicate after withdrawing its previous IPO.

With the restart of the IPO, Zhao Kefeng and others have agreed with shareholders that the aforementioned special right clauses will continue to be invalid from October 31, 2025. However, if Zhuzhou Konnor’s IPO fails again, the special rights clauses will automatically be restored.

From this perspective, Zhuzhou Konnor's prompt resubmission after the regulatory warning is not merely about IPO timing—it is also about stabilizing external investors’ exit expectations.

The first step in restarting the IPO was to address the issues highlighted in the previous regulatory warning.

Before this IPO, Zhuzhou Konnor had already adjusted its R&D expenses.

In the latest accepted prospectus, Zhuzhou Konnor’s R&D expenses for 2023 and 2024 are 27.8892 million yuan and 29.7165 million yuan respectively, decreases of 640,900 yuan and 601,900 yuan compared to the previous application.

Moreover, the number of R&D personnel also changed slightly: as of the end of 2023, the number was 30, a decrease of 1 compared to the previous filing.

The simultaneous adjustment of R&D expenses and personnel essentially responds to previous issues.

Scissors Difference Windfall?

Compared with the previous application, performance growth has given Zhuzhou Konnor more confidence.

In 2025, Zhuzhou Konnor’s revenue reached 1.027 billion yuan, up over 30% year-on-year; net profit attributable to shareholders broke through 100 million yuan to 128 million yuan, up more than 80% year-on-year.

The direct driver for this performance growth was large orders from customer B.

In 2024, customer B contributed 54.4404 million yuan in revenue, accounting for 6.92%; but in 2025, this rose to 320 million yuan, soaring to 31.12% of Zhuzhou Konnor's revenue, making customer B its largest client.

That is, customer B alone contributed nearly one third of Zhuzhou Konnor’s revenue in 2025.

This pull effect may continue. Zhuzhou Konnor expects that the revenue share from such contracts will remain high in 2026, and have a major impact on operating results.

Besides customer orders, Zhuzhou Konnor's performance improvement over the past two years is also tied to catching the metal price up-cycle.

Since the end of 2023, confident in the market for indium and bismuth series products and with more orders on hand, Zhuzhou Konnor increased its raw material stock accordingly. Inventory reached 635 million yuan in 2024, doubling from the previous year.

In a price-upcycle, advance stocking amplified Zhuzhou Konnor’s profit flexibility.

In 2024, the market prices for indium ingots (In99995) and metallic gallium (Ga4N) were 2,304.2 yuan/kg and 2,044.12 yuan/kg respectively, up 48.43% and 26.39% compared to the previous year.

With subsequent new orders quoted at higher market prices, pre-purchased raw materials at lower prices gradually turned into cost advantages.

The time difference between warehouse intake and revenue recognition brought Zhuzhou Konnor the windfall of "low-cost inventory, high-price sales", directly pushing up gross margins.

In 2025, Zhuzhou Konnor’s gross margin reached 24.16%, up more than 7 percentage points from 2023.

However, alongside its marked performance improvement, Zhuzhou Konnor actually reduced the fundraising scale for this IPO.

In this IPO, Zhuzhou Konnor plans to raise 560 million yuan, a reduction of 28 million yuan compared with the previous application.

But while total fundraising was reduced, Zhuzhou Konnor actually increased the proportion for working capital.

For this IPO, Zhuzhou Konnor plans to allocate 100 million yuan for working capital, up 50% from the previous application, accounting for 17.86% of the total fundraising.

Notably, while using the IPO to supplement working capital, Zhuzhou Konnor still maintained a high level of cash dividends during the reporting period.

Between 2023 and 2025, Zhuzhou Konnor’s cumulative cash dividends reached 53.9736 million yuan, nearly a quarter of the net profit attributable to shareholders during the same period.

This makes Zhuzhou Konnor's capital arrangements appear delicate: on one hand increasing the IPO funds for working capital, on the other making generous dividend payments.

With improved book performance and ongoing cash dividends, yet raising the working capital portion through the IPO, the reasonable nature of the fundraising plan remains under regulatory scrutiny.

Risk warning and disclaimerThe market has risks; investments need caution. This article does not constitute individual investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of any individual user. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Invest accordingly at your own risk. ```