Sai Ying Electronics' Settlement with Suppliers and Customers Involves Mutual Offset of Payments and Receipts
Sales Director May "Appear" on List of Patent Inventors

“Jinzhengyan” Southern Capital Center Suxin/Author Xizhou Songlan Yingwei/ Risk Control

On March 6, 2026, Jiangyin Saiying Electronics Co., Ltd. (hereinafter referred to as “Saiying Electronics”), which is planning to apply for listing on the Beijing Stock Exchange, released its 2025 annual report. In 2025, Saiying Electronics achieved operating revenue of 600 million yuan and net profit of 88 million yuan, representing year-over-year growth of 31.22% and 19.18%, respectively.

Looking at the longer timeline from 2023 to 2025, Saiying Electronics’ performance has maintained growth. Behind this growth, during 2023-2024, Saiying Electronics’ net profit growth was positive while industry peers’ average was negative. In the first three quarters of 2025, Saiying Electronics’ net profit growth was below the average of comparable companies. During 2023-2024, the gross profit margin of main business declined, but in the first half of 2025, it rebounded, due to factors such as falling product prices. Additionally, from 2022 to 2025, Saiying Electronics’ operating net cash flow has consistently been below net profit. On the other hand, during the reporting period, Saiying Electronics’ R&D investment ratio was below the industry average of comparable companies, with only one patent granted out of the patents applied for during the same period. Furthermore, the company’s sales director, production director, or inventors listed in patents include key personnel.

Regarding the listing, Saiying Electronics has been questioned twice about the authenticity of waste material sales. Research shows that in June 2023, Saiying Electronics changed its disposal method for scrap edges, and in the same year, its gross profit margin on scrap edges turned positive. During the reporting period, Ningbo Jintian Copper Industry (Group) Co., Ltd. (“Jintian Group”) was a major supplier and waste material customer of Saiying Electronics. Saiying Electronics disclosed that there were offsetting payments with Jintian Group, and there are doubts about the procurement amount from Jintian Group in 2024. Moreover, Saiying Electronics’ disclosures have been somewhat “trembling,” and it may have failed to disclose that it is listed as a key enterprise for mandatory clean production review.

1. Net profit trend may differ from peers, with operating cash flow persistently below net profit

During 2023-2024, Saiying Electronics’ net profit growth was positive while the industry average was negative, and in 2025, its net profit growth was below the industry average. One peer company affected by intensified competition in the new energy vehicle industry, falling product prices, and rising raw material costs experienced overall performance decline in 2024. Additionally, Saiying Electronics’ operating net cash flow has remained below net profit, turning negative in the first half of 2024 and 2025.

1.1 2023-2024 net profit trend differs from peers, with Huangshan Gujie citing product price drops and raw material costs as causes of decline

According to Saiying Electronics’ prospectus signed on January 5, 2026 (“January 5, 2026 Prospectus”) and the review report for January-September 2025, during 2022-2024 and Jan-Sept 2025, revenues were 219 million, 321 million, 457 million, and 438 million yuan, respectively; with YoY growth rates of 46.37%, 42.65%, and 38.43%. Net profits for these periods were 43.92 million, 55.07 million, 73.90 million, and 69.55 million yuan, with YoY growth of 25.38%, 34.2%, and 31.98%. In 2025, revenue was 600 million yuan with a YoY increase of 31.22%, and net profit was 88 million yuan with a YoY increase of 19.18%. Overall, performance has maintained growth from 2023 to 2025.

The comparable companies selected include Huangshan Gujie, Kunshan Guoli Electronic Technology, and Zhuhai Figo Technology. Their 2023-2024 and 2025 quarterly reports show that the average YoY revenue growth of these comparables was 15.49%, 11.26%, and 38.36%, with net profit YoY changes averaging -2.12%, -10.76%, and 39.29%. This indicates Saiying Electronics’ performance remained positive in net profit growth during 2023-2024, contrasting with the negative industry trend, but in the first nine months of 2025, its net profit growth was below the average of comparable companies.

During the reporting period, Saiying Electronics’ main products included ceramic tube shells and accessories, and packaging heat dissipation substrates. With long-term technological development and process accumulation, the company has formed a product structure centered on ceramic tube shells and heat dissipation substrates, providing key components for power semiconductor devices such as thyristors, IGBTs, and IGCTs, used in ultra-high voltage transmission, new energy power generation, industrial control, new energy vehicles, intelligent computing centers, and rail transit. The company states that its main domestic competitors in heat dissipation substrates include Huangshan Gujie and others.

According to the “Inquiry Letter Response” dated September 17, 2025, Saiying Electronics states that its product types are only directly comparable to Huangshan Gujie, with some differences compared to Figo Technology and Guoli Electronics.

In this context, the performance of comparable companies is worth noting. Guoli Electronics’ 2023 annual report shows a 32.59% decline in net profit attributable to shareholders, mainly due to longer delivery and verification cycles in aerospace and semiconductor projects, leading to delays in orders and deliveries; increased competition in the new energy vehicle sector has also reduced gross profit margins and profitability. Huangshan Gujie’s 2024 annual report indicates that due to falling product prices and rising raw materials, its gross profit margin on power semiconductor module heat dissipation substrates declined, leading to overall performance decline.

In summary, Saiying Electronics’ performance from 2023 to 2025 has been steadily growing, with positive net profit growth in 2023-2024, but in the first nine months of 2025, its net profit growth lagged behind the industry average. Its gross profit margin declined during 2023-2024 and rebounded in the first half of 2025, mainly due to product price drops. Operating cash flow has been persistently below net profit, turning negative in early 2024 and 2025.

1.2 2023-2024 main business gross profit margin declined, affected by product price drops

Main products include ceramic tube shells and accessories, and packaging heat dissipation substrates. According to the response on September 17, 2025, during 2022-2024 and Jan-June 2025, gross profit margins were 33.02%, 31.36%, 30.09%, and 31.53%. The decline in gross profit margin was mainly due to delayed projects in some power transmission and transformation, lower demand for ceramic tube shells and accessories, and negotiated price reductions with major customers, leading to a 5.43% decrease compared to 2022. In the first half of 2025, increased demand from ultra-high voltage projects and higher sales of high-margin products improved gross profit margins.

For heat dissipation substrates, the company states that in 2023, due to effective market expansion, rising demand from existing high-quality customers, and scale effects, gross profit margin increased by 6.51 percentage points. However, in 2024 and the first half of 2025, rising raw material prices (such as copper) and negotiated price reductions caused gross profit margin to decrease by 4.21% and 2.06%, respectively.

Thus, gross profit margins declined in 2023-2024 and partially recovered in the first half of 2025, mainly due to product price fluctuations.

Regarding accounts receivable, as of January 5, 2026, the total accounts receivable (including notes receivable, accounts receivable, and financing receivables) at the end of each period from 2022 to June 2025 were approximately 97 million, 114 million, 185 million, and 232 million yuan, accounting for 44.46%, 35.43%, 40.55%, and 80.45% of operating income, respectively. This indicates receivables have remained around 35-45% of revenue.

Net profits during these periods were 44 million, 55 million, 74 million, and 44 million yuan. Meanwhile, net cash flows from operating activities were 23.70 million, 17.20 million, -7.72 million, and -7.49 million yuan, showing negative cash flow in early 2024 and 2025.

During listing and application, Saiying Electronics was questioned about negative operating cash flow. In the reply dated January 27, 2025, the company explained that the negative cash flow in 2022-2023 and the first half of 2024 was mainly due to receivables from customers still within credit periods, and the short credit periods of major raw materials like copper, which are shorter than customer credit periods.

Additionally, for the reasons of negative cash flow in 2024, the company stated that granting credit to major customers and some bill payments, along with short credit periods for suppliers (mostly wire transfers), and the growth of business scale, resulted in a cash gap.

In the 2025 annual report, net profit was 88 million yuan, while operating cash flow was about 26.55 million yuan. As of the end of 2025, accounts receivable were approximately 229.78 million yuan, accounting for 38.3% of revenue.

In summary, from 2022 to 2025, Saiying Electronics’ performance has been steadily growing, with net profit growth positive in 2023-2024, but lagging behind industry peers in 2025. Gross profit margins declined in 2023-2024, rebounded in early 2025, and operating cash flow remained below net profit, turning negative in early 2024 and 2025.

2. R&D investment low in recent three years, with only one patent granted, and key personnel involved in patents

In the past three years, Saiying Electronics’ R&D investment ratio was below the industry average. During the reporting period, the company invested a total of 18.3246 million yuan in five ongoing projects, with only one patent granted during the same period. Notably, the sales director Zhu Min and production director Guo Xinwei are listed as inventors on some patents, possibly including core technology patents.

2.1 R&D investment ratio below industry average during 2022-2024 and first half of 2025

According to the January 5, 2026 Prospectus, during 2022-2024 and Jan-June 2025, R&D expenditure as a percentage of revenue was 3.8%, 3.21%, 3.16%, and 3.78%. The industry comparables’ average ratios were 5.49%, 5.74%, 6.42%, and 4.51%, respectively. This shows Saiying Electronics’ R&D ratio was consistently below the industry average.

It is worth noting that only one invention patent was granted during the reporting period, which was applied for within the period.

2.2 Over 10 million yuan invested in five projects, with only one patent granted

As of June 30, 2025, the company disclosed five major ongoing projects with R&D investments of 5.2626 million, 5.608 million, 2.869 million, 2.458 million, and 2.126 million yuan. The total R&D investment in these projects from 2022 to mid-2025 was approximately 18.3246 million yuan.

The company has obtained 9 invention patents as of June 30, 2025, with application dates ranging from 2011 to 2023. Only one patent was granted during the reporting period (2022-2024 and first half of 2025).

The company also applied for 7 invention patents during 2022-2024 and early 2025, with application dates from September 2022 to April 2025.

2.3 Key personnel involved in patents include sales and production directors, with some patents possibly related to core technology

According to the inquiry reply on January 27, 2025, the company implemented equity incentives in November 2023, when Zhu Min was the sales director. As of December 1, 2025, Zhu Min remained the sales director. The State Intellectual Property Office shows that as of March 11, 2026, “Zhu Min” is listed as an inventor on five authorized utility model patents, with application dates from December 2020 to October 2024.

Similarly, Guo Xinwei has served as production director since December 2015. As of March 11, 2026, “Guo Xinwei” is listed as an inventor on 17 patent applications filed between 2020 and 2025, including some related to core technology such as “Automatic detection and packaging system for IGBT substrates” and “Feeding mechanism for IGBT substrate detection.”

This indicates that key personnel involved in patents include sales and production directors, and some patents may involve core technology.

3. Disposal of scrap edges changed to direct sale in the same year gross profit turned positive; procurement and sale of copper scrap raise questions

The “Opinions on Strengthening Supervision of Listed Companies” emphasizes improving transparency and strengthening information collection on related parties. Since June 2023, Saiying Electronics changed its main disposal method for scrap edges from entrusted processing to direct sale. In the same year, gross profit margin on scrap edges turned positive. During the period, Jintian Group was a major supplier and customer for waste materials. The company disclosed offsetting payments with Jintian Group and that in 2024, over 99% of procurement from Jintian Group was through entrusted processing.

3.1 From June 2023, scrap disposal method shifted to direct sale, gross profit margin turned positive

According to the Prospectus, during 2022-2024 and first half of 2025, revenue from scrap edges was approximately 615,600, 18.117 million, 44.866 million, and 32.607 million yuan, respectively, showing increasing trend.

The company’s “scrap handling” shows that in 2022-2024 and first half of 2025, entrusted processing of scrap edges accounted for 97.35%, 40.52%, 16.28%, and 11.17% of total scrap, while direct sales accounted for 2.65%, 59.48%, 83.72%, and 88.83%. Entrusted processing involves outsourcing scrap to copper manufacturers for processing into raw copper materials.

Since June 2023, the main disposal method shifted to direct sale to copper processors. The company explains that due to changes in product structure, increased revenue from packaging heat dissipation substrates, and differences in copper types, entrusted processing causes delays in copper inventory. Direct sale allows timely replenishment of raw materials and improves operational flexibility, facilitating faster capital recovery. Correspondingly, gross profit margin on scrap edges turned positive in that year.

From the Prospectus, during 2022-2024 and first half of 2025, gross profit margins on scrap edges were -2.56%, 0.91%, 2.3%, and 1.35%.

The company also simulated the impact of switching from entrusted processing to direct sale on revenue and costs, showing that the proportion of scrap revenue in total increased compared to actual figures, and costs also increased accordingly.

3.2 Procurement of copper from Jintian Group and sale of copper scrap raise disclosure doubts

In 2024 and the first half of 2025, Jintian Group was the fifth-largest customer and a major supplier, with sales of 20.93 million and 11.89 million yuan, accounting for 4.58% and 4.12% of revenue. From 2022 to 2024 and first half of 2025, Jintian Group was the third or first largest supplier, with procurement amounts of 20.48 million, 107.83 million, 161.31 million, and 87.11 million yuan, accounting for 13.85%, 48.42%, 47.28%, and 42.53% of procurement.

However, the company disclosed that during the period, there was an accounting correction involving reclassification of receivables and inventory impairment. The correction did not impact total assets, revenue, or net profit, but adjusted certain expense items. The procurement amount from Jintian Group in 2024 was 161.23 million yuan, representing 47.26% of total procurement, which conflicts with the earlier disclosure of 8.71 million yuan, raising doubts.

In essence, the company procures copper from Jintian Group and sells copper scrap produced during manufacturing, with the scrap serving as raw material for Jintian Group.

3.3 Settlement offset with Jintian Group, with 3.9947 million yuan offset in 2023

The company states that it has offset receivables and payables with Jintian Group for convenience. In 2023, the offset amount was 3.9947 million yuan. The company claims that selling copper scrap and promptly recognizing receivables and income is reasonable, and that offsetting payments is convenient. The company also retains some entrusted processing arrangements with Jintian Group.

3.4 Entrusted processing of scrap edges persists due to long lead times and customer requirements

In the second inquiry reply on December 1, 2024, the company explained that due to long lead times for certain copper materials and the need for continuous inventory, entrusted processing remains necessary for some copper types, such as C1100, at the request of Jintian Group to maintain long-term stable transactions and strategic partnership.

In 2024 and the first half of 2025, entrusted processing of scrap accounted for over 99% of procurement from Jintian Group. The company states that this arrangement is to meet customer demands and does not affect production timeliness.

Summary: Since June 2023, Saiying Electronics shifted its scrap disposal from entrusted processing to direct sale, with gross profit turning positive. The company’s main supplier and waste material customer is Jintian Group, but there are discrepancies in procurement disclosures, and the relationship involves offsetting payments. Entrusted processing continues for some copper types due to long lead times and customer demands, with over 99% of procurement from Jintian Group being entrusted.

4. Frequent “trembling” disclosures, listed as key enterprise for mandatory clean production review, possibly undisclosed

The CSRC emphasizes that the issuer is responsible for truthful, accurate, and complete disclosures. Saiying Electronics’ application documents for listing on the New Third Board and Beijing Stock Exchange contain multiple “trembling” disclosures. In 2025, it was listed as a key enterprise for mandatory clean production review, but this may not have been disclosed in the prospectus. Both sponsorship institutions—Dongwu Securities—have had issues; in 2023, Dongwu Securities’ sponsor representative was verbally warned for disclosure violations.

4.1 Discrepancies in client information tables and shareholder disclosures

The September 17, 2025 inquiry reply shows that in the table titled “Customer Basic Information, Contract Period, and Related Parties,” the header is “Supplier Name,” indicating possible mislabeling or misdisclosure.

Further, the January 27, 2025 inquiry reply discloses that in 2021, Saiying Electronics’ first capital increase involved shareholders including Chen Guoxian, Qin Jing, Jiangyin Saiying Investment Management Partnership, Chen Beilu, Chen Qiang, Yu Yaping, Guo Xinwei, Geng Jianbiao, Zhang Feng, and others, with an increase price of 1 yuan per share, based on proportional increase. However, the “Share Capital Evolution” document shows only nine shareholders, missing “Xu Hongwei,” indicating a discrepancy.

Additionally, both the 2021 and 2024 capital increases are referred to as “the first capital increase,” which is inconsistent.

4.2 Repeatedly calling two capital increases “the first,” or mislabeling shareholder names

The company states that it had two capital increases in November 2021 and November 2024 but refers to both as “the first capital increase,” which is inaccurate. Also, the shareholder name for the 2024 increase may be misrepresented, with “Jiangyin Lian Tuo” possibly replacing “Jiangyin Jintou.”

4.3 Listed as a key enterprise for clean production review in Jiangyin in 2025, but not disclosed in listing application

According to the Jiangyin Ecology and Environment Bureau’s list published on March 19, 2025, Saiying Electronics is included as a key enterprise for clean production review in 2025. The law on clean production mandates that companies exceeding emission standards or exceeding total pollutant control targets must undergo mandatory review, which should be disclosed if applicable.

The “Environmental Information Disclosure Guidelines” for listed companies recommend disclosing whether the company is a key pollutant discharge unit or subject to clean production review. However, the company may not have disclosed this in its listing documents.

4.4 Sponsoring securities firm Dongwu Securities, which in 2023 was warned for disclosure violations

Dongwu Securities, the sponsor for Saiying Electronics’ multiple listings, was verbally warned by the Beijing Stock Exchange in January 2023 for disclosure violations. Past filings also contained errors, such as punctuation and formatting issues, which required re-examination.

In summary, Saiying Electronics’ disclosure documents contain multiple “trembling” errors, and it may have failed to disclose key environmental review status. The sponsor, Dongwu Securities, has a history of regulatory issues.

5. Conclusion

Overall, from 2023 to 2025, Saiying Electronics’ performance has been steadily growing, with net profit trends in 2023-2024 differing from industry peers, and in 2025 lagging behind. Its operating cash flow has been persistently below net profit, turning negative in early 2024 and 2025. R&D investment ratios are below industry averages, with only one patent granted, and key personnel involved in patents include sales and production directors, some of whom are involved in core technology patents.

The company’s disclosures contain multiple “trembling” errors, and it is listed as a key enterprise for clean production review, possibly undisclosed. Since June 2023, it shifted scrap edge disposal from entrusted processing to direct sale, with gross profit turning positive. It procures copper from Jintian Group and sells copper scrap, but there are discrepancies in procurement disclosures, and entrusted processing persists for some copper types due to long lead times and customer demands, with over 99% of procurement from Jintian Group being entrusted.

In summary, Saiying Electronics’ performance, disclosure quality, environmental compliance, and related-party transactions warrant close attention in the listing process.