The production expansion was too drastic, the 500 million convertible bonds could not be transferred, and the actual controller of the 300 million fixed increase was questioned by the actual controller.
Jingxing Zhiyu
2026.11.11 19:43
· From Beijing
Full text 3152 words
On the evening of November 10, Jushun (605166.SH) disclosed the review inquiry reply and prospectus (draft application) for the 300 million yuan fixed increase. The company plans to raise no more than 300 million yuan from Yongchang Holdings and Hainan Yongchang controlled by the actual controller Fu Changbao. The two companies will subscribe in full in cash and fully replenish working capital after deducting issuance expenses. The Shanghai Stock Exchange required an explanation of the source of subscription funds and repayment arrangements, and asked about the company's decline in performance, the reasons for the lower-than-expected benefits of previous fundraising projects, and whether there is a risk of further decline in performance after the new project is put into production.
With main business profits shrinking, this fixed increase can alleviate liquidity pressure, but it is difficult to cover all the funding gaps calculated by the company. The company estimates that the gap is 665 million yuan, and only 45% can be covered by raising funds; investment in production expansion is still there, and there is potential cash repayment pressure on the two convertible bonds. Moreover, no more than 70% of the subscription money is expected to come from bank loans, and the rest includes loans from family shareholders. While the listed company receives supplementary funds, the subscriber will also bear debt repayment pressure, and its subsequent sources of repayment will also include dividends from the listed company.
The actual controller subscribes in full
This is the fourth financing for Jushun in six years since its listing. The previous IPO and two rounds of convertible bonds raised a total of 1.098 billion yuan. If 300 million yuan is raised this time, the cumulative financing amount will be close to 1.4 billion yuan.
The number of shares issued this time shall not exceed 31.4734 million shares, which shall not exceed 10% of the total share capital before the issuance. The issuance price shall not be lower than 80% of the average stock trading price in the 20 trading days before the first day of the issuance period. Calculated based on the upper limit of the number of issuances, the voting rights controlled by Fu Changbao and his concerted parties will increase from 31.98% to 38.16%.
In response to inquiries about the stock sales restriction arrangement, the company stated that the new shares subscribed this time will be locked for 36 months, and the shares already held by Fu Changbao, Yongchang Holdings and Hainan Yongchang before the issuance will also be locked for 18 months from the date of completion of the issuance, except for transfers between entities controlled by the same actual controller.
The main business of both subscribers is the trading of electrolytic copper and other products. In 2025, the net profits of Yongchang Holdings and Hainan Yongchang will be 21.5288 million yuan and 89.471 million yuan respectively. As of the end of June 2026, the net assets of Yongchang Holdings and Hainan Yongchang were approximately 117 million yuan and 250 million yuan respectively, and the net profits in the first half of the year were approximately 1.47 million yuan and 2.51 million yuan respectively.
The source of subscription funds and repayment arrangements are another focus of this inquiry. According to the inquiry response, no more than 70% of the subscription funds will be self-raised through bank loans, and the remainder will be "self-owned funds." However, in addition to operating accumulation over the years, the self-owned funds under this standard also include shareholder loans provided by the Fu Changbao family and other companies controlled by the Fu Changbao family and other companies controlled by them. Related companies do not include listed companies.
Hainan Yongchang has obtained a 250 million yuan loan with a term of 5 years from Minsheng Bank Yueqing Branch. Yongchang Holdings provides a full joint liability guarantee and Fu Changbao provides a personal unlimited joint liability guarantee. The loan amount does not exceed 70% of the total transaction price. Based on a total subscription of 300 million yuan, the upper limit of bank financing used for subscription is 210 million yuan.
The loan is scheduled to be repaid in installments within a five-year credit period. The sources of funds include the subscriber's own operating accumulation, available cash dividends from listed companies, and funds obtained from the compliance reduction of shares after the expiration of the lock-in period. In its reply, the company believes that the operating income of the two subscribers in 2025 can support the installment repayment. The reply also mentioned that the listed company’s cumulative cash dividends in the past three years were approximately 163 million yuan, which is the total amount of dividends distributed to all shareholders.
The subscriber's loan repayment arrangement includes dividends from listed companies, and Jushun's operating performance is therefore also related to part of its repayment sources. PolyShun itself is facing the pressure of declining profits and subsequent capital needs.
Main business profits shrink, and demand for production expansion and debt repayment remains
In fact, the company has a lot of money on its books, but it doesn't really have that much to spend. As of the end of June 2026, the company's monetary funds were 2.342 billion yuan, of which approximately 974 million yuan was restricted due to bill margin and other reasons. After being included in trading financial assets and deducting restricted funds and the balance of previous fundraising, the freely disposable funds were approximately 1.383 billion yuan. The minimum cash holdings, debt repayment, project investment and dividends in the next three years and other funding requirements total approximately 2.049 billion yuan, and the company calculates a gap of 665 million yuan based on this.
From a business perspective, Polyshun is mainly engaged in the research and development, production and sales of nylon materials. Its core product, nylon 6, is sliced in the shape of white rice grains, commonly known as "industrial rice" in the industry. It is mainly used for downstream production of nylon fibers, engineering plastics and films, and is used in clothing, electronic appliances, food packaging and other fields. The company purchases caprolactam from outside for processing, and the settlement price for annual supply is usually determined based on the price of raw materials plus the agreed processing fee. The level of processing fees and the scale of production and sales therefore directly affect profitability.
The Shanghai Stock Exchange requires companies to explain the reasons for changes in revenue, gross profit margin and net profit based on industry cycles, supply and demand conditions and product pricing mechanisms. The company stated in its reply that from 2024 to 2025, the cumulative new production capacity of domestic nylon 6 chips will exceed 2 million tons, and supply expansion is faster than the growth of downstream demand. PolyShun's capacity utilization rate dropped from 98.76% in 2025 to 70.85% in the first half of 2026, and product sales in the first half of 2026 dropped by 17.05% year-on-year. In addition to pressure on processing fees, insufficient construction has also raised unit fixed costs.
The company's profits fell further due to declining sales, pressure on processing fees and rising unit fixed costs, coupled with reduced subsidies, interest and other income. In 2025, the company's net profit attributable to the parent company was 145 million yuan, a year-on-year decrease of 51.77%; in the first three quarters of 2026, the company's net profit attributable to the parent company was 64.4034 million yuan, a year-on-year decrease of 53.87%, of which the third quarter was only 1.4024 million yuan, a year-on-year decrease of 95.16%. Cash flow has also changed. The net cash flow from operating activities in the first three quarters was -127 million yuan, compared with a net inflow of 96.4704 million yuan in the same period last year.
Returns from previous fundraising projects are also declining, and the Shanghai Stock Exchange requires companies to explain why their returns are less than expected. The polyamide 6 project with an annual output of 180,000 tons invested in convertible bond financing in 2022 will achieve benefits of approximately 106 million yuan in 2024, which will drop to 38.8702 million yuan in 2025 and 13.924 million yuan in the first half of 2026. The project's original estimated annual net profit of 71.1579 million yuan when it reaches full capacity is lower than this level. The actual benefits in 2025 and the annualized calculation of benefits in the first half of 2026 are both lower than this level. In its reply, the company attributed the difference to the concentrated release of industry production capacity, weakening processing fees, and slowdown in downstream customer purchases.
The company also adjusted its construction plan for another fundraising project. The original "annual output of 124,000 tons of nylon new materials project" has been reduced to 50,800 tons, with production capacity cut by about 59%. The expected production time has also been extended from the end of 2024 to the end of 2026. Regarding the adjustment of production capacity and product arrangements, the company explained in the prospectus that with the growth of its own nylon 6 chip production capacity and the subsequent release of production capacity, the urgency of continuing to expand the production of nylon 6 chips has been reduced. Therefore, it has shrunk the original production capacity construction and prioritized products such as copolymerized nylon, nylon 66 and modified nylon. The second delay is related to the increase in product varieties and the more complex equipment selection, procurement, installation and commissioning.
After the production expansion plan is adjusted, follow-up investment continues. According to the company's calculations, the 50,800-ton project, the 80,000-ton nylon 66 project and Shandong Luhua Phase II still need to invest a total of about 340 million yuan of its own funds in the next three years, which has exceeded the fundraising limit of this private increase.
In addition to construction investment, depreciation and other costs will also increase after the new production line is put into production. Regulations also require the company to explain whether there is a risk of further decline in performance. In its reply, the company estimated that depreciation and amortization for 2026 would be approximately 100 million yuan. If all the remaining projects under construction included in the calculation are completed and transferred to fixed assets, the depreciation and amortization will be approximately 140 million yuan, which is an increase of approximately 40 million yuan from the aforementioned amount. The company stated that it takes time for new products to go from production, customer verification to stable sales. In the short term, it will be difficult to fully cover the cost pressure brought by new production lines, and there is still a risk of further decline in performance.
In addition to expanding production, the company also needs to consider the potential repayment pressure of two convertible bonds. As of the end of September 2026, the unconverted balances of "Aggregation Convertible Bonds" and "Universal Convertible Bonds" were approximately 203.5 million yuan and 338.0 million yuan respectively, totaling approximately 541 million yuan. The company has previously tried to promote share conversions by lowering the conversion price. In August 2026, the conversion price of "Aggregation Convertible Bonds" was revised down from 11.31 yuan/share to 8.85 yuan/share, effective from August 14. However, looking at the entire third quarter, the amount of equity conversion for "Aggregation Convertible Bonds" was only 6,000 yuan, while there was no equity conversion for "Universal Convertible Bonds".
"Aggregation Convertible Bonds" will mature on March 6, 2028, and "Universal Convertible Bonds" will mature on July 21, 2030. Calculated based on the terms that the "Aggregation Convertible Bonds" will be redeemed at 115% of the face value upon maturity, including the last period of interest, if the unconverted balance remains until maturity at the end of September 2026, the company will need to pay approximately 234 million yuan in cash.
For PolyShun, this fixed increase can alleviate liquidity pressure, but it cannot fully cover the company's estimated funding gap. Whether subsequent projects can bring sufficient returns, whether the main operating cash flow can be restored, and the progress of the conversion of convertible bonds will still affect the company's capital arrangements. (Author｜Chen Xinan)
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