Changde New Materials Technology Co., Ltd. (referred to as "Changde Tech") responded to the Beijing Stock Exchange's second round of inquiries on August 27. This fine chemical enterprise, founded in Yueyang, Hunan in September 2017, has taken just over eight years from its inception to its pursuit of a Beijing Stock Exchange listing. Yet in that brief span, it has navigated a convoluted path, withdrawing from the Shenzhen Stock Exchange main board before pivoting to the BSE.

Throughout its early history, from inception until mid-2021, all capital verification procedures were conducted by Hunan Jinxin Accounting Firm, an entity explicitly lacking securities and futures business qualifications. It was only later that a duly qualified audit institution, Tianjian Accountants, was brought in to conduct a hasty review and rectification. In several 2021 capital increases, external shareholders Disimanteng and Kangkai Environmental Protection acquired shares at 2.376 yuan per share, a price actually lower than the 2.5 yuan per share paid by the employee stock ownership platform Zhidexin during the same period. Notably, this low-priced share issuance was not recognized as share-based payment, in stark contrast to Zhidexin's transaction, which was accounted for as share-based compensation at a fair value of 4.19 yuan per share.

Adding to the concerns, the company's actual controller, Jiang Weihe, and his spouse, Xu Dongping, hold the two pivotal positions of Chairman and CFO/Board Secretary, respectively. Furthermore, Sinopec Capital made a strategic investment through a capital increase just before the IPO filing, extending the company's binding relationship with its largest supplier from the operational level to the equity level.

Operationally, while 2024 revenue surged 46.14% year-on-year to 1.555 billion yuan, net profit attributable to the parent company plummeted from 183 million yuan in 2022 to just 71.469 million yuan in 2024. The comprehensive gross margin deteriorated from 35.21% to 12.23% over three years, a decline of over 20 percentage points. The gross margin for the core product polyetheramine dwindled to a mere 0.94%, while ethyl acetate languished at just 0.35%. Meanwhile, R&D expense ratios have consistently lagged behind industry averages, operating cash flow has turned negative, and there is significant overlap between customers and suppliers, with purchases from the Sinopec Group reaching as high as 82%.

Changde Tech was established on September 11, 2017, registered in Yueyang City, Hunan Province, with Jiang Weihe serving as both legal representative and chairman. From its founding to its BSE IPO application, the timeline spans just over eight years. During the company's initial setup and multiple capital increases between 2019 and mid-2021, the capital verification institution was consistently Hunan Jinxin Accounting Firm, whose documents explicitly noted its lack of securities and futures business qualifications. Only at a later stage did Tianjian Accountants conduct a review. In July 2022, Changde Tech first submitted a prospectus to the Shenzhen Stock Exchange main board, aiming to raise 1.169 billion yuan. The review process saw numerous reversals: acceptance and inquiry in September 2023, a status change to "suspended" on September 25 of the same year, resumption of review in December, and a response to the second round of inquiries in January 2024. However, on July 1, 2024, Changde Tech and its sponsor CITIC Securities voluntarily withdrew the application, leading the Shenzhen Stock Exchange to terminate the review.

Undeterred by the main board setback, Changde Tech continued its pursuit. On July 7, 2025, the company was listed on the New Third Board. On December 26, 2025, the Beijing Stock Exchange accepted its public offering application. The BSE issued its first round of review inquiries on January 20, 2026. Subsequently, due to supplementary verification and financial report validity issues, the company applied for extensions and a review suspension before resuming the process on April 24, 2026. As of August 2026, the review status remains "under inquiry."

Prior to filing, actual controller Jiang Weihe directly held approximately 30.23% of shares, while his spouse Xu Dongping held about 10.08%, with the couple acting in concert. Additionally, Jiang Weihe indirectly controls part of the equity through employee stock ownership platforms. In February 2025, Sinopec Capital invested in Changde Tech via a capital increase, contributing 6.420981 million yuan in new registered capital, raising the company's registered capital from 127.563497 million yuan to 133.984478 million yuan. As an investment platform under the Sinopec Group, Sinopec Capital's entry extends the company's relationship with Sinopec from purely business dealings into the equity arena.

The most controversial equity event in Changde Tech's history occurred during several capital increases in 2021. In March 2021, the employee stock ownership platform Zhidexin invested at 2.5 yuan per share, followed by another increase in May at the same price. However, nearly simultaneously, external shareholders Disimanteng and Kangkai Environmental Protection invested at just 2.376 yuan per share, even lower than the employee platform's price. More puzzling still, both of Zhidexin's capital increases were recognized as share-based payments with a fair value reference of 4.19 yuan per share, while Disimanteng and Kangkai's lower-priced investments were neither classified as equity incentives nor treated as share-based payments. The Shenzhen Stock Exchange inquiry required the company to explain whether the low-priced share issuance to Disimanteng and others harmed the interests of the company or other shareholders.

Jiang Weihe, born in 1969, holds a bachelor's degree in chemical engineering from Zhejiang University and a master's degree in engineering from Hunan University. He is a senior engineer (researcher level) and a recipient of the State Council's Special Allowance. His early career was spent at Sinopec Baling Petrochemical Company, a background that established the "inextricable" connection between Changde Tech and Sinopec. Notably, Jiang Weihe currently serves as vice chairman of the Yueyang Municipal Committee of the China Democratic League. His spouse, Xu Dongping, serves as the company's financial officer and board secretary.

Changde Tech's business is structured into two segments: resource comprehensive utilization and new materials manufacturing. The resource utilization business operates on the principle of "turning waste into treasure." The company partners with major domestic caprolactam producers, converting their wastewater, waste gas, and byproducts into products such as epoxy cyclohexane, n-pentanol, and cement additives. This model relies heavily on geographic proximity and pipeline connections to upstream caprolactam manufacturers. The new materials segment primarily produces polyetheramine, used as a curing agent for epoxy resins in wind turbine blades, with downstream customers concentrated in the wind power blade manufacturing sector.

From 2022 to the first half of 2025, the company's revenue was 969 million yuan, 1.064 billion yuan, 1.555 billion yuan, and 719 million yuan, respectively. The 46.14% revenue surge in 2024 was largely driven by the addition of ethyl acetate, which contributed 79.14% of that year's revenue growth. However, net profit attributable to the parent company moved in the opposite direction: 183 million yuan in 2022, 79.7653 million yuan in 2023, 71.469 million yuan in 2024, and 49.255 million yuan in the first half of 2025. The declines in 2023 and 2024 were 56.41% and 10.4%, respectively. Full-year 2025 net profit attributable to the parent was 86.7585 million yuan. Additionally, the comprehensive gross margin fell from 35.21% in 2022 to 19.91% in 2023, further declining to 12.23% in 2024, before a slight recovery to 14.06% in the first half of 2025, a contraction of over 20 percentage points in three years.

Polyetheramine is the core product of Changde Tech's new materials segment and a key element of its claimed "innovation characteristics." Yet since the second half of 2022, polyetheramine prices have steadily declined. In the most recent year and period, the gross margin for the polyetheramine series was only 0.94% and 1.09%, respectively. The gross margin for the other core product, ethyl acetate, was even more dismal at 2.74% in 2024 and 0.35% in the first half of 2025. Meanwhile, the company's R&D expense ratio has continuously declined and fallen below the industry average. From 2022 to 2024, the R&D expense ratios were 3.21%, 3.20%, and 3.07%, respectively, while comparable industry companies averaged 4.44%, 4.28%, and 3.51% over the same period. By 2024, the company's R&D expense ratio had dipped below the industry benchmark. The Beijing Stock Exchange directly questioned in its inquiry whether the core technology constitutes common industry technology and whether performance growth is primarily driven by non-innovation factors.

The most concerning business characteristic of Changde Tech is the significant overlap between customers and suppliers. During the reporting period, the company had five entities that were both suppliers and customers, with transactions exceeding 1 million yuan on both sides. Purchases from these overlapping parties accounted for as much as 75.55%, 80.33%, and 82.56% of total purchases, while sales to them represented 12.32%, 7.51%, and 4.16% of total sales. The Sinopec Group and its joint ventures are the largest overlapping parties. During the reporting period, purchases of raw and auxiliary materials from the Sinopec Group accounted for 74.18%, 75.64%, 82.05%, and 69.27% of total purchases. For some core raw materials, the purchase ratio exceeded 90%. Key raw materials, including caprolactam byproducts and propylene oxide, are supplied "wall-to-wall" via pipelines from Hunan Petrochemical. Net operating cash flow plummeted from 179 million yuan in 2022 to negative 104 million yuan in 2024, remaining negative at -3.8943 million yuan in the first half of 2025. The cash-to-revenue ratio has remained below 1. Accounts receivable from notes increased significantly in 2024, with 37.5% of year-end receivables falling outside the credit period. The asset-liability ratio rose to 51.57%, and the current ratio has continued to decline.

For this BSE IPO, Changde Tech plans to raise 500 million yuan: 296 million yuan for the 650,000-ton annual chemical new materials integration project (Phase II), 127 million yuan for a multi-product line synergy expansion and quality improvement project, and 77 million yuan to supplement working capital.