Suzhou Kerun New Materials Co., Ltd. (hereinafter "Kerun New Materials") responded to the Shenzhen Stock Exchange's first-round inquiry on September 8. Founder Yang Dawei started the business in Huai'an, Jiangsu in 2011, relocated to Wujiang, Suzhou in 2019 to establish the joint-stock company, and together with his wife Sun Jing and mother Zhang Qin, controls 40.3% of the equity. Zhang Qin serves as deputy general manager of Jiangsu Kerun. The founder has frequently been referred to as a "PhD" in public promotions, yet the filing materials only list a master's degree with a doctoral status marked as "in progress." The shareholder roster features prominent financial investors including Levima Group, Sinopec Capital, and Sequoia-affiliated entities, but industrial shareholders such as Yutong Group, BAIC Capital, and Future Energy are simultaneously downstream customers, creating an overlap between shareholder and customer identities. In terms of executive compensation, core technical personnel Xu Gang earns an annual salary of 1 million yuan, surpassing Chairman Yang Dawei's 920,000 yuan.

From 2023 to 2025, the company's revenue grew from 91.48 million yuan to 230 million yuan, net profit jumped from 16.97 million yuan to 77.4 million yuan, and gross margin rose from 50.36% to 63.81%, significantly exceeding the industry average of 24.90%. However, the unit price of flow battery membranes fell from 834.46 yuan per square meter to 462.23 yuan, a cumulative decline of 44.6%, while gross margin moved counter-trend upward, attributed by the company to cost reductions from self-produced resin, with the external purchase price dropping sharply from 2,863.49 yuan per kilogram to 600.41 yuan per kilogram. Nevertheless, in 2025, net profit stood at 77.4067 million yuan while operating cash flow was only 31.5693 million yuan, with a cash collection rate barely above 40%. In the first half of 2026, operating cash flow turned negative to -30.6657 million yuan. Accounts receivable expanded from 29.26 million yuan to 210 million yuan, with the ratio to revenue rising from 32% to over 67%, and the collection rate at the end of June 2026 was only 2.08%. Inventory write-down provisions grew more than tenfold over three years.

Notably, the company's tetrafluoroethylene procurement agreement with Yonghe Jintang includes a clause for a "fixed total net profit," with 5 million yuan in 2024 and 8 million yuan each in 2025-2026, where the buyer proactively locks in profits for the seller at pricing far exceeding production costs. Capacity utilization halved from 82.69% to 47.83%, yet the company still plans to raise 965 million yuan for expansion, adding annual depreciation of 61.996 million yuan—nearly 70% of 2025 operating profit—meaning new capacity has yet to generate revenue while depreciation will first erode existing profits.

Industrial shareholders doubling as downstream customers, and core technical personnel outearning the chairman

The entrepreneurial trajectory of Kerun New Materials did not begin in 2019. Founder Yang Dawei established Jiangsu Kerun Membrane Materials Co., Ltd. in Huai'an, Jiangsu in 2011, targeting the industrialization of perfluorinated ion-exchange membranes. In 2019, he relocated the operational headquarters to Wujiang, Suzhou, formally establishing the current joint-stock company. In terms of shareholding structure, Yang Dawei, his wife Sun Jing, and his mother Zhang Qin collectively control 40.3% of the company's equity, holding 26.6%, 8.5%, and 1.3% directly respectively, with Yang Dawei also controlling an additional 3.9% through the employee stock ownership platform Kerun New Technology. Sun Jing serves as the administrative supervisor of Beijing Kerun, while Zhang Qin holds the position of deputy general manager at Jiangsu Kerun.

Founder Yang Dawei's resume also contains points that require clarification. Public records indicate he earned his bachelor's degree in Chemical Engineering and Technology from China University of Mining and Technology (Beijing) and a master's degree in Business Administration from Peking University's Guanghua School of Management. However, the company's external promotions repeatedly refer to him as a "PhD," while in the IPO filing materials, his educational background is listed as a master's degree, with his doctoral status described as "in progress." Among the shareholder lineup, Levima Group (under Legend Holdings) holds 10.7149% as the largest institutional shareholder, Sinopec Capital holds 6.6725%, and dozens of financial investors including Sequoia-affiliated Xiamen Yaheng, Zheshang Securities Investment, and General Technology Investment are also present. Worth highlighting is the potential conflict of interest between industrial capital and the company—Yutong Group, BAIC Capital, and Future Energy (an affiliate of Great Wall Motor) are not only shareholders but also downstream users in the hydrogen energy and new energy vehicle sectors.

Regarding executive compensation, in 2025 Chairman Yang Dawei received 920,000 yuan, while core technical personnel Xu Gang earned an annual salary of 1 million yuan, surpassing the chairman, and board secretary Cai Yuehua received 790,000 yuan.

Net profit of 77.4 million yuan against operating cash flow of only 31.57 million yuan, with receivable collection rate falling to 2%

From 2023 to 2025, the company's revenue grew from 91.48 million yuan to 230 million yuan, net profit rose from 16.97 million yuan to 77.4 million yuan, and overall gross margin climbed from 50.36% to 63.81%, far exceeding the 24.90% average of comparable companies in the industry. The selling price of proton exchange membranes for flow batteries declined continuously from 834.46 yuan per square meter in 2023 to 462.23 yuan in the first half of 2026, a cumulative drop of 44.6%. Despite the sustained price decline, gross margin rose rather than fell, which the company attributes to the sharp cost reduction from self-produced perfluorosulfonic acid resin and PSVE monomers, with the external resin purchase price falling from 2,863.49 yuan per kilogram in 2023 to 600.41 yuan per kilogram after in-house production, a decline of approximately 80%.

It is worth noting that in 2025, net profit was 77.4067 million yuan, while net operating cash flow was only 31.5693 million yuan, with a cash collection rate barely exceeding 40%. By the first half of 2026, net profit reached 24.424 million yuan, yet operating cash flow recorded -30.6657 million yuan, turning from positive to negative. In tandem with the deterioration in operating cash flow, accounts receivable expanded. The book balance of accounts receivable at the end of each reporting period grew from 29.26 million yuan to 210 million yuan, increasing more than sixfold in two and a half years, with the ratio to revenue climbing from approximately 32% to over 67%. The company admitted in its prospectus that major customers such as Shanghai Electric and Dalian Rongke "requested" extended credit terms of 6-9 months, and the company complied "at customer request." As of July 31, 2026, the collection ratio for accounts receivable at the end of 2025 was only 32.74%, while the collection rate for accounts receivable at the end of June 2026 was as low as 2.08%. Signals from the inventory side are equally noteworthy: inventory write-down provisions rose from 675,200 yuan in 2023 to 7.4325 million yuan in 2025, growing more than tenfold over three years.

The tetrafluoroethylene procurement agreement between Kerun New Materials and supplier Yonghe Jintang is the most puzzling arrangement in the entire inquiry response. According to disclosures, the 2024 agreement stipulates "the buyer's demand shall not exceed 200 tons, and regardless of demand levels, the buyer shall pay the seller a fixed total net profit of 5 million yuan"; in 2025, the fixed total net profit was 8 million yuan, remaining at 8 million yuan in 2026. In normal commercial procurement, a buyer proactively locking in profits for the seller is an extremely rare clause.

Regarding the fundraising and investment plans, capacity utilization for proton exchange membranes declined from 82.69% during the reporting period to 47.83% in the first half of 2026, nearly halved. With nearly half of existing capacity idle, the company still plans to raise 965 million yuan for substantial capacity expansion. The company disclosed that the investment project would add approximately 61.996 million yuan in annual depreciation and amortization upon completion, accounting for nearly 70% of 2025 operating profit. In other words, before the new capacity generates a single yuan in revenue, depreciation will consume the majority of existing profits.