Technology and Product Development Difficult to Adapt to Market Demand Currently, Yongxing Special Steel's control technology for austenite-ferritic duplex stainless steel, high-silicon ultra-low-carbon austenitic stainless steel smelting technology, and chemical composition for argon-oxygen refining process Control software technology has achieved results, has successfully developed nuclear power reactor internal components of stainless steel bar, HR3C high pressure boiler tube blanks and other products, super duplex stainless steel to achieve industrial mass production, Incoloy800H, Incoloy825 and other iron-nickel alloys have small batches produce.
However, the newly developed technologies and products of Yongxing Special Steel may still have some defects. If the company's technology development capability can not meet the market demand in a timely and effective manner, it will face the risk of industrial technological progress. With the accumulation of R&D technology of Yongxing Special Steel and the use of advanced process equipment, the higher the technological added value of new products and services, the higher the corresponding development and test production costs. If the development and trial production of Yongxing Special Steel fail to achieve the expected results, it will bring certain risks to the company's production and operation.
High-value borrowing depreciation doubles capital chain tightness According to the prospectus, Yongxing Special Steel’s financing methods are mainly bank borrowings and discounted bills. As of December 31, 2011, Yongxing Special Steel’s short-term borrowings and long-term loans due within one year amounted to RMB 186.9926 million, and the balance of long-term borrowings was RMB 170,700,000. Discounted bills accumulated in 2011 totaled RMB 246,294.35 million. . If the state regulates monetary policy and increases interest rates, it will increase the financing costs of Yongxing Special Steel and affect the operating performance of Yongxing Special Steel.
It is worth noting that the Yongxing Special Steel Co., Ltd. raised a total of 795 million yuan in fixed asset investment in this capital investment project. With the current depreciation policy for fixed assets of the company, depreciation is calculated on a straight-line basis. It is expected that the total new depreciation will be added after the completion of the project. About 70.2 million yuan. If there is a major change in the market environment and the implementation effect of the raised capital investment project is not good enough, the expected income of the raised capital project cannot be realized. Therefore, there is a risk that the Yongxing Special Steel will cause a decline in profits due to the large increase in fixed assets.
However, the newly developed technologies and products of Yongxing Special Steel may still have some defects. If the company's technology development capability can not meet the market demand in a timely and effective manner, it will face the risk of industrial technological progress. With the accumulation of R&D technology of Yongxing Special Steel and the use of advanced process equipment, the higher the technological added value of new products and services, the higher the corresponding development and test production costs. If the development and trial production of Yongxing Special Steel fail to achieve the expected results, it will bring certain risks to the company's production and operation.
High-value borrowing depreciation doubles capital chain tightness According to the prospectus, Yongxing Special Steel’s financing methods are mainly bank borrowings and discounted bills. As of December 31, 2011, Yongxing Special Steel’s short-term borrowings and long-term loans due within one year amounted to RMB 186.9926 million, and the balance of long-term borrowings was RMB 170,700,000. Discounted bills accumulated in 2011 totaled RMB 246,294.35 million. . If the state regulates monetary policy and increases interest rates, it will increase the financing costs of Yongxing Special Steel and affect the operating performance of Yongxing Special Steel.
It is worth noting that the Yongxing Special Steel Co., Ltd. raised a total of 795 million yuan in fixed asset investment in this capital investment project. With the current depreciation policy for fixed assets of the company, depreciation is calculated on a straight-line basis. It is expected that the total new depreciation will be added after the completion of the project. About 70.2 million yuan. If there is a major change in the market environment and the implementation effect of the raised capital investment project is not good enough, the expected income of the raised capital project cannot be realized. Therefore, there is a risk that the Yongxing Special Steel will cause a decline in profits due to the large increase in fixed assets.
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