# Jiadelie IPO Core Competitiveness Questioned, Cousin-Controlled Holding Over 95%

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Source: Pre-IPO Review

Text / Rui Finance Cheng Mengyao

Bearing 56.58 million yuan in Diliang notes, Quanzhou Jiadeli Electronic Materials Co., Ltd. (referred to as Jiadeli), which is equally controlled by cousins Huang Zezhong and Huang Yanhuang, has successfully passed the IPO review after two rounds of inquiry on the Shanghai main board.

It was accepted on November 6, 2025, and submitted for review by the Listing Committee on March 13, 2026. The IPO review cycle for Jiadeli was only about four months, which is very smooth compared to the average review time for A-shares.

In the two rounds of inquiry letters, the Shanghai Stock Exchange focused on issues such as Jiadeli’s raw materials, production lines, rapid growth of accounts receivable, large amount of Diliang notes, signing of gambling agreements before the IPO, joint control by cousins, and corporate governance.

1. Based on industry peers, explain whether the high dependence on a single imported supplier for raw materials and production lines is consistent with industry practices.

2. Whether the issuer has experienced difficulties in parts procurement or maintenance, specify cases where parts must be supplied by German Bruckner or repairs are needed, and cases where the issuer can resolve issues.

3. Explain the reasons and rationality for the main products’ gross profit margin being significantly higher than that of comparable companies’ similar products.

4. Provide details on the amounts paid by major customers using Diliang notes for settlement during each reporting period, the repayment status after maturity, the accounting treatment upon receipt of Diliang notes, and whether such treatment complies with the “Enterprise Accounting Standards.”

5. Describe the family members of the actual controller, family inheritance arrangements, the company’s history and changes in equity, whether the actual controller’s identification is accurate, whether related-party transactions are fully disclosed, the status of canceled related-party businesses during the reporting period, reasons for cancellation, legality, and whether there are any violations or benefits transferred to the issuer.

Jiadeli is a hidden champion in the global BOPP electrical insulation film field. From 2022 to 2024, the company’s compound annual growth rate was 15.51%, with continuous inflow of operating cash flow and good financial condition. As of June 2025, its cash on hand was five times the short-term debt.

However, with continuous overcapacity, expansion is urgent. Last year’s first half-year, for the construction of production lines 7 and 8, saw Jiadeli, which has been established for over 20 years, conduct its first equity financing, raising 150 million yuan with less than 5% equity through external capital.

In this IPO, Jiadeli plans to raise 725 million yuan. Based on a 20% issuance ratio, the estimated market value at listing is about 3.625 billion yuan. Of this, 525 million yuan will be used to build the Xiamen new materials production base (Phase I), and 200 million yuan will be used as working capital to address capacity bottlenecks and optimize financial structure.

The Xiamen base’s total investment is 1.2 billion yuan, with a total construction area of 92,800 square meters. Financial data from the past year shows total assets of 119 million yuan and a net loss of 1.1735 million yuan.

01

Ninety percent of revenue from BOPP electrical insulation film

Core competitiveness of products questioned

Jiadeli focuses on R&D, production, and sales of BOPP electrical insulation film, with over 20 years of experience. Its products are widely used in new energy vehicles, photovoltaic power generation, wind power, and other strategic emerging industries.

In film capacitors, BOPP electrical insulation film is the core raw material; in lithium battery composite current collectors, it is a key emerging development direction; in new energy, film capacitors have become one of the main types of capacitors.

From 2022 to 2024 and the first half of 2025 (referred to as the reporting period), Jiadeli achieved operating revenues of 550 million yuan, 528 million yuan, 734 million yuan, and 367 million yuan, respectively, with BOPP electrical insulation film sales accounting for 94.88%, 94.12%, 94.65%, and 94.91%. Meanwhile, net profit fluctuated significantly, at 192 million yuan, 141 million yuan, 238 million yuan, and 125 million yuan.

With ninety percent of revenue from BOPP electrical insulation film, the core competitiveness and technological advancement of Jiadeli’s BOPP film attracted detailed inquiries from the exchange.

The first inquiry letter pointed out that BOPP electrical insulation film is the most mainstream insulating medium for film capacitors, accounting for about 75% of the market share. Key indicators include withstand voltage, stability, thickness, uniformity, and temperature resistance. The exchange required Jiadeli to explain the market space and future development trends of film capacitors, whether there are significant barriers to switching between BOPP and other plastic films, and how the company’s core competitiveness and technological advancement reflect industry trends.

Jiadeli stated that, according to material types, the main materials in the plastic film industry include polypropylene (PP), polyester (PET), nylon (PA), and polyimide (PI). Among these, only materials that can be used in electrical-grade insulation are produced via biaxial stretching processes.

Currently, mainstream biaxially stretched films are mainly divided into packaging films, separators, and electrical insulation films. Among electrical films, based on substrate and process differences, further subdivided into BOPP roughened film, BOPP electrical insulation film, and BOPET electrical insulation film. Other plastic films, despite larger capacity, are difficult to enter the BOPP electrical insulation film field; BOPET films are limited by material properties, have smaller capacity, and specific application scenarios, thus unlikely to significantly impact the BOPP electrical film supply market.

02

High gross profit margin compared to industry average

Order of 61.48 million yuan for BOPP electrical insulation film on hand

Based on thickness, Jiadeli’s BOPP electrical insulation films are categorized into ultra-thin, thin, and medium-thick films. Ultra-thin films have a clear first-mover advantage and higher pricing space, contributing over 40% of revenue. From 2022 to 2024, the compound annual growth rate was 17.08%, outperforming overall revenue growth.

Its ultra-thin films also perform better than other products but show a trend of initial decline followed by recovery, with gross profit margins of 63.51%, 58.43%, 57.71%, and 59.06%. In the second round of inquiry, the SSE focused on why Jiadeli’s gross profit margin was significantly higher than that of comparable companies during the same period.

The exchange noted that Jiadeli’s overall gross profit margins were 49.29%, 41.82%, 46.10%, and 48.79%, much higher than the industry averages of 41.31%, 33.22%, 32.88%, and 36.85%. They asked whether future gross profit margins might decline due to changes in product prices and raw material costs, and whether this could negatively impact performance.

Jiadeli explained that gross profit margin fluctuations are mainly influenced by sales prices and raw material costs, with BOPP electrical insulation film margins primarily affected by demand-side substrate market prices, upstream polypropylene prices, and international oil and shipping costs.

From 2022 to 2024, the sales prices of ultra-thin films continued to decline, causing gross margins to decrease. In the first half of 2025, increased unit sales prices and lower raw material costs led to a 1.53 percentage point increase in gross margin and a 1.07 percentage point rise due to lower raw material costs. As of the end of the period, the order backlog for BOPP electrical insulation film was 61.48 million yuan, with a gross margin of 52.90%, and no signs of decline.

However, it is noteworthy that the regranulation product, which accounts for about 5% of performance, has prices affected by supply and demand, showing a downward trend, with gross losses of 5.50%, 5.81%, 5.95%, and 6.01% in each period.

The SSE also inquired about the cost accounting process for regranulation, its negative gross profit margin, and its reasonableness. The sponsor and auditors’ review opinions indicated that Jiadeli’s regranulation cost accounting differs somewhat from industry peers but is based on sales prices, consistent with industry practices.

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03

Ninety percent of polypropylene resin from Nordic Chemicals

Strategic cooperation is non-exclusive

Currently, the dielectric phase of film capacitors is transitioning from metallized films to high-performance films. In recent years, changing downstream application scenarios have increased demand for ultra-high voltage, high temperature, and miniaturized film capacitors. Improving temperature resistance mainly relies on raw material formulations and modifications.

The technical barriers in the BOPP electrical insulation film industry mainly involve production line customization and transformation, manufacturing processes, raw materials, and formulations. The SSE analyzed Jiadeli’s operations from the perspectives of raw material supply stability, effective production capacity, and accounts receivable.

High purity, low ash, and high uniformity are strict requirements for polypropylene resin used as raw material. Domestic production of electrical-grade polypropylene resin is limited; only a few overseas suppliers such as Nordic Chemicals (Borealis), SK Oil, and Singapore TPC can supply stable electrical-grade polypropylene resin. In 2024, these three companies supplied about 230,000 tons globally, with approximately 175,000 tons supplied to China.

Jiadeli mainly imports electrical-grade polypropylene resin. During the period, over 90% of its polypropylene resin procurement from Borealis, with amounts of 248 million yuan, 238 million yuan, 280 million yuan, and 114 million yuan, accounting for 87.53%, 84.95%, 80.59%, and 78.43% of total procurement, respectively.

Prices have declined due to international oil and shipping costs, with average purchase prices dropping from 16,800 yuan/ton in 2022 to 12,700 yuan/ton in 2024, and 12,800 yuan/ton in the first half of 2025.

The SSE requested Jiadeli to disclose the rights and obligations, breach responsibilities, and the term of the strategic cooperation agreement with Borealis, whether there are prerequisites for priority supply, and the stability and assurance of supply of electrical-grade polypropylene resin.

Jiadeli responded that about 40% of Nordic Chemicals’ exported electrical-grade polypropylene resin is supplied to Jiadeli, which is its largest customer with stable demand. The cooperation is valid for five years, and the strategic partnership is non-exclusive; both parties can cooperate with other similar partners simultaneously.

04

Production lines rely on a single imported supplier

Equipment procurement aligns with industry norms

The BOPP electrical insulation film industry benefits from scale effects, requiring a certain production scale to control costs and enhance competitiveness. It is capital-intensive, requiring significant investment in main production lines, advanced workshops, and testing equipment to ensure product quality and reliability.

Jiadeli mainly secures capacity through long-term intent agreements with German Bruckner. All 11 production lines for BOPP electrical insulation film currently in operation or under construction are supplied by Bruckner, with maintenance and parts replacement services provided by Bruckner’s service company. Equipment supply is highly concentrated.

The SSE’s first inquiry focused on the commissioning time, actual service life, and effective capacity of each line, and in the second round, asked whether Jiadeli had experienced procurement or maintenance difficulties with parts, the advantages of choosing Bruckner over other suppliers, and whether switching suppliers would affect operations.

During the period, Jiadeli’s capacity utilization and production-sales rates remained high. Capacity utilization rates were 107.74%, 99.52%, 102.89%, and 105.81%; production-sales rates were 99.44%, 97.08%, 101.61%, and 98.46%. Except for 2023, when overcapacity occurred, expansion is imminent.

In 2023, Jiadeli signed a procurement contract with Bruckner and made payments, but this reduced its cash by 39.02 million yuan at year-end.

To meet increasing equipment procurement needs, Jiadeli attracted external investors in 2025, raising funds to optimize its financial structure and ensure steady capacity expansion.

Last year’s first half-year saw the company, established over 20 years, conduct its first equity financing, raising 150 million yuan with less than 5% equity through four external investors.

In the second half, Jiadeli issued 20% of its shares to raise 725 million yuan, with an estimated market value of about 3.625 billion yuan.

Jiadeli stated that if future capacity expansion continues, other overseas suppliers such as Germany’s Lindorff and France’s Masion are options, consistent with industry norms.

Currently, few domestic manufacturers produce BOPP electrical insulation film lines, such as Beijing Xinghe Zhongchuang Technology Co., Ltd. and Beijing Mechanical Industry Automation Research Institute, but they have limitations in thin film production. Among peers, Longchen Technology in 2023 commissioned a line from Beijing Xinghe Zhongchuang for 5-7μm base film production.

05

Large Diliang notes attract attention

Ninety-nine percent of accounts receivable recovered

Both inquiry rounds separately questioned Jiadeli’s accounts receivable situation. As revenue grew, accounts receivable increased continuously. During the period, the balance was 81.11 million yuan, 126 million yuan, 156 million yuan, and 162 million yuan, respectively, accounting for 14.75%, 23.89%, 21.23%, and 44.14% of revenue; bad debt provisions were 5.32%, 5.21%, 5.01%, and 5.03%.

The increase in accounts receivable was mainly due to transfer of Diliang notes by customers such as Yingfeng Electronics, Huajia New Materials, Huajing New Energy, and Kunshan Hongdeng Longtai, as well as accounts still within credit periods, with Diliang note settlement amounts of 0, 25.927 million yuan, 47.172 million yuan, and 56.581 million yuan, growing rapidly. The SSE required further disclosure on whether the accounting treatment of Diliang notes complies with the “Enterprise Accounting Standards.”

Diliang notes are certificates issued by BYD and its affiliates under supply chain information service platform rules, confirming accounts payable rights to suppliers. They are supply chain financial debt certificates that do not fully meet the elements of negotiable instruments under the “People’s Republic of China Negotiable Instruments Law” and the “Electronic Commercial Draft Business Management Measures,” and do not qualify as negotiable instruments, thus should be reported as accounts receivable.

During each period, the settlement amounts involved Diliang notes of 0, 25.927 million yuan, 47.172 million yuan, and 56.581 million yuan.

Upon receipt of Diliang notes, Jiadeli’s accounting treatment includes: (1) holding the notes to maturity and then terminating the financial asset, debiting bank deposits and crediting accounts receivable; (2) factoring and discounting the notes, continuing to recognize the financial asset, and recognizing the received consideration as a financial liability, debiting bank deposits and crediting short-term loans; at maturity, terminating the financial asset, debiting short-term loans and crediting accounts receivable.

By December 31, 2025, Jiadeli had repaid 25.927 million yuan, 84.846 million yuan, and 56.611 million yuan of Diliang notes, with post-repayment collection rates of 99.68%, 99.79%, and 99.43%, respectively.

06

Cousins hold nearly 50% jointly

Corporate governance effectiveness and operability questioned

Jiadeli was established in May 2002. Initially, it was fully owned by individual Guo Lizhen, who invested 8 million USD. Guo Lizhen made two capital increases afterward and held the company alone.

In 2010, Guo Lizhen and her spouse Huang Dongliang decided on a family inheritance plan for the company’s equity. In March of that year, Guo Lizhen transferred 50% of her shares to her grandson Huang Zezhong and 50% to her granddaughter-in-law Huang Yanhuang. To optimize the shareholding structure, in June 2025, Jiadeli introduced four state-controlled investors—Fuchuang Venture Capital, Jiaokong Jinxin, Jinyuan Zhanhong, and招商文旅 (SS)—changing the shareholder number from 2 to 6. Huang Zezhong and Huang Yanhuang, the cousins, jointly hold 47.9442% each, totaling 95.8884%.

This capital increase was also accompanied by a gambling agreement: if Jiadeli fails to go public before December 31, 2028, investors can require the actual controller to buy back shares at a price calculated as “additional capital × [1 + (6% ÷ 365) × actual investment days],” with rights of first refusal, anti-dilution, and priority liquidation.

Since the transfer of shares in March 2010, the two cousins have maintained control over more than 95% of voting rights, acting as joint controllers and actual controllers.

Older brother Huang Yanhuang has a high school diploma, previously responsible for East China Electric Power Production Department and Jiadeli’s equipment and engineering department. Younger brother Huang Zezhong has a bachelor’s degree, previously served as sales director and deputy general manager, now is director and general manager.

In September 2023, Huang Zezhong and Huang Yanhuang renounced their foreign resident status, transforming Jiadeli from a joint venture between Taiwan, Hong Kong, and Macau into a domestic enterprise, and in March 2024, the company was restructured into a joint-stock limited company, aiming for a listing on the SSE main board.

The SSE pointed out that the actual controller and family members control or have controlled multiple companies, with some related-party transactions during the reporting period. Several related parties have been deregistered. Whether the joint control by the two persons affects the company’s compliance, whether there are arrangements for holding shares on behalf of family members or others, and whether there are violations or benefits transferred to the issuer, were questioned. They also asked for disclosure of the deregistered related-party business activities, reasons, legality, and whether there are any violations, as well as mechanisms for resolving disagreements or disputes between Huang Zezhong and Huang Yanhuang, and whether effective resolutions can be reached.

Jiadeli responded that there are no arrangements for holding shares on behalf of family members or others. Regarding related-party transactions, they do not involve main product sales or raw material procurement; related-party purchases of auxiliary equipment and packaging are relatively small; and incidental related-party fund transfers and guarantees have been cleaned up and regulated during the limited liability company stage. No administrative penalties or major violations have occurred, and no benefits or costs have been transferred to the issuer.

The sponsor and legal counsel also stated that Jiadeli has established a sound corporate governance structure, with shareholder meetings, the board of directors, and management, and has internal control systems. The reasons for deregistering related parties are reasonable.

On January 23, 2026, Huang Zezhong and Huang Yanhuang signed a “Supplementary Agreement to the Unanimous Action Agreement,” stipulating that if they cannot reach consensus, the production, R&D, and equipment projects will be jointly approved based on Huang Yanhuang’s opinions, and market, procurement, logistics, and other matters will be based on Huang Zezhong’s opinions. When specific issues are difficult to categorize, Huang Zezhong’s opinions will be used as joint approval.

Additionally, any disputes arising under the “Unanimous Action Agreement” should be resolved through friendly negotiations. If negotiations fail, either party can file a lawsuit in a court with jurisdiction. The agreement and its supplementary agreement are valid for six years from the date of listing.

Appendix: List of intermediaries involved in Jiadeli’s IPO

Sponsor: GF Securities Co., Ltd.

Auditor: Rongcheng Certified Public Accountants (Special General Partnership)

Law Firm: Guohao Law Firm (Shanghai)

Valuation Agency: United Zhonghe Land and Real Estate Asset Appraisal Co., Ltd.

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Responsible Editor: Yang Hongbu