Yunnan Energy faces losses, halts project amid market pressure

Yunnan Energy New Material Co., Ltd. (referred to as "Enjie Shares" or "the company") has received a "New Century Rating Announcement of Concern" due to its performance loss in the first half of 2025 and the termination of some fundraising projects. The company's individual credit rating is 'aa', and its main credit rating is 'AA/stable', with its convertible bond rated 'AA'. As of June 20, 2025, the balance of Enjie Convertible Bonds is CNY 453 million, maturing on February 11, 2026, with a conversion price of CNY 32.01 per share. All raised funds for the projects have been utilized.

For the first half of 2025, the company reported operating revenue of CNY 5.763 billion, a 20.48% increase year-on-year. However, its gross profit margin declined by 5.49 percentage points to 15.53%, resulting in a net loss of CNY 132 million, a decrease of CNY 423 million from the same period last year. Net cash flow from operating activities was CNY 210 million, an 86.46% decrease from the same period last year. The asset-liability ratio increased by 0.56 percentage points to 45.04% as of June 2025.

The company plans to terminate the "Jiangsu Ruijie Power Automobile Lithium Battery Aluminum-Plastic Film Industrialization Project," redirecting the remaining CNY 284 million of raised funds and related interest income to supplement working capital for its main business operations. This project, which had a total investment of CNY 1.6 billion, had CNY 566 million invested as of June 2025. New Century Rating believes that these events will not immediately impact the company's credit quality.