Sifang Technology's Fundraising of Over 1 Billion Yuan Draws Inquiries; Admits One of the Funded Projects Has No Orders on Hand

Daily Economic News Reporter: Zhao Li Nan    Editor: Dong Xing Sheng

On March 11, Sifang Technology (SH603339, stock price 13.82 yuan, market value 4.276 billion yuan) responded to the Shanghai Stock Exchange’s “Inquiry Letter” regarding its application for issuing convertible corporate bonds.

The Daily Economic News reporter noted that Sifang Technology’s large refinancing plan of 1.023 billion yuan has attracted regulatory attention due to its involvement in two major core capacity expansion projects.

Sifang Technology admitted that the highly anticipated “Enhanced Polyurethane Deep Cold Composite Material Project for LNG (Liquefied Natural Gas) Insulation Systems” has not yet obtained technical certification from French GTT, and currently “has no customer orders on hand.”

Meanwhile, the company’s special tank container business capacity utilization rate has declined from 158.35% in 2022 to 96.25% in the first three quarters of 2025.

LNG Composite Materials Still Without Orders

In this fundraising plan exceeding 1 billion yuan, approximately 482 million yuan will be invested in the “LNG Insulation System Enhanced Polyurethane Deep Cold Composite Material Project.” Once operational, it is expected to add an annual LNG composite material capacity of 16,052 tons.

The Shanghai Stock Exchange’s inquiry letter requested Sifang Technology to explain the necessity of the project based on current orders and other factors. In response, Sifang Technology stated: “Since we have not yet obtained GTT certification, the company’s LNG composite materials currently have no customer orders on hand.”

Sifang Technology explained that, as the global LNG ship liquid cargo containment systems mainly adopt French GTT’s membrane technology, the company’s product—LNG insulation system polyurethane boards—sold to downstream customers (mainly shipyards with LNG shipbuilding qualifications) must obtain certification from GTT when used in GTT membrane-type LNG ship liquid cargo containment systems.

“The company has already begun in-depth GTT product certification work, signed confidentiality agreements with GTT, and entered the certification stage,” Sifang Technology said.

Although no orders have been secured yet, the company remains confident in the project’s R&D progress and future prospects.

The company revealed that since August 2024, it has been communicating with GTT regarding the certification of this LNG composite material. “To date, the company has completed the construction of the core foaming production line, received preliminary on-site review and positive feedback from GTT, and has conducted multiple continuous trial productions, completing a total of 121 pilot batches. The technical indicators of the products meet GTT’s requirements, laying a solid foundation for subsequent GTT certification and reducing project implementation uncertainties,” Sifang Technology stated.

The company said it will fully leverage industry and its own business advantages, and as the GTT certification progresses, it will gradually engage with downstream shipping companies and shipyards; once LNG composite materials reach mass production, it aims to quickly sign sales contracts and commence production.

Special Tank Container Capacity Utilization Declines

In this refinancing, the company plans to raise about 410 million yuan to invest in the “Special Tank Storage and Transportation Equipment Production Project.”

However, Sifang Technology’s response indicates that the capacity utilization rate of its special tank containers has shown a clear downward trend during the reporting period. From 2022 to September 2025, the utilization rates were 158.35%, 140.13%, 114.27%, and 96.25%, respectively.

The Shanghai Stock Exchange’s inquiry asked the company to explain the necessity and reasonableness of the project.

Sifang Technology responded that the decline in capacity utilization of its special tank containers during the reporting period was mainly due to international geopolitical tensions, global macroeconomic downturn, continued sluggishness in the downstream chemical industry, high US dollar interest rates increasing financing costs for tank leasing companies, and a year-on-year decrease in demand for tank containers.

The company stated that the tank container industry exhibits cyclical fluctuations. Due to safety considerations, policy encouragement, and low current market penetration, the industry’s production capacity center continues to rise in cycles.

Sifang Technology emphasized that the future market space for tank containers is broad. On one hand, there is a huge market for replacing tank trucks; on the other hand, the high-end and diversified application scenarios in downstream markets—especially for special tank containers—are rapidly expanding from traditional chemical and food & beverage fields to high value-added, high-tech industries such as new energy, semiconductors, and offshore tanks.

Regarding orders, Sifang Technology showed positive signals. As of September 30, 2025, the company’s on-hand orders for special tank containers totaled 290 million yuan, with a total of 1,834 units.

“With industry cycle stabilization and recovery, along with the high-end and diversified development trend of downstream markets for special tank containers, there are no substantial obstacles to capacity digestion,” the company said.

Daily Economic News