Comprehensive Analysis of Future Performance Growth and Related Party Transaction Risks of Baose Co., Ltd.

According to public information, Baose Co., Ltd. (300402.SZ) announced on December 31, 2025, that it successfully won the bid for the “Procurement Project of Polysilicon Reactor Complete Set for Phase II of 700-ton Ultra-pure Polysilicon Project” from Shaanxi Nonferrous Tianhong Ruike Silicon Material Co., Ltd. (“Tianrui Company”) and has signed the contract. The winning bid amount is RMB 273 million. Since both the company and Tianrui Company are controlled by Shaanxi Nonferrous Group, this transaction constitutes a related party transaction [1].

1. Significant but Non-Dominant Revenue Contribution
   • According to brokerage API data, the single-quarter revenue for Q2 2025 (2025-06-30) was USD 312 million, equivalent to about RMB 2.03 billion at an exchange rate of 6.5. The single order of RMB 273 million accounts for about 7.5% of the quarterly revenue, which has a substantial boosting effect on the quarterly performance.
   • For the full year, the company’s revenue in the last four quarters was approximately RMB 2.03 billion, 2.57 billion, 2.74 billion, and 2.56 billion respectively (estimated), with an annual total scale in the range of RMB 9-10 billion. The RMB 273 million accounts for about 2.7%-3.0% of the full-year revenue, which has a positive but non-decisive driving effect on the full-year performance [0].

2. Execution Time and Cash Flow
   • As a procurement project of polysilicon reactor complete sets, the execution cycle is usually 6-12 months, and revenue may be gradually recognized in 2026, enhancing the visibility of future revenue.
   • The project is priced through public bidding, and the price has market reference value, which is conducive to ensuring a reasonable profit margin.
   • The company’s free cash flow reaches USD 297 million (about RMB 1.93 billion), indicating healthy cash flow and the financial strength to undertake and execute large-scale projects [0].

3. Industry Alignment
   • Polysilicon is a key raw material for the photovoltaic and semiconductor industries. Benefiting from the development of new energy driven by the “double carbon” policy, downstream demand has medium-to-long-term growth potential. This order indicates the company’s technical strength and market position in the new energy equipment field, and is expected to bring more similar orders.

1. Pricing Independence Risk
   • Although the transaction is determined through public bidding, under the background of the same controller, it is still necessary to pay attention to whether the pricing is fully market-oriented. Historically, some related party transactions have cases where pricing deviates from fair value, so continuous supervision of project execution and profit margin is required.

2. Operational Dependence Risk
   • Frequent transactions with companies within the same actual controller system may form business dependence and limit the ability to expand market-oriented. In the future, attention should be paid to the company’s ability to independently obtain third-party orders.

3. Governance and Compliance Risks
   • Related party transactions need to go through strict review procedures. Currently, the transaction has been reviewed by the board of directors and still needs to be submitted to the general meeting of shareholders for approval. The review process needs to ensure transparency and avoid suspicion of interest transfer [1].

1. Public Bidding Mechanism
   • The transaction is determined through public bidding procedures, introducing market competition mechanisms, which helps to constrain pricing and contract terms and reduce the risk of unfairness.

2. Information Disclosure and Review
   • As a listed company, Baose Co., Ltd. needs to fully disclose information about this related party transaction and go through the review of independent directors and the general meeting of shareholders, which is conducive to protecting the interests of minority shareholders.

3. Reference to Historical Practices
   • The company’s historical related party transactions with enterprises within the Shaanxi Nonferrous system can be referred to evaluate the fairness of pricing and the standardization of execution.

• The current stock price is USD 21.51 (about RMB 140), up 45.83% since 2025, indicating that the market is optimistic about the company’s performance improvement.
• The price-to-earnings ratio is as high as 86.04 times, reflecting the market’s expectation of high growth in the future. The execution of this order will test whether the company can convert the order into actual profits to support the current valuation [0].

This project has a positive effect on the performance growth of Baose Co., Ltd. The single order accounts for about 7.5% of the quarterly revenue and about 3% of the full-year revenue. It is expected to gradually recognize revenue in 2026 and increase profits. The company’s technical capabilities in the photovoltaic equipment field have been recognized, laying a foundation for subsequent order acquisition.

The related party transaction structure brings certain governance and independence risks, but the public bidding pricing and strict review process have alleviated some concerns. Investors should continue to pay attention to the progress of project execution, gross profit margin level, and the company’s ability to independently expand the market.

• Project execution progress and revenue recognition timing
• Acquisition of similar orders
• Trend of changes in the proportion of related party transactions
• Improvement in the company’s profitability (current ROE is 4.08%) [0]

Overall, this project brings substantial performance increments to Baose Co., Ltd., but when evaluating its long-term value, it is necessary to comprehensively consider the sustainability of orders, the governance of related party transactions, and the company’s overall profit improvement path.

[0] Jinling API Data - Baose Co., Ltd. (300402.SZ) Financial and Market Data
[1] Eastmoney - “Baose Co., Ltd.: Signs Contract for Winning Bid Project Worth RMB 273 Million” (https://finance.eastmoney.com/a/202512313607120470.html)
[2] Phoenix Finance - “Baose Co., Ltd.: Wins Bid for Related Party Project and Signs Contract” (https://finance.ifeng.com/c/8pXShqiNHYu)