The demand for CNC machine tools continues to decline, and there is a risk of supply shortages for core components

Recently, Nantong Guosheng Intelligent Technology Group Co., Ltd. (hereinafter referred to as Guosheng Intelligent Technology), which had been rejected by the main board, transferred to the Science and Technology Innovation Board and successfully passed the meeting.

Recently, Nantong Guosheng Intelligent Technology Group Co., Ltd. (hereinafter referred to as Guosheng Intelligent Technology), which had been rejected by the main board, transferred to the Science and Technology Innovation Board and successfully passed the meeting.

The author noticed that its IPO experience was also quite tortuous. As early as September 2017, Guosheng Zhike submitted an IPO application draft to the China Securities Regulatory Commission, intending to be listed on the main board of the Shanghai Stock Exchange. However, it failed to pass the meeting in March 2018. In November 2019, it moved to the Science and Technology Innovation Board to continue seeking listing. However, according to the company’s latest prospectus, the old problem of Guosheng Zhike’s rejection in 2018 still exists.

In addition, according to the prospectus, the actual controllers of Guosheng Zhike are Pan Weiguo and Wei Xiaohu, who are father and son. Their total shareholding ratio is as high as 87.94%, and their equity is highly concentrated. In addition, many relatives of Pan Weiguo also hold shares in Guoshengzhike. Guosheng Zhike plans to raise 760 million yuan in this IPO for mid-to-high-end CNC machine tool production projects (550 million yuan), CNC machine tool R&D center projects (55 million yuan), and supplementary working capital (155 million yuan).

Gross profit margin continues to decline

It is understood that Guosheng Zhike was established in 1996 and is mainly engaged in the research and development, production and sales of CNC machine tools, precision sheet welding products mainly including machine tool equipment, and precision machine tool castings. It is a domestic provider of mid-to-high-end CNC machine tools and intelligent automated production lines for metal cutting. Its business processes cover technology research and development, solution design, key component development, software secondary development and optimization, system integration, installation and debugging, and after-sales technical support.

According to the prospectus, in 2016, 2017, 2018 and the first six months of 2019, Guosheng Zhike’s revenue was 406 million yuan, 586 million yuan, 744 million yuan and 336 million yuan respectively, which were attributed to the parent company during the same period. The owners' net profits were 57.6484 million yuan, 93.0849 million yuan, 95.5352 million yuan, and 41.3968 million yuan respectively.

According to the prospectus, in 2016, 2017, 2018 and the first six months of 2019, Guosheng Zhike’s revenue was 406 million yuan, 586 million yuan, 744 million yuan and 336 million yuan respectively, which were attributed to the parent company during the same period. The owners' net profits were 57.6484 million yuan, 93.0849 million yuan, 95.5352 million yuan, and 41.3968 million yuan respectively.