Mechanical engineering 9th institute's ChiNext IPO "terminated (withdrawn)", committed to providing comprehensive automotive engineering solutions for automotive industry users.

On September 18th, the Ninth Design and Research Institute of the Machinery Industry Co., Ltd. (referred to as "Machinery Institute Nine") had its application for IPO on the Shenzhen Stock Exchange ChiNext Board changed to "terminated (withdrawn)". Due to the withdrawal of the application by Machinery Institute Nine and its sponsor, according to the Shenzhen Stock Exchange Stock Issuance and Listing Review Rules (revised in 2024) Article 62, the Shenzhen Stock Exchange decided to terminate the review for its IPO. The prospectus shows that Machinery Institute Nine's main businesses include smart factory EPC, smart equipment integrated solutions, and consulting and design services. The smart factory EPC and consulting and design services fall under the category of professional technical services. The smart factory EPC business includes services for automobile assembly and parts factories, automobile research and development centers, factory and process planning, consultation and design, construction engineering contracting, equipment manufacturing and integration, commissioning and overall delivery. The consulting and design services include planning, consultation, and design services for automobile assembly and parts factories, automobile research and development centers, feasibility studies, implementation plans, preliminary designs, construction drawings, engineering supervision, project management, and full-process consulting. The smart equipment integrated solutions fall under the category of smart equipment business, covering services such as process planning, design of automobile factories, equipment development, production and integration, commissioning and overall delivery. The main products include automobile painting line products core with process equipment, conveying equipment, and electrical control systems, as well as automobile assembly line products core with flexible conveying systems, automated assembly systems, smart detection systems, and smart logistics systems. Since its establishment, the company has been committed to providing comprehensive automotive engineering solutions to automotive industry users, mainly providing smart factory EPC, smart equipment integrated solutions, and consulting and design services to automotive industry users based on the company's overall planning, design, and engineering general contracting capabilities. The company has the full chain and full process service capabilities from project site selection, project approval to factory planning, engineering design, construction engineering contracting, and equipment engineering contracting. In terms of finance, in 2019, 2020, and 2021, Machinery Institute Nine achieved operating revenues of approximately RMB 2.327 billion, 3.834 billion, and 4.999 billion respectively; during the same period, the company's net profits were approximately RMB 89.788 million, RMB 155 million, and RMB 149 million respectively. It is noteworthy that Machinery Institute Nine mentioned in the prospectus that the company faces the risk of a high proportion of related party sales. In 2019, 2020, and 2021, the company's related party sales were RMB 1.718 billion, 2.045 billion, and 2.345 billion respectively, accounting for percentages of operating income at 73.84%, 53.35%, and 46.91% respectively; notably, as Machinery Institute Nine was previously a wholly-owned subsidiary of FAW Group, it has close business ties with FAW Group. During the reporting period, the related party sales to FAW Group were RMB 158.666 million, RMB 189.039 million, and RMB 221.808 million, accounting for percentages of operating income at 68.20%, 49.30%, and 44.37% respectively. Mainly due to the company's strong development in non-FAW Group businesses, the proportion of related party transactions, especially those with FAW Group, has gradually decreased during the reporting period, but FAW Group's business still has a significant impact on the company. Any significant adverse changes in the company's cooperation with related parties, especially FAW Group, will have a negative impact on the company's profitability.