A shares subscription | Zhongli shares (603194.SH) open subscription, focusing on the production of electric industrial vehicles.

On December 13, Zhongli Group (603194.SH) started its subscription, with an issue price of 20.32 yuan per share, a subscription limit of 14,500 shares, a price-to-earnings ratio of 10.11 times, listed on the Shanghai Stock Exchange, and Guotai Junan Securities as its exclusive sponsor. The prospectus disclosed that Zhongli Group is a high-tech enterprise focusing on the research and development, production, and sales of industrial vehicles such as electric forklifts. It now has the research and production capabilities of four major categories and over a hundred specifications and models of products, widely used in various fields such as logistics warehousing, electrical machinery, food and beverage, e-commerce, automobile manufacturing, wholesale and retail, and petrochemicals. In terms of global market share of electric forklifts, industrialized countries and regions generally have significantly higher market share of electric forklifts compared to internal combustion forklifts. However, China's market share of electric forklifts is relatively low. According to data from the World Industrial Vehicle Statistics Association and the Industrial Vehicle Branch of the China Construction Machinery Industry Association, the market share of electric forklifts globally in 2021 was 67.74%, while in Europe, it was as high as 87.99%. In contrast, China's market share was only 59.83%, still lagging behind developed countries and regions. With the continuous advancement of industrialization, China's electric forklifts will have vast development space in the future. It is understood that Zhongli Group plans to use the raised funds for the following projects after deducting issuance expenses: Financially, in the fiscal years of 2019, 2020, and 2021, the company achieved operating income of approximately 2.164 billion yuan, 2.477 billion yuan, and 4.206 billion yuan, respectively. The company's net profit was approximately 150 million yuan, 222 million yuan, and 354 million yuan, respectively. It is important to note that the prospectus specifically warns investors to pay attention to the risk of declining return on net assets. During the reporting periods, the company's weighted average return on net assets was 37.16%, 37.34%, 38.15%, and 16.30%, respectively. The proposed public offering of shares will raise additional funds of 1.336 billion yuan, accounting for 80.61% of the company's net assets as of June 30, 2022. Therefore, after this offering, there will be a significant increase in the company's net assets, and due to the time needed to implement the investment projects with the raised funds, the return on net assets may decrease to a certain extent before the projects achieve the expected level of return. Overall, there is a risk of a decrease in return on net assets due to rapid growth in net assets after the company goes public.