Honggong Science and Technology submitted an IPO registration on the Growth Enterprise Market, focusing on automated processing production lines and equipment for bulk materials such as powder, granules, liquids, and pastes.

On December 16, Honggong Technology Co., Ltd. (referred to as Honggong Technology) applied for a change in the review status of its IPO on the ChiNext Board of the Shenzhen Stock Exchange to "submitted for registration." CITIC SEC is its sponsor institution, and it plans to raise 532.02 million yuan. According to the prospectus, Honggong Technology focuses on the research, development, production, and sales of automated processing production lines and equipment for bulk materials such as powders, granules, liquids, and pastes. It is a solution provider for material automation processing with proprietary core equipment, components, and software. The company analyzes a series of demand factors provided by downstream customers, such as the types of products, the physical and chemical properties of raw materials used by customers, the scale of newly built production capacity, product quality standards, production processes, etc., to provide suitable material automation solutions, and based on these solutions, produce production lines or stand-alone products that include proprietary core equipment, components, and software. Honggong Technology's main products are material automation processing production lines and equipment used in the processing of powders, granules, liquids, pastes, etc., in process industries. According to the customer's production process, material automation production lines are used to meet various process requirements such as feeding, batching, conveying, mixing, blending, grinding, drying, packaging, etc., and to achieve full-process automation and intelligent operation through software control systems. Stand-alone equipment is used to meet single process requirements such as mixing and transferring. In terms of profit model, Honggong Technology mainly provides material automation processing production lines and equipment to customers in industries such as lithium batteries, positive and negative electrode materials, and fine chemicals to meet the stable and efficient production and manufacturing needs of customers. The company provides suitable material automation solutions based on a series of demand factors provided by downstream customers, and produces production lines or stand-alone products that include proprietary core equipment, components, and software based on these solutions to generate operating income. In the reporting period, the composition of Honggong Technology's main operating income by product category is as shown in the table below: Financially, in the fiscal years 2021, 2022, 2023, and January-September 2024, Honggong Technology achieved operating income of approximately 579 million yuan, 2.178 billion yuan, 3.198 billion yuan, and 1.459 billion yuan, respectively. During the same period, the company achieved net profits of approximately 50.769 million yuan, 298 million yuan, 315 million yuan, and 111 million yuan, respectively. According to the risk factors section in the prospectus of Honggong Technology, the company may face the risk of a decline in operating performance. The significant growth in operating income from 2021 to 2023 was mainly due to the continuous increase in cooperation projects with top customers. Since 2024, the pace of expansion in downstream sectors has slowed down, leading to a decline in the company's operating income. The operating income and net profit for January-September 2024 were approximately 14.59 billion yuan and 1.11 billion yuan, respectively, with a year-on-year decrease of 26.44% and 37.42%. According to the company's profit forecast, the full-year operating income for 2024 is expected to decrease by 30.49%, and the net profit after deducting non-recurring gains and losses is expected to decrease by 27.55%. If the company's accounts receivable collection in 2024 is lower than expected, and the amount of goods with an inventory age of more than one year continues to increase, then the performance in 2024 will further decline.