A-share subscription | "Ning Wang" "Di Wang" equipment supplier Honggong Technology (301662.SZ) starts subscription, and the turnover rate of accounts receivable continues to decline.

On April 8th, Honggong Technology (301662.SZ) started its IPO subscription with an issue price of 26.6 yuan per share, a subscription limit of 0.45 million shares, a P/E ratio of 7.05 times, listed on the Shenzhen Stock Exchange, with GF SEC as its sponsor. 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 powder, granules, liquids, and pastes. It is a material automation solution provider with independent core equipment, components, and software. The company mainly provides material automation processing lines and equipment to industries such as lithium batteries, positive and negative electrode materials, and fine chemicals, meeting the stable and efficient production needs of customers. In the field of lithium battery slurry homogenization, the company has become a equipment supplier for well-known customers such as Contemporary Amperex Technology, BYD Company Limited, CALB, Honeycomb Energy, Eve Energy Co., Ltd., Sunwoda Electronic, and Ganfeng Lithium Group. During the reporting period, the production and sales rates of Honggong Technology's material automation processing lines were 89.80%, 69.78%, 76.47%, and 110.47%, while the production and sales rates of individual equipment were 77.32%, 77.47%, 131.03%, and 89.69%. Regarding individual equipment, Honggong Technology stated that in 2021 and 2022, the company's production of individual equipment exceeded sales, mainly due to the completion of production and acceptance of multiple mixers and transfer tanks by Contemporary Amperex Technology and its subsidiaries. In terms of financials, the company achieved operating revenues of approximately 579 million yuan, 2.178 billion yuan, and 3.198 billion yuan respectively in 2021, 2022, and 2023. The net profits were approximately 50.077 million yuan, 298 million yuan, and 315 million yuan, respectively. Honggong Technology stated in the prospectus that the significant increase in operating income from 2021 to 2023 was mainly due to the continuous increase in cooperation projects with top customers. Since 2024, the expansion pace in downstream sectors has slowed down, leading to a decline in operating income. In the period from January to September in 2024, the operating income and net profit were approximately 1.459 billion yuan and 111 million yuan, a decrease of 26.44% and 37.42% year-on-year. Since 2023, due to the slowdown in the expansion speed of downstream customers, the collection speed has slowed down, and the proportion of accounts receivable over one year has continued to increase, reaching 18.35%, 34.22%, and 50.15% in the past two years and one period-end respectively. The accounts receivable turnover rate has been continuously decreasing, at 3.17, 2.09, and 1.00 in the past two years and one period respectively.