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01

Fuyao Glass's direct line, Weili, Xiaoli and Li Auto's supplier, Keli Equipment is about to be listed on the Science and Technology Innovation Board

According to an announcement from the Shenzhen Stock Exchange, Fuyao Glass's supplier, Kelvin Equipment, announced the preliminary allotment and winning results today (July 15), with Changjiang Securities as the sponsor.

Keli Equipment (SZ: 301552) is the full name of Hebei Keli Automotive Equipment Co., Ltd. Its main products include windshield installation components, side window glass lifting components, corner window glass assembly components and other automotive parts. They are widely used in the automotive glass field and are an important part of the automotive glass assembly.

Keli Equipment's business model covers the entire industry chain from product research and development, raw material procurement, manufacturing to product sales. The company mainly adopts the production model of "production based on sales + reasonable stocking" and sells directly to first-tier suppliers of automotive parts and vehicle manufacturers.

The automotive glass assembly industry is an important part of the automotive parts industry, with the characteristics of capital intensiveness, high technical threshold, and strict product certification. The global automotive glass market presents an oligopolistic pattern, with four major manufacturers, Fuyao Glass, Saint-Gobain, Agilent, and Sheet Glass, accounting for more than 75% of the market share. With the rapid development of the new energy vehicle market and the strengthening of the trend of lightweight vehicles, the automotive glass assembly industry will usher in new development opportunities.

The sales model is mainly based on customization and direct sales. Its customer base includes well-known domestic and foreign automotive glass manufacturers such as Fuyao Glass, Saint-Gobain, Agilent, Vitro, Yaopi Glass, as well as vehicle manufacturers such as GAC Mitsubishi, Great Wall Motors, and Dongfeng Nissan. The company has business cooperation with global automotive glass leaders.

Keli Equipment's products are widely used in traditional car companies such as BBA, GM, Volkswagen, Honda, Toyota, Nissan, Ford, etc., and are also used in new energy vehicle brands such as Tesla, NIO, Ideal, and Xiaopeng.

There is no company among A-share listed companies whose products and product application areas are completely identical to those of Keli Equipment and constitute a direct competitor.

After years of operation in the industry, the company has developed into one of the leading suppliers with the most complete product categories and the most covered vehicle models in the industry. It is the largest domestic supplier of injection molding and extrusion automotive glass assembly components, and its domestic and global market share has increased year by year. In 2021-2023, the company's global automotive glass component product market share was 4.01%, 5.21% and 5.57%; the domestic automotive glass component product market share was 10.70%, 13.46% and 14.49%, showing an overall year-on-year growth trend.

Keli Equipment is also involved in overseas business. From 2021 to 2023, Keli Equipment's main overseas business income was RMB 62.8619 million, RMB 118 million and RMB 118 million respectively, which is an important manifestation of the company's global layout and successful development and service of Vitro, the largest glass manufacturer in North America, and AGP, a South American glass manufacturer.

Among the main products, windshield installation components occupy the core of revenue, accounting for approximately 81%, while side window glass lifting components and corner window glass assemblies account for 13% and 4% respectively.

In terms of finance, the company's operating income in fiscal years 2021-2023 was RMB 293 million, RMB 406 million and RMB 488 million, with a compound growth rate of 29.02%; the net profit was RMB 63.5219 million, RMB 120 million and RMB 142 million, with a compound growth rate of 49.57%.

%。

The R&D expenses of Keli Equipment were RMB 17.214 million, RMB 20.664 million and RMB 24.9118 million respectively, with a compound growth rate of 20.30%.

In the latest 2024 Q1 financial report, the operating income was 128 million yuan, a year-on-year increase of 37.22%, and the net profit was 38 million yuan, a year-on-year increase of 61.27%. The debt ratio is 10.59%, and the debt repayment pressure is small.

It should be noted that Keli Equipment is more dependent on orders from its major customer Fuyao Glass. From 2021 to 2023, orders from Fuyao Glass accounted for 44.41%, 52.18% and 56.76% of its revenue respectively. There is a risk of dependence, and the issue of independence needs to be resolved urgently.

The controlling shareholders and actual controllers of Keli Equipment are Zhang Wanwu, Guo Yanzhi and Zhang Ziheng, who together directly or indirectly hold 91.30% of the company's shares and have a significant impact on the company's business decisions. In addition, the company also has an employee shareholding platform, Tianjin Keda Enterprise Management Consulting Partnership (Limited Partnership), which holds 6.69% of the company's shares to encourage employees to develop together with the company.

Keli Equipment issued 17 million shares this time, accounting for 25% of the total share capital after the issuance. All of them are new shares issued to the public, and the issue price is 30 yuan per share.

02

Overseas sales account for more than half, mobile phone accessories leader UGREEN Technology completes subscription

According to the announcement of the Shenzhen Stock Exchange, Shenzhen Green Link Technology Co., Ltd. opened subscription today (July 15), with an issue price of 21.21 yuan per share, and the sponsor is Huatai United Securities Co., Ltd.

Founded in 2012, UGREEN Technology (SZ: 301606) is a high-tech enterprise focusing on the research and development, design, production and sales of 3C consumer electronics products. The company's mission is to "create value for users, enhance employee happiness, and contribute to social development" and is committed to becoming a world-renowned technology consumer electronics brand.

UGREEN's products mainly cover five major series: transmission, audio and video, charging, mobile peripherals, and storage. Among them, charging accounts for 32.43%, transmission accounts for 30.09%, audio and video accounts for 19.78%, mobile peripherals accounts for 9.31%, and storage accounts for 6.83%.

Figure: Illustration of GreenLink Technology’s main products, source: prospectus

UGREEN's sales model mainly adopts a combination of online and offline models to achieve global sales, among which online sales are the main sales model. From 2021 to 2023, the online revenue of UGREEN's main business accounted for 78.14%, 75.98% and 74.77% respectively. The main online sales platforms are Amazon, JD.com, Tmall, AliExpress, Shopee and Lazada. The total revenue of the six platforms in the reporting period accounted for 98.31%, 97.12% and 95.96% of the company's online sales revenue respectively.

In terms of overseas sales, the proportion of overseas revenue to the main business revenue in 2021-2023 was 46.09%, 44.91% and 50.39% respectively.

Overseas sales markets mainly include Europe, America, Southeast Asia and other countries and regions, accounting for 83.68%, 80.09% and 78.22% of overseas sales revenue during the reporting period, which are the main countries and regions for overseas sales. In 2023, the company's sales revenue in the United States and Europe accounted for 7.55% and 16.88% of its main business revenue respectively.

The consumer electronics industry in which UGREEN is located is in a period of rapid development. According to Statista data, the global consumer electronics industry market size reached US$940.4 billion in 2018. The global consumer electronics industry market size has shown an overall steady growth trend, reaching US$1051.6 billion by 2023, and is expected to grow to US$1176.7 billion in 2028. The market size is huge and there is ample room for development in the industry.

Figure: 2018-2028 Global Consumer Electronics Industry Market Size and Forecast, Source: Statista, Prospectus

According to Statista data, in 2019, the scale of my country's consumer electronics market was US$244.3 billion, and it will grow to US$245.5 billion in 2021. The market size is huge. my country's consumer electronics industry is huge, and with technological progress, industrial innovation, and the bottoming out of demand for smartphones and PCs, the industry still has room for growth. It is expected that by 2028, my country's consumer electronics industry will rise to US$255 billion.

The company's market share of expansion docks and audio and video products are both ranked fifth in the world and first in China; its mobile phone data cable products are ranked eighth in both the world and China. If the shipment share of mobile phone manufacturers such as Samsung, Apple, and Huawei is excluded, the company's market share rises to second in the world.

In terms of finance, GreenLink Technology's revenue in 2021-2023 will be 3.446 billion yuan, 3.839 billion yuan and 4.803 billion yuan, respectively, with an average annual compound growth rate of 18.05%. In terms of net profit, it will achieve 297 million yuan, 327 million yuan and 388 million yuan in the same period, with an average annual compound growth rate of 14.3%.

In the latest reporting period, UGREEN recorded operating income of 1.284 billion yuan in Q1 2024, a year-on-year increase of 27.06%; and realized a net profit attributable to the parent company of 102 million yuan, a year-on-year increase of 10.44%. According to the company's management's preliminary forecast, the company's operating income from January to June 2024 is expected to increase by 25.19% to 30.62% year-on-year, and net profit is expected to increase by 6.16% to 11.50% year-on-year.

According to data from the Choice financial client, UGREEN Technology's debt-to-asset ratio is 24.16%, and its debt ratio after excluding pre-sales accounts receivable is 23.3%, so the debt repayment pressure is not great.

The main purpose of the funds raised by Greenlink Technology is to invest in product research and development and industrialization construction projects, intelligent warehousing and logistics construction projects, headquarters operation center and brand construction projects, and to supplement working capital. The actual controller of the company is Zhang Qingsen, who directly holds 50.3019% of the company's shares.

The P/E ratio of UGREEN Technology is 24x, while the P/E ratios of comparable companies in the same industry, such as Anker Innovations and ACG, are both 26.5x.

03

The third IPO of the “supermarket godfather”, Metro Supply Chain’s second foray into Hong Kong stocks

According to the Hong Kong Stock Exchange, Wumart Supermarket's supply chain company, Metro Supply Chain, has submitted its application for a second time, seeking to be listed in Hong Kong. The joint sponsors are UBS Group and China Merchants Securities International.

Metro Supply Chain Co., Ltd. is China's leading provider of food and fast-moving consumer goods supply chain solutions. It is committed to providing safe and high-quality goods and efficient and convenient solutions to corporate and institutional customers and retailers, mainly including food service and distribution solutions, welfare gift solutions and retailer distribution solutions.

According to Frost & Sullivan, Metro is the first company in China to introduce international quality assurance standards into China's food and fast-moving consumer goods supply chain industry. All stores under the Metro brand have passed the third-party HACCP certification.

Its unique Star Farm System integrates international food safety standards into a highly transparent traceability system. Since 2007, the Star Farm System has covered more than 6,000 SKUs. As of the end of 2023, it has provided quality assurance training to more than 4,700 farms and factories and more than 1,000 suppliers seeking to register their products in the system.

Metro Supply Chain has strategically laid out a nationwide logistics network, including two central distribution centers, 16 regional distribution centers, four fresh food processing centers and 100 local fulfillment centers, with a total construction area of ​​approximately 501,600 square meters.

Private brands are also a highlight of Metro's supply chain. Since the launch of Metro AG's private brands in 2001, it has laid out a differentiated private brand portfolio, mainly including Ike and Mai Zhenxuan. As of the last filing date, the private product portfolio includes more than 2,300 SKUs.

Metro Supply Chain also has an advantage in the range of goods it supplies, which it purchases from the world's selected countries of origin or through well-known distributors. Metro Supply Chain's product portfolio includes more than 3,700 imported SKUs from 58 countries and regions.

Figure: Metro Supply Chain Corporate Vision, Source: IPO Prospectus

Metro Supply Chain provides these customers with comprehensive food and fast-moving consumer goods supply chain solutions, including product procurement, warehousing, distribution and after-sales services, to meet their diverse business needs. During the Track Record Period, all business lines of Metro Supply Chain served more than 971,000 customers.

Figure: Supply Chain Business Diagram, Source: Prospectus

Metro Supply Chain mainly provides product distribution and supply chain services for Wumart Group's Metro stores, Wumart supermarkets and convenience stores, etc. The company is highly dependent on major customers, with revenue from major customers accounting for 63.7%, 64.7% and 64% in the past three years, respectively.

According to Frost & Sullivan statistics, Metro Supply Chain is currently China's largest group catering supply chain solution service provider, China's second largest commercial welfare and gift solution service provider, China's second largest retail supply chain solution service provider and the largest supermarket supply chain service provider in terms of sales.

According to Frost & Sullivan, China's food and fast-moving consumer goods supply chain industry is in a stage of rapid development, with the market size increasing from RMB 7,036.6 billion in 2018 to RMB 9,900.7 billion in 2023, and is expected to continue to grow in the next few years. The market is highly fragmented and the competition is fierce, so the industry has strong plasticity in the future.

Figure: Scale of the FMCG supply chain industry, Source: Frost & Sullivan, prospectus

In terms of finance, Metro Supply Chain's revenue has exceeded RMB 20 billion for three consecutive years, but has declined year by year. The revenue in 2021, 2022 and 2023 will be RMB 27.82 billion, RMB 27.102 billion and RMB 24.858 billion respectively, mainly due to the decrease in revenue from retailer distribution solutions and welfare gift solutions.

The profit margin level is not ideal. The gross profit margin has increased slightly year by year, from 9.1% in 2021 to 10.7% in 2023, but the adjusted net profit margin is not high, at 0.4%, 1.5% and 1.7% respectively.

At the same time, the company is under great debt pressure. As of the end of 2023, the net cash and cash equivalents were only 527 million yuan, of which the total current assets were 8.428 billion yuan, the total current liabilities were 12.802 billion yuan, and the current ratio was less than 1. One of the main purposes of listing financing is to alleviate the pressure of working capital.

The largest shareholder of Metro Supply Chain is Zhang Wenzhong, the founder of Wumart Group and the "supermarket godfather". This is also his third IPO project. Zhang Wenzhong holds approximately 73.31% of the company's equity through several intermediate entities controlled by him. (Author: Bangge, Source: IPO Jinbang, Jinduan's IPO and Financial Report Think Tank)

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