Hengdao Technology, a company applying for an IPO on the Beijing Stock Exchange, has raised significant questions regarding the accuracy of its disclosed information. The company, formally known as Zhejiang Hengdao Technology Co., Ltd. and trading under the stock abbreviation Hengdao Technology (874202.NQ), has Guotai Haitong Securities Co., Ltd. (601211.SH) as its sponsor, with Lu Qi and Wu Shaochao serving as the designated representatives.
Public records indicate that Hengdao Technology's primary product is the hot runner system, a core heating component system used in molds for injection molding with hot runner technology. These systems are widely applied in automotive lighting, interior and exterior automotive trims, and consumer electronics. The company's downstream clientele includes major firms such as BYD Company Limited (002594.SZ), Gree Electric Appliances, Inc. of Zhuhai (000651.SZ), and Changzhou Xingyu Automotive Lighting Systems Co., Ltd. (601799.SH), with no single customer accounting for more than 10% of sales, indicating no significant client dependency.
Regarding financial performance, while Hengdao Technology's current operational scale is not massive—with revenue just over 200 million yuan in 2024—its profitability is notably strong. The company boasts a gross profit margin exceeding 50% and a net profit margin approaching 30%, figures that are exceptionally rare within the manufacturing sector.
Growth metrics are also impressive, with both revenue and net profit achieving double-digit growth in recent years. Notably, the net profit attributable to shareholders for the first quarter of 2025 has already surpassed 60 million yuan, exceeding the full-year 2022 figure by more than 20%.
An interesting detail emerged in January 2025, during the critical IPO application phase, when Hengdao Technology replaced its Board Secretary. The role, previously held concurrently by the CFO Tang Jianping, was assumed by Hong Junjie.
The appointment of Hong Junjie as the head of information disclosure during this crucial period is noteworthy. Prior to joining Hengdao Technology, he served as Business Director at the Shanghai No. 16 Department of Investment Banking at Minsheng Securities. Public records show that Hong was also a project team member for Longchen Technology's (833243.NQ) IPO application in June 2023, a project that has yet to achieve a successful listing.
A significant point of contention exists within Hengdao Technology's information disclosures. Despite its client list featuring several large corporations, Hengdao's own operational scale remains modest, and its suppliers are even smaller in size.
In its response to regulatory inquiries, the company disclosed that regulators had pointed out: "During the reporting period, several of the issuer's major suppliers, such as Jiangsu Shengzhuoyu Mold Technology Co., Ltd., Ningbo Economic & Technical Development Area Tiancheng Mold Material Co., Ltd., Hangzhou Longwei Hydraulic Technology Co., Ltd., Keyu Precision Industry (Suzhou) Co., Ltd., and Shaoxing Shangyu Mingliang Copper & Aluminum Tube Factory, exhibited characteristics including small operational scale, low paid-in capital, and a small number of social security contributors—sometimes even zero."
Specifically addressing this, regulators requested that Hengdao Technology and its sponsor, Guotai Haitong Securities, explain the "reasons for the small operational scale, low paid-in capital, and small number of social security contributors among major suppliers, and the rationale and reasonableness of the issuer's procurement from them."
Among these, "Jiangsu Shengzhuoyu Mold Technology Co., Ltd." was highlighted. This entity was Hengdao Technology's second-largest supplier in 2024 and its largest supplier in the first half of 2025, primarily supplying steel with procurement amounts reaching 6.1254 million yuan in 2024. Hengdao Technology disclosed that this supplier had a registered capital and paid-in capital of 10 million yuan, with 50 employees and social security contributors.
However, data queried from the National Enterprise Credit Information Publicity System tells a completely different story. According to the system's 2024 annual report, while Jiangsu Shengzhuoyu Mold Technology Co., Ltd.'s registered capital and subscribed capital are indeed 10 million yuan, its paid-in capital was zero as of the end of 2024. Furthermore, the social security information indicated only 5 contributors—merely one-tenth of the number disclosed by Hengdao Technology.
The information publicized by the National Enterprise Credit Information Publicity System, operated by the State Administration for Market Regulation, is generally considered highly accurate and authoritative. The critical question remains: does Hengdao Technology, along with its sponsors Lu Qi and Wu Shaochao from Guotai Haitong Securities, share this view?
If they do, how do they explain the substantial discrepancy between the information disclosed in their regulatory response and the data published by the National Enterprise Credit Information Publicity System? To pose a more serious question: is this a case of Hengdao Technology, in concert with Guotai Haitong Securities, fabricating disclosure information, or is it an error within the national system itself? The answer is not clear, and the explanation must ultimately come from Hengdao Technology and Guotai Haitong Securities.
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