A company is currently applying for an IPO on the Beijing Stock Exchange. The company, Zhejiang Desuo Technology Co., Ltd., with the stock abbreviation Desuo Technology (874669.NQ), has Guotai Haitong Securities Co., Ltd. (601211.SH) as its sponsor, with Deng Kunpeng and Li Huan serving as the designated sponsor representatives.
The company's main business involves manufacturing cordless power tools, specifically including products like electric hammers and electric picks. These are primarily used in areas such as building construction, road construction, and interior decoration, all sectors closely tied to real estate and infrastructure. Despite potential headwinds in these industries, data indicates that Desuo Technology has not experienced a downturn. Instead, it has shown consistent year-over-year profit growth and thriving operations, which is quite notable.
The primary reason for this resilience lies in its successful expansion into international markets. Desuo's client base includes well-known domestic and international power tool brands such as Positec Group and ADEO. Furthermore, its largest client, Suzhou Yingweilai, sells products in over 100 countries worldwide, with a particular focus on emerging economies along the "Belt and Road" initiative. This has directly driven procurement from Desuo Technology, helping to ensure stable and growing performance, which is a strong showing.
Consequently, Desuo Technology's capacity utilization rate has remained at saturated levels, consistently exceeding 100% in recent years. This data suggests that the primary challenge facing the company is how to expand its production capacity. For this IPO, the main fundraising project proposed by Desuo Technology is the "Technical Renovation Project for Adding an Annual Production Capacity of 3.5 Million Sets of Intelligent Integrated Tools." The total planned investment is nearly 250 million yuan. The prospectus specifically discloses that this project aims to "expand production for the company's existing main business, ultimately achieving an additional annual output of 3.5 million sets of electric tools such as hammers and picks."
However, from an information disclosure perspective, there are questions regarding this major project. The core issue is that this is a "technical renovation project," implying it is an improved version based on an already existing "New Annual Production of 3.5 Million Sets of Intelligent Integrated Tools Production Line" project. The key question is whether this additional 3.5 million units of capacity is a result of the renovation itself or was inherent to the original project.
It is important to note that among Desuo Technology's pre-IPO construction-in-progress projects is the "Annual Production of 3.5 Million Sets of Intelligent Integrated Tools Production Line Construction Project." Construction on this project began as early as 2021. However, by the end of the first half of 2025, after three and a half years, the project was still not completed, with the construction progress reported at only 65%. Projecting based on this pace, completion seems unlikely even by the year after next.
Is the slow progress due to funding constraints? For other companies, that might be the case, but it likely isn't for Desuo Technology. Notably, as of the end of the first half of 2025, Desuo Technology still held time deposits totaling 160 million yuan.
This detail suggests that Desuo Technology may not be particularly proactive in advancing this major project, which appears somewhat inconsistent with the picture painted in the prospectus of saturated capacity utilization and high demand exceeding supply.
Furthermore, attention is drawn to a report published in November 2021 by "China Blue News" – not a small自媒体 but an official news platform under the Zhejiang Radio and Television Group. The report was titled "Total Investment of 1.02 Billion Yuan! Production Base for Annual Output of 3.5 Million Intelligent Integrated Tools Officially Commences Construction."
The report mentioned that on November 17th, the project base for Desuo Technology's Annual Production of 3.5 Million Sets of Intelligent Integrated Tools Production Line, identified as a major provincial industrial project and part of the National Forestry and Grassland Equipment Technology Innovation Park, officially commenced construction. The report stated the project was located in Chengxi New District, Yongkang City, with a total investment of 1.02 billion yuan, covering 105 acres and involving a construction area of 210,000 square meters.
The contradiction lies in the fact that the "Annual Production of 3.5 Million Sets of Intelligent Integrated Tools Production Line Construction Project" disclosed in Desuo Technology's prospectus has a budget of only 350 million yuan. Even adding the 250 million yuan technical renovation project proposed in this IPO, the total falls far short of the 1.02 billion yuan figure mentioned in the earlier news report.
Regarding whether Desuo Technology's prospectus contains inaccurate disclosures about the investment amount for this major project, or if the media report was incorrect, a definitive conclusion cannot be drawn; this is a matter that should be verified by the sponsor representatives.
It is noteworthy that one of the sponsor representatives for Desuo Technology's current IPO application, Li Huan of Guotai Haitong Securities, has a relevant background. According to the Sponsor Report, he was previously responsible for or involved in IPO projects for companies including Powerwa Co.,Ltd. (ST Powerwa, 688184.SH), Glen Ralph, Ruihu Mould, and Zhenai Meijia.
Public information shows that Powerwa Co.,Ltd. listed on the SSE STAR Market in September 2022. Following an on-site inspection by the Zhejiang Securities Regulatory Bureau, it was discovered that ST Powerwa had issues including inflating operating revenue, under-provisioning for inventory depreciation, and inflating construction-in-progress, leading to inaccurate information disclosure in periodic reports such as the 2023 annual report and the 2024 first-quarter report.
Li Huan served as the sponsor representative for Powerwa Co.,Ltd.'s IPO and during its ongoing supervision period. He ceased serving in this role due to personal job changes only in February 2024, meaning his tenure at the company largely coincided with the period of its financial irregularities.
Subsequently, a decision announced by the Shanghai Stock Exchange on June 21, 2024, titled "Decision to Issue a Regulatory Warning to Sponsor Representatives Li Huan and Zhang Zhifu," stated that Li Huan, as one of the sponsor representatives designated by Haitong Securities for the IPO application of Wuhan Glen Ralph Intelligent Technology Co., Ltd. on the STAR Market, had failed to adequately fulfill his sponsorship duties in the sponsorship work, leading to the decision to take regulatory measures against him.
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