Yongli Precision Manufacturing Co., Ltd. from Zhejiang has met the issuance, listing, and information disclosure requirements, as announced in the results of the 33rd review meeting of the Beijing Stock Exchange (BSE) listing committee on March 30, 2026. The official announcement was brief, with the review opinion section simply marked with a single character indicating "none."
Behind this seemingly uneventful approval, however, lie significant regulatory concerns. The only question raised during the meeting regarding the company's operational sustainability prompts serious doubts. With declining revenue, heavy customer reliance, and a dominant family control structure, questions arise about whether the review committee exercised undue leniency or turned a blind eye to evident risks.
First, the company's performance has reversed abruptly just before its listing. After a period of growth between 2022 and 2024, including a 22.15% year-on-year revenue increase and a 56.26% surge in non-GAAP net profit in 2023, the situation deteriorated sharply in 2025. Revenue fell by 3.90% in the first half of the year and dropped further to 5.40 billion yuan for the full year, down 4.87% year-on-year. Forecasts for the first quarter of 2026 indicate revenue may decline by 7.56% to 11.56%, with non-GAAP net profit expected to drop by 8.02% to 16.42%. While full-year 2025 net profit increased by 15.03%, this was achieved amid falling revenue, indicating profit growth without corresponding sales expansion—a trend unlikely to persist if raw material costs rebound.
Second, Yongli Precision faces a high dependency on its major client, Byd Company Limited. Sales to the top five customers surged from 63.07% to 78.73% of total revenue during the reporting period. Byd Company Limited alone accounted for 27.21% of revenue in the first half of 2025, up from just 3.54% in 2022. To secure orders, Yongli Precision accepted lower prices and extended payment terms, resulting in毛利率 below its average. Byd Company Limited's payment model, involving a two-month credit period plus six-month acceptance of commercial drafts, has led to a sharp rise in receivables. As of June 2025, receivables from Byd Company Limited stood at 119 million yuan, including 96.46 million yuan in drafts, straining the company's cash flow. Its accounts receivable turnover ratio of 2.43 in 2024 lagged behind the industry average of 2.82, highlighting liquidity risks.
Third, corporate governance is dominated by the founding family. Wang Xinghai, along with his three daughters and two sons-in-law, controls 95% of the voting rights. The company's articles of association stipulate that in case of disagreement among them, the opinion of Wang Xiaoyuan, Mr. Wang's daughter, shall prevail. Family members occupy four of the nine board seats and hold key management positions, raising concerns about internal controls and potential harm to minority shareholders. The BSE had previously questioned the impact of this concentrated ownership on governance, and overlaps with related parties in customer and supplier networks further heighten risks of fund misuse or unfair transactions.
Fourth, the fundraising purpose appears questionable. The company aims to raise 380 million yuan to expand production of chassis system pipes and automotive steering column systems. However, capacity utilization rates were low in the first half of 2025, with heat treatment and precision pipe processing at only 61.57%. Expanding amid idle capacity suggests the move may be driven by listing motives rather than genuine need. If new capacity remains underutilized, annual depreciation costs of approximately 33.70 million yuan could erode already thin profits.
In conclusion, while Yongli Precision passed the review, it faces significant challenges including slowing performance, customer concentration, governance issues, and doubtful expansion plans. The ease of passing the meeting contrasts with the difficulties ahead in registration and post-listing performance. Investors should exercise caution, as the company's ability to deliver returns remains highly uncertain.
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