Torrens Precision Manufacturing (Jiangsu) Co., Ltd. is set to have its IPO application reviewed by the Shenzhen Stock Exchange's listing committee on April 24. Founded in 2017 and recognized as a national-level "Little Giant" enterprise specializing in niche sectors, the company's journey from application acceptance to this review meeting took only 116 days.
A notable development occurred just before the IPO filing. Liu Zhihua, the brother-in-law of the company's actual controller, Qian Ke, began transferring his equity holdings in September 2023 and completed a full exit by May 2025. Through three separate transactions, Liu divested his entire stake, realizing total proceeds of 645 million yuan. Compared to his initial investment cost of 22.4752 million yuan, this represents a profit of approximately 623 million yuan in less than three years, yielding a nearly 30-fold return on investment.
While the broader market for precision metal components in China is projected to reach 620 billion yuan, with significant potential for import substitution in semiconductor equipment parts, competition is intensifying. Leading players are leveraging their technological, financial, and client advantages to capture larger market shares.
Torrens is a key domestic supplier in the precision metal components sector, focusing on providing critical process and structural components for semiconductor equipment, with business extending into the laser equipment field. The company's products are deeply integrated into equipment from leading domestic semiconductor manufacturers such as NAURA and AMEC, being used in core processes including etching and thin-film deposition. It is considered a vital link in the domestic semiconductor equipment supply chain.
According to its prospectus, Torrens experienced explosive revenue growth from 2023 to 2025, with sales increasing from 291 million yuan to 720 million yuan, representing a compound annual growth rate of 57.39%. Revenue in 2024 alone surged by 109.94% year-over-year.
However, the company's profitability has been volatile. Net profit attributable to shareholders was 15.3047 million yuan in 2023, soared to 106 million yuan in 2024, but then declined by 6.96% to 98.1756 million yuan in 2025. The decrease in non-GAAP net profit was even steeper, falling by 7.44% year-over-year. This pattern of rising revenue without corresponding profit growth persisted into the first quarter of 2026, where revenue increased by 15.37% year-over-year, but non-GAAP net profit fell by 9.46%.
The company's profitability metrics have also faced pressure. Its comprehensive gross margin was 23.26% in 2023, rose to 29.89% in 2024, but then fell to 27.14% in 2025, a decrease of 2.75 percentage points from the previous year. This level remains significantly below the industry average, which is consistently above 30%.
For its IPO, Torrens aims to raise 1.156 billion yuan. The planned allocation includes 880 million yuan for a smart manufacturing project for precision components, 76.6157 million yuan for an R&D center construction project, and 200 million yuan to supplement working capital.
A deep dive into the prospectus reveals a significant risk: an extreme reliance on major customers. From 2023 to 2025, sales to the top five customers accounted for 89.70%, 93.44%, and 92.73% of total primary business revenue, respectively. Specifically, sales to the largest customer, NAURA, constituted 44.06%, 52.11%, and 45.64% of revenue, while the second-largest customer, AMEC, contributed 30.23%, 31.40%, and 35.68%. Combined, these two clients represented over 81% of total revenue.
The company acknowledges that revenue from NAURA is expected to remain a high proportion of sales for the foreseeable future, and its reliance on AMEC is increasing annually. A critical point of concern is that Torrens's contract with NAURA is reportedly set to expire at the end of 2026, and the renewal outcome is uncertain.
Although the company attributes high customer concentration to the nature of the semiconductor industry, a comparison with peers shows Torrens's dependency is notably higher. For instance, Focused Photonics and Pioneer Precision have customer concentration levels around 60% and 70%, respectively. This high dependency on a few powerful clients likely limits Torrens's bargaining power within the supply chain, which is a probable factor behind its persistently lower-than-average gross margins.
Consequently, Torrens exemplifies a "tied-growth" model. Its expansion has been almost entirely driven by increased procurement from its two primary clients, NAURA and AMEC. Its growth "moat" appears to be based more on client relationships than on formidable technological barriers. While this strategy facilitated rapid growth during the initial phase of import substitution, it also represents a fundamental vulnerability for future development.
Furthermore, positioning itself as a "hard tech" company targeting the ChiNext board, Torrens claims technological innovation as its core strategy, mastering three core processes, with over 98% of its revenue derived from core technologies. However, its R&D investment intensity seems misaligned with this positioning. From 2023 to 2025, R&D expenses as a percentage of revenue were 3.97%, 3.84%, and 4.44%, respectively. These figures are notably lower than the industry average and also below the R&D expenditure ratios of peers like Focused Photonics and Pioneer Precision, which have maintained rates above 5% since 2022.
Industry experts suggest that Torrens's long-term success will depend on its ability to build sustainable technological barriers and genuine customer loyalty under the "import substitution" narrative, moving beyond mere reliance on major clients. This transition will be crucial for the company to navigate industry cycles and evolve from a "Little Giant" into an industry leader.
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