Dingtai Gaoke (301377.SZ) has officially launched its Hong Kong public offering, intending to issue 12.632 million H shares globally, with a maximum offering price of HK$380 per share. It is expected to list on the main board of the Hong Kong Stock Exchange on July 9.
It has been noted that although the company's performance has grown steadily in recent years, the risk of a singular product structure cannot be ignored, with PCB drill bits accounting for over 60% of revenue. Meanwhile, the company's grinding and polishing materials face pressure from declining product prices and gross margins, and its functional film materials are being sold at a loss. Behind this Hong Kong IPO, the company's cash on hand cannot cover its short-term borrowings, let alone support its ambitious 5-billion-yuan expansion plan. Furthermore, at this critical juncture before the IPO, the controlling shareholder family's actions of cashing out at high prices through an employee shareholding platform have raised market concerns.
Pressure on Capital Structure and High-Price Cash-Out by Controlling Shareholders
Public information shows that Dingtai Gaoke's products include precision cutting tools, grinding and polishing materials, functional film materials, and intelligent CNC equipment, primarily used in PCB, 3C, and precision machinery manufacturing.
The prospectus indicates that the IPO proceeds will mainly be used to advance domestic and international production capacity layout, a comprehensive digital and intelligent operation system construction project, supplement working capital, and for general corporate purposes.
It has been noted that behind this Hong Kong IPO push, the company's short-term solvency is under pressure. In March of this year, amid strong downstream market demand, the company proposed an expansion plan to invest 5 billion yuan in building an intelligent manufacturing headquarters base in Dongguan, focusing on the R&D and production of micro drill bits, high-end industrial cutting tools, and high-performance film materials.
Considering the financial situation, as of the end of the first quarter of 2026, Dingtai Gaoke had monetary funds and financial assets at fair value through profit or loss totaling 803 million yuan, while its short-term borrowings were 806 million yuan. The cash on hand not only fails to cover short-term debt but is also insufficient to support the construction of the 5-billion-yuan expansion project. Against this backdrop, the company aims to list in Hong Kong to raise funds and alleviate financial pressure.
However, just before this Hong Kong IPO, the share reduction by Dingtai Gaoke shareholders has drawn market attention. On June 5, the company announced that Taiding Venture, an acting-in-concert party of the actual controller, transferred 10.2853 million of its shares, representing 2.5% of the company's total shares, through an inquiry transfer method.
The transfer price was 270.55 yuan per share. Compared to the closing price of 395.91 yuan per share on the announcement date, this price represents a discount of approximately 30%. Taiding Venture cashed out a substantial 2.783 billion yuan from this round, with a total of 29 institutional investors receiving allocations, and the lock-up period for the transferred shares is six months.
It should be noted that Taiding Venture is an employee shareholding platform of Dingtai Gaoke. The company's actual controller Wang Xin, her brother Wang Junfeng, elder brother Wang Xuefeng, and spouse Lin Xia all indirectly hold company shares through this platform. In other words, the controlling shareholder family of Dingtai Gaoke all profited from this inquiry transfer.
Looking at the secondary market performance, since June this year, boosted by the PCB concept, Dingtai Gaoke's stock price surged, reaching a historical high of 666 yuan per share intraday on June 22. As of the close on July 3, the company's stock price was 518.04 yuan per share, with a cumulative increase of over 270% year-to-date. Therefore, the actions of the controlling shareholder family—cashing out at high prices with one hand while pursuing Hong Kong financing with the other—have raised market questions.
Singular Product Structure and Insufficient High-End Transformation
In recent years, although Dingtai Gaoke's performance has shown year-on-year growth, underlying concerns remain. Specifically, from 2023 to 2025, Dingtai Gaoke's operating revenues were 1.295 billion yuan, 1.553 billion yuan, and 2.084 billion yuan, respectively; annual profits were 219 million yuan, 227 million yuan, and 432 million yuan, respectively. Both revenue and net profit have risen, and this growth trend continued into the first quarter of 2026.
By product segment, precision cutting tools, as the company's revenue pillar, generated revenue of 1.74 billion yuan last year, contributing over 80% of the company's income. Among these, PCB drill bits were the main revenue source for the precision cutting tools business, with annual revenue of 1.376 billion yuan, accounting for 79% of the precision cutting tools business revenue and 66% of total revenue.
It should be pointed out that with the explosive growth of AI servers, drill bit products are gradually evolving from traditional white bits to mainly coated drill bits and micro-drills, with hole diameters developing below 0.25mm and aspect ratios above 30:1. As a leader in the mid-to-low-end PCB market, Dingtai Gaoke's advantage lies mainly in its mass delivery capability for general specification drill bits of 0.1mm–0.3mm.
Although the company has achieved technological breakthroughs in micro-diameter, high-aspect-ratio, and high-end coated drill bits, as of 2025, the sales proportion of micro-drills of 0.20mm and below was 29.65%, and the sales proportion of coated drill bits was 39.4%. This means that currently over 70% of the company's sales come from products below the micro-drill level, and over 60% from non-coated products. The revenue scale of the company's high-end products still needs further improvement.
It has been noted that apart from precision cutting tools, the operating revenue scale of the company's other three product categories remains small, making it difficult for them to shoulder significant revenue responsibility in the short term. With PCB drill bits contributing over 60% of revenue, the risk of a singular product structure for Dingtai Gaoke cannot be overlooked.
Specifically, in 2025, the revenues for Dingtai Gaoke's grinding and polishing materials, functional film materials, and intelligent CNC equipment products were 192 million yuan, 73.6855 million yuan, and 76.789 million yuan, respectively, accounting for 9.2%, 3.5%, and 3.7% of total revenue. The year-on-year changes were 27.61%, -52.51%, and 39.89%, respectively. Among these, the performance of functional film materials was poor, with revenue nearly halved.
It has been noted that the company's grinding and polishing materials products experienced a situation of increased volume but decreased price, while the functional film materials products are being sold at a loss. In 2025, the average selling price for grinding and polishing materials was 668.25 yuan per unit, a year-on-year decrease of 0.3%; the product gross margin was 58.9%, a year-on-year decrease of 2.6 percentage points.
The price decline for Dingtai Gaoke's functional film materials was significant, with an average selling price of 11.2 yuan per unit, a year-on-year decrease of 52.14%. The company stated this was mainly due to shortages of some upstream raw materials, which affected its sales mix and created temporary downward pressure on product pricing.
Simultaneously, due to increased unit sales costs, increased unit sales costs for automotive light control film, the product still being in the initial mass production stage in 2025 and not yet achieving economies of scale, and other factors, the company's functional film materials product gross margin turned negative year-on-year, at -7%.
It has been noted that as revenue grew, Dingtai Gaoke's accounts receivable and notes receivable also climbed, increasing from 720 million yuan in 2023 to 1.221 billion yuan in 2025, with the proportion to total revenue for the period rising from 54.55% to 58.59%. By the end of the first quarter of 2026, the company's accounts receivable and notes receivable further increased to 1.431 billion yuan. Meanwhile, the company's inventory scale increased from 580 million yuan at the beginning of the year to 812 million yuan.
The simultaneous increase in inventory and accounts receivable has impacted the company's cash flow. In the first quarter of 2026, the net cash flow from operating activities was -47.7611 million yuan, a significant year-on-year decrease of 450.21%.
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