Mingnayang Intelligent Technology (Jiangsu) Co., Ltd. (referred to as "Mingnayang") recently submitted application documents for public share transfer and listing. Subsequently, its Beijing Stock Exchange listing advisor, Hengtai Changcai Securities, filed for tutoring registration with the Jiangsu Bureau of the China Securities Regulatory Commission.
During the reporting period (2023, 2024, and January-July 2025), Mingnayang demonstrated solid performance levels. However, recent results show signs of "revenue growth without corresponding profit growth" and declining gross margins. Industry insiders suggest that a key challenge for Mingnayang is enhancing its pricing power with core clients to maintain gross margin levels while sustaining revenue growth.
Sales to BYD Company Limited have decreased year by year. Public information shows that Mingnayang has long focused on the R&D, design, production, and sales of intelligent production equipment and production lines for new energy flat-wire drive motors, gradually expanding into the R&D, production, and sales of motor component products.
Mingnayang's products primarily include intelligent motor production equipment and production lines, as well as motor component products. The intelligent production equipment and production line business mainly provides customers with intelligent production equipment and lines for stators and rotors, primarily for new energy flat-wire motors. The motor component products business involves supplying stator and rotor component products for drive motors.
During the reporting period, Mingnayang's operating revenues were 245.6548 million yuan, 331.2207 million yuan, and 177.0825 million yuan, respectively. Revenue from its main business amounted to 245.4977 million yuan, 327.5726 million yuan, and 176.0133 million yuan, respectively.
Revenue from the intelligent motor production equipment and production line business reached 181.4534 million yuan, 257.2766 million yuan, and 127.5510 million yuan, accounting for 73.87%, 77.68%, and 72.03% of operating revenue, respectively. Revenue from the motor component products business was 64.0443 million yuan, 70.2959 million yuan, and 48.4623 million yuan, accounting for 26.07%, 21.22%, and 27.37% of operating revenue, respectively, showing a steady growth trend.
Significant fluctuations in sales to major client BYD Company Limited have drawn attention from investors and the exchange. Information indicates that Mingnayang established a cooperative relationship with BYD in 2018, entering its supply system. As BYD's business scale expanded, the cooperation grew, making Mingnayang a primary supplier of drive motor stator production lines for BYD.
From 2023 to 2024, Mingnayang's reliance on BYD clients was particularly notable: in 2023, BYD clients contributed 74.15% of the company's sales revenue, which declined to 57.58% in 2024. By January-July 2025, this proportion fell to 2.39%.
In its response to the inquiry letter, Mingnayang attributed this to three factors: first, the company is gradually implementing a customer diversification strategy to reduce reliance on a single client; second, BYD adjusted its operational plans based on its business development needs and market expectations; third, most new orders from BYD clients are still in the execution phase and have not yet met revenue recognition conditions.
Mingnayang stated that the reduction in sales to BYD reflects an optimization of its revenue structure, with overall revenue maintaining stable growth through new client expansion. The proportion of revenue from the top five clients continues to decline, and breakthroughs in diverse application fields such as low-altitude aircraft demonstrate the company's ability to withstand fluctuations in demand from individual clients.
However, overall, Mingnayang's revenue is still primarily contributed by existing clients. The proportion of existing clients during the reporting period was 50.00%, 55.79%, and 67.53%, respectively, with revenue contributions of 94.87%, 85.15%, and 84.95%. Notably, Mingnayang disclosed in its inquiry response report that "as of the end of the reporting period, the company had orders on hand exceeding 450 million yuan," but the average execution cycle for its main projects is 22-23 months. Industry insiders point out that there is a significant time lag between acquiring new clients and their revenue contribution, and whether this lag will cause substantial fluctuations in performance remains to be seen.
Gross margins declined in 2025. In terms of profitability, Mingnayang's gross margins also showed significant fluctuations during the reporting period.
The comprehensive gross margins were 38.15%, 41.39%, and 31.56%, respectively, while the gross margins for the main business were 38.14%, 41.85%, and 31.75%, respectively. The gross margins for the intelligent motor production equipment and production line business were 44.00%, 45.25%, and 32.86%, respectively. For the motor component products, the gross margins were 21.53%, 29.42%, and 28.81%, respectively.
Regarding the 12.39 percentage point drop in the gross margin for the intelligent production equipment and production line business in January-July 2025 compared to 2024, Mingnayang explained that this was mainly due to lower gross margins on some projects obtained through public bidding. To better penetrate the central enterprise client market, the company participated in public bidding and won projects with more competitive pricing, resulting in lower gross margins for such projects.
Compared to industry peers, Mingnayang's gross margins for its intelligent production equipment and production line business were relatively high during the reporting period, higher than those of Haosen Intelligent and Bozhong Precision, but lower than Shangshui Intelligent. Furthermore, the company's gross margin advantage over Bozhong Precision, which was over 10 percentage points in 2023 and 2024, narrowed to a similar level by January-July 2025.
Mingnayang acknowledged that as an early entrant into the intelligent equipment field for new energy flat-wire motors, it initially focused on leading automotive manufacturers in the new energy vehicle sector. With fewer participants in the niche segment, the company secured orders with relatively high gross margins. Fluctuations in gross margins during the reporting period were mainly influenced by the complexity of customer requirements and the intensity of market competition for its customized production lines.
Mingnayang stated that pricing adjustments for specific public bidding projects with clients like Zhixin Technology Co., Ltd. and Hunan CRRC Commercial Vehicle Power Technology Co., Ltd. were short-term strategies and would not lead to sustained downward risks in gross margins.
Concurrently, Mingnayang highlighted related risks in its public transfer prospectus: gross margins are affected by market competition intensity and customer bargaining power. Significant adverse changes in industry policies, market competition, or raw material prices could impact the company's profitability.
Revenue increased without profit growth in 2025, and inventory levels remained high. Notably, Mingnayang disclosed post-reporting period performance in its response materials to demonstrate continuous revenue growth. In 2025, the company achieved operating revenue of 398.1341 million yuan, an increase of approximately 20% compared to 2024. However, net profit was 68.0015 million yuan, a decrease of about 5% from 71.7809 million yuan in 2024. Industry insiders noted that Mingnayang exhibited "revenue growth without profit growth" in 2025, and whether its future profitability can improve remains subject to market verification.
With adjustments to its pricing strategy, Mingnayang's inventory turnover ratio also improved. During the reporting period, due to accelerated project execution, improved inventory delivery efficiency, and faster cost recognition driven by revenue growth, the company's inventory turnover ratios were 0.63 times/year, 0.78 times/year, and 0.50 times/year (annualized at 0.86 times/year), respectively.
Mingnayang acknowledged facing significant inventory risks. Due to the high customization, long order completion cycles, and high value of individual production lines and equipment in its intelligent motor production equipment and production line business, the value of inventory from ongoing projects (work in progress, finished goods, and goods in transit) was substantial at each period-end.
The public transfer prospectus shows that the book balance of inventory at each period-end was 252.9810 million yuan, 245.2599 million yuan, and 235.3436 million yuan, accounting for 46.72%, 45.84%, and 46.03% of current assets, respectively, indicating relatively high inventory levels. Work in progress, finished goods, and goods in transit constituted 92.27%, 93.65%, and 91.52% of the total inventory balance, representing the majority.
Cumulative inventory impairment provisions during the reporting period were 5.2259 million yuan, 14.4333 million yuan, and 14.9547 million yuan, accounting for 2.07%, 5.88%, and 6.35% of the inventory balance, respectively, showing an upward trend. Mingnayang stated that failure to effectively strengthen inventory management could lower the inventory turnover ratio, increase working capital requirements, and adversely affect daily operations.
Additionally, Mingnayang's operating cash flow situation requires further observation. Net cash flow from operating activities during the reporting period was -4.4211 million yuan, -3.4660 million yuan, and 100.2434 million yuan, respectively. The significant positive turnaround in January-July 2025 was primarily due to the maturity and settlement of digital debt instruments like "Dilian" held at the end of 2024, which reduced receivables financing by 86.8291 million yuan and significantly increased cash received from selling goods and providing services. Market observers note that Mingnayang's receivables are heavily influenced by client payment schedules and repayment speeds, and whether its cash flow will experience significant fluctuations due to external repayment timing needs further verification over time.
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