In 1995, 38-year-old Bao Liangqing resigned from his position as a sales manager and founded Dandong Dongfang CeKong Technology Co., Ltd. (hereinafter referred to as Dongfang CeKong), starting with mineral processing automation and embarking on an exploration journey in the field of mine intelligence. This choice not only contributed to the high-quality development of Chinese mining enterprises but also became a turning point in the life of his 11-year-old son, Bao Caiyi.
Growing up under the influence of his father, Bao Caiyi gradually developed an interest in mine intelligence. In 2006, the 26-year-old Bao Caiyi became the deputy general manager of a Dongfang CeKong subsidiary. Despite majoring in English in university, he naturally assumed the role of International Business Department Head at Dongfang CeKong five years later. In 2019, at the age of 35, Bao Caiyi entered the core management team as the company's Deputy General Manager; at 38, he became a shareholder of Dongfang CeKong through a capital increase.
Three years after Bao Caiyi became a shareholder, Dongfang CeKong launched a sprint towards the Sci-Tech Innovation Board, becoming the first enterprise in the history of Dandong City, Liaoning Province, to apply for an IPO on this board.
Dongfang CeKong is a typical family-run business. Although Bao Liangqing and his son Bao Caiyi collectively hold only 18.98% of the shares, they actually control 87.18% of the voting rights. A series of personnel changes at Dongfang CeKong just before submitting the application are particularly意味深长.
The 68-year-old Bao Liangqing stepped down from the general manager position he had held for nearly 30 years, retaining only the role of chairman. However, he did not pass the position to Bao Caiyi, but instead handed it over to the former deputy general manager, Zhao Hongtao. Zhao Hongtao joined Dongfang CeKong as a sales manager and worked his way up to general manager.
It was noted that after Fan Deri, one of the company's founders, stepped down from the vice chairman position in June 2013, the vice chairman role at Dongfang CeKong appears to have remained vacant for a long time.
Dongfang CeKong's origins can be traced back to December 1995, when Chang Xueying and Dandong Commerce & Trade jointly invested 1.68 million yuan to establish the joint venture CeKong Limited. However, within the contractually agreed period, neither party fully paid in their capital contributions, with a total paid-in registered capital of only 657,000 yuan, representing a mere 39.11% of the intended amount.
Subsequently, CeKong Limited underwent a capital increase, raising its registered capital to 10 million yuan and introducing Yanjiang CeKong (now renamed: Dongfang CeKong Group Company). It wasn't until July 18, 2002, that the three shareholders fully paid up the 10 million yuan in capital contributions.
The early capital operations of CeKong Limited led to flaws in its historical evolution, including shareholders failing to fully pay in capital on time, debt-to-capital conversions conducted without undergoing appraisal procedures, and failure to contribute capital using the methods approved by the competent authorities.
On March 6, 2002, Dandong Commerce & Trade transferred 31.00% and 23.00% of its equity to Yanjiang CeKong and Chang Xueying, respectively. Two days later, the three parties increased capital in CeKong Limited according to their respective shareholding ratios.
According to the approval from the competent authorities at the time, Chang Xueying's new capital contribution of 4.263 million yuan was sourced from profit converted into capital, Dandong Commerce & Trade's contribution was 200,000 yuan in cash and 1.9 million yuan from profit conversion, and Yanjiang CeKong's contribution was 2.1 million yuan in cash and 900,000 yuan in physical assets. However, in the actual contribution methods, 80,000 yuan from Dandong Commerce & Trade and 550,000 yuan from Yanjiang CeKong were debt-to-capital conversions.
More notably, the debt-to-capital conversions by Dandong Commerce & Trade and Yanjiang CeKong were not subjected to appraisal procedures at the time. It was not until 2025 that Dongfang CeKong commissioned Liaoning Yuanzheng Asset Appraisal Co., Ltd. to conduct a retrospective appraisal of these debt-to-capital conversions, issuing the Yuanzheng Ping Bao Zi [2025] No. 353 "Asset Appraisal Report." The report stated that the fair value of the debts used for capital contribution by Dandong Commerce & Trade and Yanjiang CeKong was not underestimated, confirming that their debt-to-capital contributions were fully到位.
After completing the full payment, Dandong Commerce & Trade, Chang Xueying, and Yanjiang CeKong held 21%, 31%, and 48% of the shares respectively. However, during the equity changes over the next decade or more, Dandong Commerce & Trade and Chang Xueying exited, and Yanjiang CeKong was renamed Dongfang CeKong Group Company.
In April 2013, when CeKong Limited was wholly transformed into a joint-stock company, Dongfang CeKong Group Company, Bao Liangqing, and Fan Deri held 99%, 0.5%, and 0.5% of the shares respectively. This shareholding structure persisted until September 2022, when Dongfang CeKong conducted its first capital increase during the reporting period. Besides the original shareholders, Bao Caiyi, son of Bao Liangqing, subscribed for newly added registered capital of 4.69566 million yuan with a monetary contribution of 4.69566 million yuan.
Immediately afterwards, Dongfang CeKong conducted two more capital increases, completing three rounds of capital expansion within three months. Besides introducing employee持股 platforms Dandong Haocheng and Dandong Hengtai at a price of 10.67 yuan per unit of registered capital, it also added external investors Zijin Zidi and Jiangxi Copper. Consequently, the company's valuation increased 28-fold within three months.
Reportedly, the capital increase price for Zijin Zidi and Jiangxi Copper was 25.81 yuan per unit of registered capital, resulting in a post-investment valuation of 2.3 billion yuan. This capital increase occurred in December 2022, whereas Bao Caiyi's capital increase cost in September was only 1 yuan per unit of registered capital. This capital increase was also the only external equity financing disclosed in Dongfang CeKong's prospectus, dating back three years.
It is worth mentioning that when introducing Zijin Zidi and Jiangxi Copper, Dongfang CeKong's controlling shareholder agreed on special rights clauses such as repurchase rights with them. On December 2 and 4, 2025, they signed the "Special Rights Clause Termination Agreements" respectively. If Dongfang CeKong fails to successfully list before December 2028, the relevant repurchase clauses will automatically regain effect, with such effectiveness追溯 to the effective date of the relevant investment agreements.
Zijin Zidi and Jiangxi Copper are indirectly wholly-owned subsidiaries of Jiangxi Copper Group and Zijin Mining Group Company Limited respectively, the latter being customers of Dongfang CeKong. Jiangxi Copper Group is also a supplier to Dongfang CeKong.
In the first half of 2025, Jiangxi Copper Group and its affiliates had sales of 13.9204 million yuan and purchases of 6.9518 million yuan with Dongfang CeKong, ranking as the fourth largest customer and the second largest supplier respectively.
Quite unexpectedly, after the completion of this external capital increase, Dongfang CeKong's performance fluctuated, with 2022 becoming the peak performance year within the reporting period.
Dongfang CeKong is a high-tech enterprise that provides intelligent online detection and analysis equipment, intelligent control systems, intelligent equipment, and related intelligent services for global non-ferrous metal mines, ferrous metal mines, coal mines, cement, metallurgy, wind power, petrochemicals, and their upstream and downstream enterprises. Its main products include intelligent online detection and analysis equipment, intelligent control systems, intelligent equipment, and professional technical services for intelligent manufacturing provided to customers.
Since 2022, Dongfang CeKong has undertaken several major landmark intelligent mine projects, including the Tibet Yulong Copper Mine, Tibet Julong Copper Mine, Shougang Boron Iron, and Dexing Copper Mine. It is the only domestic enterprise that has mastered neutron activation online detection and analysis technology and achieved scaled industrialization, realizing the domestic substitution of high-end elemental online detection and analysis equipment.
In 2025, its intelligent online detection and analysis equipment was applied in the world's largest copper mine – BHP's Escondida Copper Mine. In the same year, it undertook the intelligent mine construction project for the world's largest greenfield iron ore mine – the Simandou Iron Ore Mine in Guinea.
During the reporting period covering 2022, 2023, 2024, and the first half of 2025, Dongfang CeKong achieved operating revenues of 603 million yuan, 521 million yuan, 567 million yuan, and 211 million yuan, respectively. The corresponding net profits were 92.5769 million yuan, 74.7799 million yuan, 73.0851 million yuan, and 4.3047 million yuan.
Revenue declined year-on-year in 2023. Although it recovered somewhat in 2024, it still did not reach the 2022 level. Revenue for the first half of 2025 was only 37.21% of the full-year 2024 revenue. Net profit declined for two consecutive years in 2023 and 2024. The net profit for the first half of 2025 was only 5.89% of the full-year 2024 net profit. The comprehensive gross profit margins for the respective periods were 42.10%, 39.16%, 41.29%, and 37.91%, with 2022 also being the highest level during the period.
The mine intelligence industry in which Dongfang CeKong operates is technology-intensive. In the context of globalization, its supply chain and sales markets are global. In terms of sales, the proportion of overseas revenue in its total revenue for each period was 1.29%, 3.23%, 2.73%, and 7.96%, respectively. In terms of procurement, some raw materials required for its production and operations, such as radioactive sources and sodium iodide probes, are mainly sourced from overseas suppliers.
It is worth noting that during the period, Dongfang CeKong had significant related-party sales and significant related-party purchases, although the proportions were relatively low. The major sales counterparts were Shougang Boron Iron, Baoxin Smart Mine, and Shanghai Zhizhi. The total related-party sales as a percentage of main business revenue for each period were 0.46%, 4.36%, 4.93%, and 1.26%, respectively.
The major procurement counterpart was Shanghai Zhizhi. The procurement amount as a percentage of total procurement was 2.05%, 6.30%, 2.89%, and 3.41%, respectively. From 2023 to the first half of 2025, it was the first, second, and fifth largest supplier, mainly supplying functional components and equipment.
Dongfang CeKong holds 45% and 45% equity stakes in Shanghai Zhizhi and Baoxin Smart Mine, respectively, and maintains long-term equity investments in them. In 2024, Dongfang CeKong received a cash dividend of 4.5 million yuan from Shanghai Zhizhi, while incurring procurement costs of 7.3819 million yuan from it during the same period. The investment income for Dongfang CeKong in each period of the reporting period was 2.7658 million yuan, 12.6895 million yuan, 4.6457 million yuan, and 5.1858 million yuan, respectively.
Dongfang CeKong's accounts receivable scale continued to climb, with the book balance at the end of each period being 317 million yuan, 282 million yuan, 359 million yuan, and 367 million yuan, accounting for 52.53%, 54.21%, 63.32%, and 87.09% (annualized) of the current period's operating revenue, respectively. During the same period, there were also contract assets of 68.3249 million yuan, 51.9765 million yuan, 54.4705 million yuan, and 51.5094 million yuan pending recognition.
As of December 15, 2025, the amount of payments collected as a proportion of the combined book balance of accounts receivable and contract assets at the end of each period was 84.17%, 69.26%, 54.51%, and 24.34%, respectively.
Dongfang CeKong stated that its relevant customers are mainly large central state-owned enterprises, local state-owned mining groups, etc., which have strong financial strength and good credit, maintain good cooperative relationships with the company, and pose relatively low risks for accounts receivable recovery. The company also mentioned that the scale of payments collected in the first half of the year is usually lower than in the second half.
However, affected by accounts receivable bad debt losses, Dongfang CeKong recorded credit impairment losses of -15.5504 million yuan, -1.7588 million yuan, -5.5363 million yuan, and -11.4392 million yuan for each period.
As sold products failed to be recognized as revenue or booked as revenue in a timely manner, Dongfang CeKong's inventory scale has also remained high, occupying a large amount of working capital. Dongfang CeKong's main products adopt a "production-to-order" model, organizing production based on customer order demands. At the end of each period, the book balance of its inventory was 337 million yuan, 338 million yuan, 300 million yuan, and 327 million yuan, respectively.
In terms of composition, its inventory mainly consists of raw materials and work in progress, with work in progress consistently accounting for over 85%. This is primarily due to customized production, processing, and debugging, with some projects being large in scale and having long production cycles.
Dongfang CeKong admitted that if raw material prices fluctuate significantly, or signed contract orders change, causing the net realizable value of the company's inventory to decline, the company may face increased risks of inventory write-down losses, which would adversely affect its operating performance.
For each period of the reporting period, its inventory write-down provisions were 7.0657 million yuan, 7.9385 million yuan, 6.6349 million yuan, and 8.3814 million yuan, respectively. The provision ratio for inventory write-downs was slightly higher than the industry average of 1.13%, 1.17%, 2.04%, and 1.54%.
Affected by inventory write-down losses, contract fulfillment cost impairment losses, and contract asset impairment losses, Dongfang CeKong incurred asset impairment losses of -4.4091 million yuan, -1.7738 million yuan, -3.2150 million yuan, and -3.0528 million yuan for each period.
Under the dual pressure of inventory and accounts receivable, Dongfang CeKong's working capital turnover is under strain. In the first half of 2025, the net cash flow from operating activities turned negative, showing an outflow of 29.203 million yuan, compared to inflows of 29.233 million yuan, 24.1984 million yuan, and 79.1225 million yuan in 2022, 2023, and 2024, respectively. As of June 30, 2025, its cash and cash equivalents stood at 50.7477 million yuan, accounting for only 5.58% of its current assets.
During the period, Dongfang CeKong continuously engaged in accounts receivable financing and used bill endorsements and transfers to pay supplier invoices to alleviate turnover pressure. At the end of each period, the book value of its financing from accounts receivable was 8.9634 million yuan, 30.7308 million yuan, 25.1501 million yuan, and 9.8416 million yuan, respectively. Consequently, the scale of notes receivable decreased significantly in 2024.
Currently, Dongfang CeKong's listing structure has formed a diversified equity structure with Dongfang CeKong Group Company as the absolute controlling shareholder, employee持股 platforms binding the core team, and external institutional investors providing resource support. Among them, Dongfang CeKong Group Company directly holds 68.07% of the shares and is the controlling shareholder. Eight out of the nine directors on Dongfang CeKong's board are nominated by Dongfang CeKong Group Company.
Besides directly holding 15.06% of the shares, Bao Liangqing and Bao Caiyi also indirectly control 72.12% of the voting rights through their control of Dongfang CeKong Group Company, Dandong Hengtai, and Dandong Haocheng, resulting in combined control over 87.18% of the voting rights, making them the actual controllers. They are also the actual controllers of Dongfang CeKong Group Company, serving as chairman and director, respectively.
Besides directly holding 5.27% of Dongfang CeKong's equity, Fan Deri is also the vice chairman of Dongfang CeKong Group Company, holding 21.54% of its equity. Zijin Zidi and Jiangxi Copper each hold a 4.34% stake.
Based on the issuance of no more than 29.70 million new shares, accounting for no less than 25% of the total share capital after issuance, and fundraising of 1.1 billion yuan, Dongfang CeKong's valuation is approximately 4.4 billion yuan, an increase of 91.30% compared to the valuation three years ago.
After the full completion of this new share issuance, the proportion of voting rights controlled by Bao Liangqing and Bao Caiyi will decrease to 65.38%, but their status as actual controllers will not change.
According to his resume, Bao Liangqing was born in 1957 and graduated with an Executive Master of Business Administration from Dalian University of Technology. Before founding Dongfang CeKong, he worked as a sales manager at Dandong Jingangshan Applied Technology Co., Ltd. for over three years.
After the establishment of Dongfang CeKong, he served as both general manager and chairman for nearly 30 years. He stepped down as general manager in June 2025 and currently serves as the company's chairman.
It was noted that Bao Liangqing did not pass the general manager position to Bao Caiyi, but instead chose Deputy General Manager Zhao Hongtao. Zhao Hongtao, born in 1975, is an alumnus of Dalian University of Technology like Bao Liangqing. He joined Dongfang CeKong in 2003, successively holding positions as sales manager of the Engineering Department II, Deputy Head of Sales, Head of Sales, Marketing Director, and Assistant General Manager. He served as Deputy General Manager of the company in June 2013 and was promoted to General Manager in July 2025.
Bao Caiyi was born in 1984 and graduated from Dalian University of Foreign Languages with a major in English. At the age of 26, he joined Dongfang CeKong's wholly-owned subsidiary Beijing Xuhong as Deputy General Manager. He later served as International Business Department Head, Director, and Deputy General Manager. At 38, he became a direct shareholder of Dongfang CeKong through a capital increase. He has served as Deputy General Manager since July 2019 and assumed the role of Vice Chairman in July 2025. He currently holds the positions of Vice Chairman and Deputy General Manager.
In 2024, the compensation/allowances received by Bao Liangqing and Bao Caiyi from the company were 969,700 yuan and 711,400 yuan, respectively, totaling 1.6811 million yuan. Zhao Hongtao received 740,600 yuan, slightly higher than Bao Caiyi.
Appendix: List of Intermediary Institutions for Dongfang CeKong's IPO Sponsor: Guotai Haitong Securities Co., Ltd. Accounting Firm: Rongcheng Certified Public Accountants (Special General Partnership) Law Firm: Beijing D&H Law Firm Appraisal Institution: Liaoning Yuanzheng Asset Appraisal Co., Ltd.
Comments