Venture(US:VEMLY) Xin Lang Cai Jing·2025-12-15 12:49Core Viewpoint - Chengdu Hongming Electronics Co., Ltd. has received approval for its IPO application on the Shenzhen Stock Exchange, marking a significant step towards entering the capital market and raising expectations for a potential revival of the company [1][10]. Company Overview - Hongming Electronics, established in 1958 and transformed into a joint-stock company in 2000, specializes in the research, production, and sales of electronic components, particularly passive components [3][4]. - The company has over 60 years of experience in electronic component production and technology validation, with products widely used in defense, aerospace, consumer electronics, and new energy vehicles [3][4]. IPO Details - The company plans to raise 1.951 billion yuan (approximately $274 million) through its IPO, with funds allocated for the industrialization of high-energy pulse capacitors and the production of new electronic components and integrated circuits [3][12]. Historical Context - Hongming Electronics originated from the 715 Factory, a key project under China's First Five-Year Plan, and has a rich history tied to the development of Chengdu's electronic industry [4][13]. - The transformation of the original factory site into a commercial complex, SM Plaza, reflects the broader industrial evolution in the region [5][14]. Financial Performance - The company has experienced a decline in revenue and net profit from 2022 to 2024, with projected revenues of 3.146 billion yuan, 2.727 billion yuan, and 2.494 billion yuan, and net profits of 476 million yuan, 412 million yuan, and 268 million yuan respectively [6][15]. - Research and development expenditures have also decreased, with R&D expenses of 294.88 million yuan, 256.72 million yuan, 208.13 million yuan, and 91.23 million yuan from 2022 to the first half of 2025, indicating a downward trend in R&D investment [6][15]. Future Outlook - The company aims to position itself as a leading manufacturer of electronic components and precision parts, focusing on innovation and expanding into new markets such as new energy batteries and automotive electronics [8][17]. - The successful completion of the IPO is seen as a critical opportunity for the company to undergo a transformation and regain its former prominence in the industry [6][15].