Xin Lang Cai Jing·2026-01-08 05:25Core Viewpoint - Guangdong Daoyuan Technology Co., Ltd. (hereinafter referred to as "Daoyuan Technology" or "the company") has submitted an IPO application to the Hong Kong Stock Exchange, with CICC and CITIC Securities International as joint sponsors. The company has experienced a significant revenue increase of 97.29% year-on-year in the first three quarters of 2025, primarily due to its deepening collaboration with BYD. However, this growth has been accompanied by a drastic decline in gross profit margins, particularly in module sales, which have negatively impacted the overall profitability of the company [1][4][20]. Financial Performance - Daoyuan Technology's revenue grew from RMB 366 million in 2023 to RMB 410 million in 2024, representing a year-on-year increase of 12.17%. In the first three quarters of 2025, the company achieved revenue of RMB 474 million, surpassing the total revenue of 2024 [4][20]. - Despite the revenue growth, Daoyuan Technology has been operating at a loss, with adjusted net profits of -RMB 3.46 billion, -RMB 1.82 billion, and -RMB 0.50 billion during the reporting periods. The net cash flow from operating activities was also negative, indicating a cash outflow of -RMB 3.39 billion, -RMB 0.29 billion, and -RMB 3.20 billion [4][20]. Accounts Receivable and Cash Flow - The company's accounts receivable balance increased significantly, reaching RMB 461 million by the end of September 2025, which is a 61.03% increase compared to the end of 2024. The accounts receivable as a percentage of revenue rose to 97.24% in the same period [4][20]. - Operating cash outflows expanded by 7.7 times year-on-year, contradicting the trends of revenue growth and narrowing losses. This indicates a potential liquidity issue for the company [4][20]. Customer Concentration and Dependency - Daoyuan Technology's customer concentration is notably high, with its top five customers accounting for over 88% of total revenue in recent periods. BYD has emerged as the largest customer, contributing RMB 286 million in sales, which is 60.4% of total revenue for the first three quarters of 2025, marking a staggering increase of 706.66% compared to the previous year [10][11][27]. - The reliance on a single major customer like BYD has led to unfavorable terms in negotiations, including extended payment periods, which have further exacerbated the company's cash flow challenges [10][11][28]. IPO and Funding Strategy - Daoyuan Technology has undertaken various measures to alleviate financial pressure, including attracting external investors and applying for bank loans. The upcoming IPO is expected to provide additional liquidity, although the immediate need for funds may not be as pressing as it appears [6][24]. - The company has issued a significant amount of convertible redeemable preferred shares, which introduces a risk of mandatory redemption if certain conditions are met, potentially impacting the company's financial stability [24]. Product and Market Dynamics - The company specializes in high-precision positioning applications, with products including inertial measurement chips, IMU modules, GNSS modules, and integrated navigation systems. These products are utilized across various industries, including automotive, robotics, and smart agriculture [2][18]. - The revenue structure has shifted, with module sales becoming the primary source of income in 2025, accounting for 71.5% of total revenue, despite their low gross profit margin of 18.2%, which has negatively affected the overall gross margin of the company [16][32].