Core Viewpoint - Delijia Transmission Technology (Jiangsu) Co., Ltd. is facing significant challenges ahead of its IPO, with declining revenues and profits, alongside multiple financial risk warnings, raising concerns about its operational efficiency and market position [1][3][30]. Financial Performance - In 2024, Delijia's revenue was 3.715 billion yuan, a decrease of 16.36% year-on-year, while net profit fell to 534 million yuan, down 15.8% [3][5]. - The company plans to raise 1.881 billion yuan for expansion despite the declining performance [3][26]. Market Position - Delijia achieved a global market share of 10.36% and a domestic market share of 16.22% in 2024, ranking third globally and second in China in the wind power gearbox sector [3][5]. Customer Concentration - The top five customers accounted for 94.73% to 98.86% of sales, with Goldwind Technology and SANY Heavy Industry alone representing over 75% of 2024 sales [6][7]. - This high customer concentration raises concerns about the company's risk management capabilities, especially after a production adjustment by Goldwind led to a significant drop in orders [6][8]. Financial Risk Indicators - Delijia triggered 31 financial risk warning indicators, including a 22.25% drop in inventory turnover and a 25.5% decline in accounts receivable turnover [11][13]. - The company's accounts receivable balance reached 1.488 billion yuan, representing 40% of annual revenue, indicating worsening collection capabilities [13][28]. Related Party Transactions - The sales to related parties, including SANY Heavy Industry and Envision Energy, raised questions about the independence of Delijia's operations, with related party sales accounting for 43.56% of total sales [8][9]. - Concerns were raised regarding the pricing of transactions with related parties, as Delijia admitted to price discrepancies without providing comparable data [8][9]. Operational Efficiency - The efficiency of fixed asset utilization has halved, with revenue per unit of fixed assets dropping from 5.65 in 2022 to 2.71 in 2024 [15]. - Despite a 16.36% revenue decline, prepaid accounts increased by 28.97%, suggesting potential issues with cost recognition or related party fund occupation [15][28]. R&D Investment - Delijia's R&D expenditure was significantly below industry standards, with R&D expense ratios of 1.40%, 2.70%, and 2.73% from 2022 to 2024, compared to the industry average of 5.92% [23][24]. - The company held only 59 authorized patents, far fewer than its competitors, indicating a lack of technological depth [24][25]. Expansion Plans - Despite the challenges, Delijia plans to invest 1.881 billion yuan in two major projects to expand production capacity for wind power gearboxes [26][27]. - The market is facing pressures from the trend of larger wind turbines, which has led to a 25% decrease in gearbox prices over three years [26][30].