Summary of Feiyada's Conference Call Company Overview - **Company**: Feiyada - **Year Established**: 1987 - **Main Business**: Watch manufacturing, precision technology, and smart wearables - **2024 Revenue**: Approximately 4 billion CNY (around 570 million USD) - **2024 Net Profit**: 285 million CNY (around 40 million USD) - **Key Region**: South China contributes 47% of revenue [2][3] Core Business Segments - **Watch Business**: - Self-branded watches (Feiyada) account for about 20% of total sales - Swiss luxury watch sales constitute approximately 70% of total sales - Property leasing contributes about 3.3% [3] - **Precision Manufacturing**: - Focus on precision gears and reducers, especially in aerospace applications - Recent acquisition of PROPDO, a leading manufacturer in this field [2][4][5] Strategic Initiatives - **Acquisition of PROPDO**: - Aimed at accelerating development in precision manufacturing - PROPDO specializes in small modulus gears and reducers, with applications in aerospace and robotics - The acquisition is seen as a strategic move to enhance technical capabilities and market reach [2][4][5][6] - **Future Focus**: - Emphasis on both watch business and precision manufacturing as key growth areas - Expectation for PROPDO to maintain growth in line with macroeconomic trends, particularly in civil aviation projects like C919 [2][4][8] Financial Performance and Projections - **Historical Performance**: - PROPDO has shown stable revenue and profit growth in recent years - Future revenue growth may be impacted by fluctuations in aerospace projects [5][6] - **Long-term Outlook**: - Feiyada anticipates that precision manufacturing will become a significant revenue driver over the next 10 to 20 years [5][6] Market Dynamics - **Consumer Market Influence**: - Feiyada's brand holds significant influence in the Chinese market - Confidence in the long-term prospects of the watch market despite short-term fluctuations due to economic conditions [7] - **Smart Wearables**: - The company is actively developing smart wearable technology, with the "Extreme Fox" brand being a highlight [2][29] Competitive Landscape - **Swiss Watch Market**: - Feiyada ranks second among Swiss watch distributors in China, with a significant market share [24] - Competitors include major brands like Rolex and Omega, with average customer spending ranging from 20,000 to 30,000 CNY [25][26] Challenges and Considerations - **Market Volatility**: - The aerospace sector has shown performance volatility, which may affect future revenue [19][21] - **Talent Acquisition**: - Challenges in attracting high-end talent in certain regions, but efforts are being made to bolster the workforce [9][12] Conclusion - **Strategic Direction**: - Feiyada is committed to expanding its precision manufacturing capabilities while maintaining a strong presence in the watch market - The acquisition of PROPDO is a pivotal step in this transformation, aiming for synergy and enhanced market competitiveness [10][18]

Core Viewpoint - Xipuni Precision Technology Co., Ltd. is attempting to navigate a challenging financial landscape characterized by fluctuating gold prices and high inventory levels while exploring new growth avenues through smart watch products [1][2][4]. Financial Performance - In 2022, the company's revenue was 324 million yuan, with a net profit of 25 million yuan. In 2023, revenue increased to 445 million yuan, and net profit doubled to 52 million yuan. However, in 2024, revenue slightly rose to 457 million yuan, while net profit decreased to 49 million yuan [2]. - The average selling price of gold watches rose from 2,064 yuan to 3,083 yuan in 2023 due to soaring international gold prices, but this led to a significant drop in sales volume in the first half of 2024, which fell to 53,000 units, a decrease of 30,000 units compared to the same period [2]. - The cost structure reveals that gold accounts for over 80% of total material costs, resulting in a gross margin consistently hovering between 20% and 25%, significantly lower than competitors like Ebolu and Guancheng, which have gross margins close to 50% [2]. Inventory and Liquidity Issues - Inventory turnover days increased from 457 to 680 days, with inventory reaching 638 million yuan, nearly 1.4 times the company's annual revenue. Cash on hand was only 37 million yuan, indicating liquidity pressure [2]. - The top three distributors contributed 65.7% of revenue, with payment cycles extending from 3 days to 30 days, highlighting high customer concentration and weakened bargaining power [2]. Strategic Initiatives - To address growth limitations in its core gold business, the company launched a series of smart gold watches in 2023, priced between 1,999 and 2,699 yuan, aiming to position itself as a "Huawei smart gold watch alternative" [3]. - The smart product initiative has shown initial success, generating 6.2 million yuan in revenue from a limited edition smart watch set designed for a leading Chinese liquor brand in 2024 [3]. - However, smart watch revenue accounted for only 6.3% of total revenue in the first half of 2024, with sales of 10,000 units, indicating a significant gap compared to traditional gold watch sales [3]. Market Outlook - The gold watch market in China was valued at 28.1 billion yuan in 2023, with an expected growth to 44.4 billion yuan by 2028, reflecting a compound annual growth rate of 9.58%. However, gold watches represent less than 3.4% of the overall watch industry [3]. - The company plans to enhance production capacity and establish a research center in Putian while also seeking to expand into overseas markets, including the Middle East, through partnerships with Malaysian distributors [3]. Capital Market Sentiment - The company's valuation increased from 500 million yuan in 2016 to 773 million yuan in 2024, a growth of 54.6% over seven years, which is significantly lower than the 8.71 times valuation increase of its competitor, Laopuyin [4]. - The capital path designed by the Li family reflects the common challenges faced by Chinese precious metal manufacturing companies, where gold provides value but also constrains valuation [4].

Core Viewpoint - The article discusses the IPO plans of Xipuni Precision Technology Co., Ltd., which aims to list on the Hong Kong Stock Exchange, highlighting its position as a leading manufacturer of gold watches in China and its recent innovations in smart gold watches [2][3]. Group 1: Company Overview - Xipuni was established in 2013 and operates as a designer, manufacturer, and brand owner of precious metal watches, primarily generating revenue through its flagship brand "HIPINE" [2]. - The company has two main watch brands under its OBM business model: the core brand "HIPINE" and the sub-brand "Jinxiong," with over 10,000 SKUs in its product portfolio as of December 31, 2024 [2]. - According to Zhaosheng Consulting, Xipuni is the largest gold watch brand and the largest foot gold watch brand in China, holding market shares of 24.98% and 35.83% respectively [2]. Group 2: Revenue Streams - In addition to its OBM business, Xipuni also generates income as an ODM manufacturer for third-party domestic jewelry brands, developing and producing private label precious metal watches and accessories [3]. - Notable ODM clients include well-known brands such as Laofengxiang and China Jewelry, with a stable supply relationship established [3]. - A limited edition smart watch gift set designed for a leading Chinese liquor brand contributed approximately 6.2 million yuan in revenue in 2024 [3]. Group 3: Product Innovation - Xipuni is recognized as the first company in China to design and manufacture foot gold watches and to apply supermolecular hard gold technology in their production [4]. - The company launched China's first mass-produced foot gold watch in 2014 and introduced a new series of smart gold watches equipped with Huawei's smart chip in 2023, reflecting a growing trend in the market [4]. Group 4: Financial Performance - Xipuni's revenue for the years 2022 to 2024 was 324 million yuan, 445 million yuan, and 457 million yuan respectively, while net profits for the same period were 25 million yuan, 52 million yuan, and 49 million yuan [4]. Group 5: IPO Fund Utilization - The net proceeds from the IPO will primarily be used to enhance production capacity, strengthen research and development capabilities, expand and optimize the sales network, and improve brand influence and recognition [5].

Group 1 - The 2025 ISO/TC 114 Watch Standardization International Conference opened in Zhangzhou, Fujian Province, China, with over 80 experts, scholars, and industry representatives discussing the future of global watch standardization [1][3] - The conference, lasting five days, is themed "Standards Empowering, Watch City, Global Integration," and aims to promote Zhangzhou's watch industry and accelerate its transformation towards intelligence, greenness, and high-end development [3][4] - ISO/TC 114, an important body within the International Organization for Standardization, focuses on standards related to watch manufacturing and has seen China actively participate since 1979 [3][4] Group 2 - China has successfully released three international standards for clocks and will propose two new projects during the conference to contribute to the global watch industry's standardization process [4] - Zhangzhou is recognized as a key node in the Maritime Silk Road and has developed into the world's largest production base for pointer-type quartz clocks, with an annual output value exceeding 7 billion RMB [4] - The city accounts for over 60% of the global production of pointer-type quartz clock movements, 90% of certain clock components, and approximately 30% of finished clocks in the global market [4]