Core Viewpoint - Zhejiang Xinxing Tool Co., Ltd. has received acceptance for its IPO on the Shenzhen Stock Exchange after previously withdrawing its application for listing on the Shanghai Stock Exchange, with plans to raise 560 million yuan primarily for the construction of a digital factory for precision CNC tools [1] Company Overview - Xinxing Tool is a leading domestic manufacturer of hole processing tools, focusing on the research, production, and sales of drilling tools, including annular and solid drilling products [1] Ownership Structure - The company is a typical family-controlled enterprise, with the controlling family holding 92.65% of the shares before the IPO and maintaining a significant control post-IPO [3] - Key family members include Zhu Dongwei (Chairman and General Manager), Zhu Hulin (Director), and others, indicating strong familial ties and influence over company decisions [3] Financial Performance - Revenue for the years 2022 to 2024 was reported as 391 million yuan, 425 million yuan, and 467 million yuan, respectively, while net profits were 172 million yuan, 177 million yuan, and 185 million yuan [8] - The company’s total assets increased from 930.49 million yuan in 2022 to 1.33494 billion yuan in 2024, with equity attributable to the parent company rising from 857.65 million yuan to 1.15087 billion yuan [9] Dividend Policy - The company has a history of significant cash dividends, totaling 432.5 million yuan from 2020 to 2024, raising questions about the sustainability and rationale behind such distributions [4] Compliance Issues - There are noted deficiencies in capital contributions and shareholding changes dating back to the company's establishment, but the company claims these issues have been rectified and do not pose a risk to current shareholders [5][6] Product Concentration and Risks - The company faces risks related to customer concentration, with the top five customers accounting for over 40% of revenue, and the largest customer contributing nearly 30% [9] - The main products are concentrated in drilling tools, particularly annular drills, which accounted for approximately 74% of the main business revenue during the reporting period [10] Profitability Trends - The average selling price of annular drilling products has declined over the reporting period, contributing to a decrease in gross margins, which fell from 57.73% in 2022 to 56.16% in 2024 [11] - The overall gross margin for the company decreased from 58.06% in 2022 to 56.49% in 2024, although it remains above the industry average [11]