Core Viewpoint - Zhigao Machinery is set to launch its initial public offering (IPO) with a price of 17.41 yuan and a price-to-earnings ratio of 14.50 times, aiming to raise approximately 3.74 billion yuan for various projects [1][2]. Group 1: IPO Details - The IPO will have an initial issuance of 21.48 million shares, with 17.19 million shares available for online subscription [1]. - The total share capital after the issuance will be 85.93 million shares, with an option for over-allotment allowing for an additional 3.22 million shares to be sold [1]. - The total funds raised could reach 4.30 billion yuan if the over-allotment option is fully exercised [1]. Group 2: Fund Allocation - The raised funds will be allocated to the construction of a production line for 300 intelligent drilling machines, which will receive an investment of approximately 42.88 million yuan [2]. - An engineering technology research and development center will be established with an investment of 5.77 million yuan [2]. - The company will also allocate 5 million yuan to supplement its working capital [2]. Group 3: Financial Performance - The company’s projected net profits for 2022, 2023, and 2024 are 88.99 million yuan, 104 million yuan, and 105 million yuan, reflecting year-on-year growth rates of 32.93%, 16.31%, and 1.49% respectively [2]. - Key financial metrics for 2024 include total assets of 905.10 million yuan, net assets of 568.87 million yuan, and operating income of 888.44 million yuan [3]. - The company’s return on equity is projected to be 20.35% in 2024, with a net cash flow from operating activities of 163.90 million yuan [4].

Core Viewpoint - Zhejiang Zhigao Machinery Co., Ltd. (Zhigao Machinery) is under scrutiny during its IPO process on the Beijing Stock Exchange after its previous attempt on the Shenzhen Stock Exchange was terminated, raising concerns about the authenticity of its sales revenue and overall growth potential [1][3][19] Financial Performance - Zhigao Machinery has shown moderate growth in operating performance over recent years, with revenues of 8.81 billion, 7.95 billion, 8.40 billion, and 8.88 billion from 2021 to 2024, reflecting a slow growth trend [16] - Domestic sales have declined from 8.50 billion in 2021 to 6.19 billion in 2023, while international sales surged from 189.7 million to 1.89 billion in the same period, indicating a shift towards foreign markets [16] IPO Details - The company plans to raise 3.95 billion for the construction of a high-end drilling rig production line, with a total investment of approximately 3.78 billion for this project [4][10] - The initial fundraising target was 5.36 billion, which was later reduced due to market concerns, reflecting a 26.31% decrease [10][8] Sales Model and Revenue Recognition - Zhigao Machinery employs a mixed sales model, primarily using distributors, which has led to questions about the stability of its customer base and the authenticity of its sales figures [1][16] - The company has faced scrutiny over its revenue recognition practices, particularly regarding the transition of direct sales customers to distributors, which may affect how revenue is reported [17][18] Dividend Distribution - The company has distributed a total of approximately 1.64 billion in cash dividends from 2019 to 2023, raising questions about its financial management, especially when it plans to use part of the IPO proceeds for cash flow supplementation [7][8] Project Investment Concerns - The total investment for the drilling rig production line has seen significant fluctuations, increasing by 1.90 billion over two IPO attempts, which has led to skepticism about the company's financial planning and project viability [5][9] - The company has not provided sufficient justification for the drastic changes in project investment amounts, raising concerns about the rigor of its financial assessments [11][12] Market Position and Competition - The pricing strategy for new products, particularly the intelligent underground drilling rigs, has been questioned due to a significant markup compared to historical prices, with the expected price being approximately 310.83 million per unit, which is about eight times higher than previous averages [14][15] - The company has not adequately substantiated its claims of technological advancements justifying these price increases, leading to further doubts about its competitive positioning in the market [14][15]