Core Viewpoint - The article discusses the potential risks and irregularities surrounding the IPO of Xinqiang Electronics, particularly focusing on the significant cash dividends, stock incentives for the new general manager, and complex related party transactions that may undermine the company's independence and financial health [2][4][10]. Group 1: IPO and Financial Maneuvers - Xinqiang Electronics has received approval for its IPO, with the Yu family holding over 95% of the shares [2][4]. - Prior to the IPO, the company distributed a cash dividend of 181 million yuan, which is over 80% of its net profit for the past two years [2][7]. - The new general manager received stock incentives valued at approximately 420 million yuan, raising questions about the appropriateness of such compensation [6][7]. Group 2: Accounting and Valuation Concerns - The company transferred shares at a price significantly lower than its fair value, leading to a valuation increase of nearly eight times within a month [5][6]. - Xinqiang Electronics did not follow proper accounting treatment for stock incentives, which could lead to a substantial reduction in net profit in the future [5][6]. Group 3: Related Party Transactions - The company heavily relies on sales to joint ventures, with related party sales accounting for significant portions of its revenue [10][12]. - The profit margins for related party sales are considerably lower than those for external sales, raising concerns about profitability [10][11]. - The company's business model may effectively turn it into a contract manufacturer for its joint ventures, limiting its growth potential [12][13]. Group 4: Market Position and Risks - Xinqiang Electronics faces challenges in maintaining growth, with a significant portion of its revenue tied to the storage sector and a high dependency on Taiwanese customers [14][14]. - The company’s revenue growth has stagnated, with a reported decline of 0.13% year-over-year in 2024, contrasting sharply with the double-digit growth of its peers [14][14].

Core Viewpoint - Xinqiang Electronics' IPO application for the Growth Enterprise Market is facing challenges due to weak growth prospects, with revenue growth stagnating and a significant mismatch between revenue and net profit growth [1][3]. Financial Performance - Revenue for Xinqiang Electronics from 2022 to 2024 is projected to be 869 million, 1 billion, and 999 million yuan, with year-on-year growth rates of 15.13%, -0.13% respectively [3]. - Net profit for the same period is expected to be 84.98 million, 132 million, and 168 million yuan, with year-on-year growth rates of 55.26% and 27.45% [3]. Revenue Quality - The company relies heavily on joint venture income, which accounts for approximately 17.29% of total revenue, and trade revenue, which exceeds 10% [6][10]. - The revenue growth quality is under scrutiny, as the company’s revenue compound annual growth rate (CAGR) is only 7%, falling short of the required growth metrics for the IPO [5]. Industry Context - The global PCB market is projected to reach a total output value of 73.565 billion USD in 2024, with a stable growth forecast of 5.2% CAGR from 2024 to 2029 [4]. - The PCB industry is characterized by intense competition, with many manufacturers and a low concentration ratio, which may pose challenges for Xinqiang Electronics in maintaining market share [7]. Corporate Governance - Xinqiang Electronics is a family-controlled business, with the controlling family holding 95% of the shares, raising concerns about governance and investor value [8][9]. - Recent share transfers within the family for employee incentives were conducted at a price of 2.80 yuan per share, suggesting a valuation of approximately 12.85 billion yuan for the company [8].