HENGTONG TECH.(SZ:300374)2022-12-08 01:22Market Overview - The company is experiencing rapid development, with demonstration projects increasing, but sales in Beijing and Xinjiang are limited by the speed of promotion [1][2] - The market capacity in Xinjiang is significant, but there are challenges with payment collection and longer cycles compared to Beijing [2] - The main competitors are traditional building materials, which are cheaper and have been used for thousands of years, but new materials are gaining traction due to environmental concerns [2][3] Product and Pricing - The overall price of housing products is linked to structural systems, design requirements, and decoration standards, with the cost of main structures generally over 1,000 RMB per square meter [3] - The primary raw materials for walls include PVC and fly ash, with PVC accounting for approximately 50% of production costs [3] Revenue Recognition and Financials - The company has adjusted its revenue recognition policy to reflect operational conditions more accurately, using the percentage-of-completion method for projects over 100 million RMB [3][4] - Payment terms typically require a 30% advance for integrated housing projects, with 70% paid upon completion and acceptance [4] Strategic Expansion - The decision to establish a factory in Xinjiang was based on strategic considerations, including geographical advantages and market capacity [4][5] - The company plans to gradually enter new regional markets through market research, funding, and personnel training [5] International Market Development - Future market expansion will focus on regions such as Africa, South America, Central Asia, and Southeast Asia, with current activities in Liberia, Mongolia, the UK, and Kazakhstan [5] - The company’s products have advantages in overseas markets, including low transportation costs and ease of assembly, which are beneficial in regions with long rainy seasons [5] Growth Strategy - The company aims for growth through a combination of internal development and external expansion, including new product R&D and establishing new production bases [6] - The company primarily targets low-rise buildings but plans to develop new products for high-rise construction to meet developer demands [6][7] Technical Barriers - The company has established technical barriers in material formulation, application technology, and standards, which are crucial for market entry and customer acceptance [7]