Actively withdraw the application! Another company's IPO "failed"

When a company grows to a certain size, it will often complete its capitalization process by going public. However, the road to going public is not always smooth .

Dong'ang Technology's listing was suddenly terminated and it voluntarily withdrew its IPO application!

Recently, after completing the inquiry for listing on the Growth Enterprise Market, Dong'ang Technology suddenly withdrew its application and the listing was terminated .

Shenzhen Stock Exchange said that due to Dongang Technology's application to withdraw its listing application documents, according to Article 62 of the Shenzhen Stock Exchange Stock Issuance and Listing Review Rules, it decided to terminate the review of its initial public offering and listing on the Growth Enterprise Market.

Dongang Technology is mainly engaged in the research and development, production and sales of professional mobile lighting tools. Its business is oriented overseas, and its products are sold to countries and regions such as Europe and North America. At present, Dongang Technology has become a core supplier for many well-known tool companies in Europe and the United States.

It is understood that Dongang Technology 's GEM IPO was accepted on September 30, 2022, and entered the inquiry stage on October 27. Before withdrawing the IPO application, the exchange had sent the second round of review inquiry letter to the company .

Donang Technology originally planned to issue no more than 50 million new shares on the Shenzhen Stock Exchange's Growth Enterprise Market, accounting for no less than 25% of the total share capital after issuance; it originally planned to raise 385 million yuan , of which 255 million yuan would be used for the construction of a high-end professional mobile lighting tool production base, 83.45 million yuan would be used for the research and development center construction project, and 46.694 million yuan would be used for the marketing network construction project.

The sudden termination of this IPO was due to Dong'ang Technology's active withdrawal of its initial public offering application.

Dong'ang Technology did not disclose the reason for its voluntary withdrawal of the IPO application.

However, according to the analysis of industry insiders, there is still a certain gap between the current revenue and performance scale of Dong'ang Technology and its listed competitors Jiuliang Holdings and Ocean King .

Donang Technology (full name: Xiamen Donang Technology Co., Ltd.) was established in 2008. The company is located in Xiamen, Fujian Province. The company is mainly engaged in the research and development, production and sales of professional mobile lighting tools. Its products include folding lights, floodlights, pocket lights, pen lights, long lights, headlights and other series, involving more than 230 models in total. The product layout is quite comprehensive.

Donang Technology mainly targets overseas markets, with overseas revenue accounting for a considerable proportion, and its main markets being Europe and North America.

According to the prospectus data previously disclosed by Dong'ang Technology, from 2019 to 2021 and the first half of 2022, overseas revenue accounted for 99.24%, 99.31%, 98.88% and 93.92% of the company's main business respectively.

Dong'ang Technology's main customers are European and American tool companies such as Snap-on, Benai, and Würth. During the reporting period, the sales revenue of Dong'ang Technology's top three customers accounted for 81.52%, 81.41%, 82.59% and 78.71% respectively . These three customers have become the main source of Dong'ang Technology's revenue.

Judging from the revenue of Dong'ang Technology in the past three and a half years, the growth rate has slowed down significantly, and the net profit even declined at one point.

From 2019 to 2021, Dong'ang Technology's revenue was RMB 239 million, RMB 178 million, and RMB 263 million respectively; net profit was RMB 68.1784 million, RMB 45.5065 million, and RMB 60.62 million respectively; net profit after deducting non-recurring items was RMB 66.54 million, RMB 39.5886 million, and RMB 53.28 million respectively.

Dong'ang Technology 's revenue in the first half of 2022 was 124 million yuan, and its net profit was 24.593 million yuan, with a net profit of 24.224 million yuan after deducting non-recurring items.

Moreover, the gross profit margin of Dong'ang Technology's main business has been declining year by year in the past three years, and the average gross profit margin is significantly lower than the average of its peers Ocean King and Jiuliang Shares . From 2019 to 2021 and the first half of 2022, the gross profit margin of Dong'ang Technology's main business was 44.76%, 41.94%, 36.96% and 34.00% respectively.

Not only is there a certain gap between its revenue and gross profit margin and those of Haiyang Wang and Jiuliang Shares, Dongang Technology's business model is also different from Haiyang Wang and Jiuliang Shares. Dongang Technology's main business model is the ODM model, which is also the "OEM" model. Generally, the company is responsible for the entire process of product research and development, design and production, but the product sales are OEM sales based on the brand specified by the customer.

Because of the ODM business model, Dongang Technology is insufficient in its own brand. Dongang Technology itself has also recognized this and stated in its prospectus that the company has not yet generated sales revenue from its own brand, and there is a certain gap compared with other internationally renowned brands.

Moreover, among the projects that Dong'ang Technology plans to raise funds for this time, there is no plan to increase investment in its own brands.

At the same time, Dong'ang Technology did not pay enough attention to product research and development.

According to the prospectus of Dong'ang Technology, the company owns a total of 213 patents, but only 6 of them are domestic invention patents, while its industry competitor Ocean King has as many as 1,996 invention patents.

At the same time, Dongang Technology also faces the risk of excessive customer concentration. Dongang Technology's main customers are European and American tool companies such as Snap-on, Benai, and Würth. The sales revenue of these three customers accounts for about 80% of Dongang Technology's total revenue. If the cooperative relationship between these customers and Dongang Technology develops and changes in the future, it will have a direct impact on the company's revenue.

In general, if Dong'ang Technology wants to go for an IPO again in the future , it will need to make new adjustments in its business model, product development, and market expansion.

The global LED lighting market will exceed US$100 billion!

In recent years, the LED lighting market has ushered in huge development opportunities.

According to the latest research report on the global LED lighting market released by market research platform Reportlinker , the global LED lighting market is expected to reach US$132.96 billion by 2030. From 2022 to 2030, the compound annual growth rate of the global LED lighting market will reach 10.5%.

An important reason driving the rapid development of the global LED lighting market is the continued rise in consumer demand for energy-saving lighting solutions , especially LED lighting products such as A lamps and T lamps .

LED lighting products are widely welcomed by consumers because they are energy-efficient, generate less heat , have high brightness and are relatively low in cost.

According to TrendForce's analysis report on the global LED lighting market in 2023 , energy-saving renovation projects in Europe, the United States, Japan and other countries will continue to advance in 2023, and the demand for LED products will also usher in rapid growth. Coupled with the full liberalization of the Chinese market, the global LED lighting market will usher in a new stage of development.

At the same time, consumers will pay more attention to quality lighting, healthy lighting and intelligent lighting. Relevant companies can focus on high-demand products and seize market opportunities.

Combined with TrendForce 's analysis data, it is estimated that the global LED lighting market size will reach US$63.8 billion in 2023 .

China is the world's largest producer of LED lighting products , with unparalleled advantages in production capacity. Therefore, more and more LED lighting companies are actively rushing to go public to gain more market opportunities.

However, the road to listing for most companies is not smooth, and the suspension of listing for Dongang Technology is both an opportunity and a challenge . The LED lighting market has room for development, but the competition is also fierce . Whether Dongang Technology can successfully list in the future remains to be seen.

IPO