Great! Anker's supplier is sprinting towards IPO

For companies that have developed to a certain level , most will choose to go public to accelerate the capitalization process, transform and develop through listing, and thus expand their business blueprint.

3C giant Tongli Technology is heading for IPO

The latest news is that 3C giant Tongli Technology is preparing for an IPO!

Currently, Tongli Technology has been approved by the Shenzhen Stock Exchange Main Board Listing Committee meeting and is preparing to be listed on the Shenzhen Stock Exchange Main Board . The sponsor is Huatai United Securities.

Tongli Technology plans to raise 1.015 billion yuan in this IPO, which will be used for the precision manufacturing technology transformation and upgrading projects of smart products, the construction of the headquarters technology innovation and R&D center, the capacity expansion projects of electroacoustic products and to supplement working capital.

In August 2013 , Tongli Technology was listed on the main board of the Hong Kong Stock Exchange with the stock code 01249.HK .

However, in 2021, Tongli Technology completed its privatization and delisted from the Hong Kong stock market.

In September 2022, Tongli Technology submitted an IPO application in China .

On March 2, 2023, Tongli Technology's Shenzhen Main Board IPO was successfully accepted.

On March 30, 2023, the Shenzhen Stock Exchange issued an inquiry letter to Tongli Technology .

In May 2023, Tongli Technology responded to the relevant questions in the Shenzhen Stock Exchange's inquiry letter.

On June 30, 2023, the Shenzhen Stock Exchange issued another letter of implementation of opinions to Tongli Technology .

Now, Tongli Technology has passed the Shenzhen Stock Exchange Main Board Listing Committee meeting , and is one step closer to listing.

When it comes to Tongli Technology, many people may be unfamiliar with it.

Public information shows that Tongli Technology 's predecessor was TCL Tongli Electronics (Huizhou) Co., Ltd. , which was established by TCL Holdings (BVI) Co., Ltd. in January 2000 with a capital of 16 million yuan. It is mainly engaged in ODM business of speaker products, wearable devices, AIoT products and precision components and accessories.

The company has the ability to vertically integrate the entire manufacturing chain from speakers, wooden boxes, precision mold injection, SMT, assembly and testing , and can provide customers with one-stop intelligent solutions.

Currently, Tongli Technology has 5 manufacturing bases, 5 R&D centers and 2 offices in China, the United States, South Korea and Southeast Asia .

Over the years, Tongli Technology has established solid cooperative relationships with many well-known international and domestic consumer electronics and Internet brand companies, and the group's various products are sold to the global market through its customers.

Tongli Technology started out as a DVD OEM. In the early stages of the company's development, Tongli Technology provided ODM services for DVD products to global brands such as Philips, Sony, Toshiba, Panasonic, LG, etc. , and its shipment volume ranked first in the world at that time.

Later, with the rapid development of the electronics industry and the decline of the DVD industry, Tongli Technology began to transform into acoustic products .

At present, Tongli Technology has reached stable cooperative relationships with companies such as Amazon, Anker Innovations, Harman, Sony, Samsung, Jabra, OPPO, Alibaba, Google, ByteDance, and Lenovo.

In 2020, Anker Innovations ranked as Kone Technology's fifth largest customer, with its main purchased products being wearable devices, with an annual procurement amount of approximately RMB 400 million.

From the perspective of specific product composition, the core product of Tongli Technology is the Tongli speaker . In 2022 alone, the shipment volume of speakers reached 12.4818 million, accounting for 58.65% of revenue.

In addition to speakers, Tongli Technology 's main products also include wearable devices, AIoT products, such as TWS headphones, smart bracelets, smart speakers, smart desk lamps, etc.

Among them, wearable devices have become Tongli Technology's second largest product, accounting for 16.10% of revenue in 2022.

Tongli Technology's third largest product is AIoT products . AIoT products were originally the company's second largest product, but with the decrease in sales revenue, its revenue share in 2022 fell to 11.79%.

According to the prospectus of Tongli Technology , the company 's shipments of Bluetooth speakers, soundbars and other products currently rank first in the world, among which shipments of TWS and other categories have seen counter-cyclical growth.

In 2022, Tongli Technology focused on TWS products with high unit price , obtained incremental orders from customers such as Harman, OPPO, and Jabra, and the sales volume of TWS headphones also doubled, from 1.5502 million in 2020 to 3.6103 million.

In recent years, Tongli Technology has experienced rapid development and its performance has maintained steady growth.

From 2020 to 2022, Tongli Technology's revenue was 8.508 billion yuan, 9.754 billion yuan and 10.031 billion yuan respectively, and the net profit attributable to the parent company's owners was 347 million yuan, 285 million yuan and 372 million yuan respectively . Although the net profit in 2021 fluctuated, it maintained a steady growth trend overall.

In the first half of 2023, Tongli Technology's revenue is expected to be 4 billion yuan to 4.2 billion yuan, a decrease of 12.13% - 16.31% compared with 4.78 billion yuan in the same period of 2022 ; the net profit attributable to the parent company's owners is approximately 180 million yuan to 210 million yuan , an increase of 25.31% - 46.19% compared with 144 million yuan in the same period of 2022 .

As a supplier to major well-known companies, Tongli Technology has great advantages in the supply chain.

KONE Technology has achieved lean and intelligent production on the supply chain side, and has established five manufacturing bases in Huizhou, Beihai and Vietnam. It has global production and manufacturing capabilities and can effectively reduce the risks of trade barriers .

Tongli Technology still faces multiple risk factors

However, there are certain risk factors in the development of Tongli Technology.

The first is over-reliance on individual customers. From 2020 to 2022 , the sales revenue of Tongli Technology's top five customers accounted for 75.18%, 70.03% and 74.38% of the company's main business revenue respectively , contributing more than 70% of the company's revenue in the past three years.

On the other hand, Tongli Technology faces the same problem as many foundries, that is, raw materials, especially core raw materials such as chips, are too dependent on external procurement . Because the company's product patents are mainly concentrated in headphone noise reduction, processing technology, and the Internet of Things . It is understood that Tongli Technology's chips and other raw materials are mainly purchased from semiconductor companies such as MediaTek and Texas Instruments.

The third aspect is that Tongli Technology had previously suffered losses due to product quality issues.

It is understood that in 2022, Tongli Technology's contract losses amounted to 20.7157 million yuan . The main reason is that a batch of products sold by the company had quality problems due to defective chips , which affected the order volume of related products. In addition, the customer subsequently made a product modification plan, but Tongli Technology was unable to cancel the logistics purchase order for the original product.

In addition, Tongli Technology's debt-to-asset ratio is significantly higher than its peers.

According to the prospectus information released by Tongli Technology, from 2020 to 2022, Tongli Technology's debt-to-asset ratio was 72.37%, 75.31% and 54.95% respectively. The average debt-to-asset ratio of companies in the same industry during the same period was 61.16%, 56.54% and 50.06%. Tongli Technology's debt-to-asset ratio was about 5%-15% higher than its peers on average.

It is worth mentioning that the controlling shareholder of TCL Technology is TCL Electronics (Hong Kong), and the actual controller is Li Dongsheng, the founder of TCL .

At present, Li Dongsheng has controlling stakes in five listed companies, namely A -share listed companies TCL Technology, OMA Electric Appliances, TCL Central , Hong Kong-listed companies TCL Electronics and Huaxian Optoelectronics.

Let us wait and see whether Tongli Technology can successfully go public and become the sixth listed company controlled by Li Dongsheng .

Tongli Technology

IPO