IPO Observation | Hanbo Technology IPO: Production relies heavily on external processing, and foreign exchange fluctuations affect company performance
Electronic price tags are ubiquitous in our daily lives, such as those found at supermarkets, convenience stores, and pharmacies. Unlike paper-based price labels, electronic price tags are a type of electronic display device with information transmission and reception functions that can be accessed online or offline through wireless networks, providing real-time accurate product pricing information.
In recent years, the development of internet technologies has enabled the digitalization and automation of retail businesses, leading to an increasing demand for electronic price tags in the retail industry. As a result, electronic price tag manufacturers such as Hanbo Technology have seen their production volumes increase significantly.
Hanbo Technology's main products are electronic price tag terminals, with 90.58% of its revenue coming from these products in 2020, 88.51% in 2021, and 93.06% in the first half of 2022.
According to Hanbo Technology's IPO prospectus, the company relies heavily on external processing for its products. In 2020, 90.86% of its total product output came from external processing, followed by 89.57% in 2021 and 99.19% in the first half of 2022.
The company's dependence on external processing has raised concerns about the stability of its control rights. In response to a question from the Shanghai Stock Exchange (SSE), Hanbo Technology explained that it adopted an external processing mode due to the maturity of the electronic price tag manufacturing process, which enables stable output and quality assurance.
The company also highlighted the importance of controlling foreign exchange fluctuations in its IPO prospectus. In 2020, the company's revenue from foreign exchange transactions was RMB 92.08 million, followed by a loss of RMB 3.067 billion in 2021 and a profit of RMB 8.080 billion in the first half of 2022.
The company also emphasized the importance of controlling its control rights. As of June 30, 2022, Hanbo Technology's actual controller, Mr. Hou Shengguo, directly held 4.26% of the company's shares and indirectly controlled 21.84% through Beijing Hanbo, a company he controls.
The SSE has raised concerns about the stability of Hanbo Technology's control rights in light of its dependence on external processing and foreign exchange fluctuations. In response to these concerns, Hanbo Technology emphasized that it had taken measures to ensure the stability of its control rights, including setting up special voting shares for Mr. Hou Shengguo.