On the first day of listing, Jiaocheng Ultrasound opened high and closed high, with a maximum intraday increase of nearly 80%. As of the closing of the day, the stock was 120.64 yuan, up 49.44 yuan from the issue price, an increase of 69.46%, an amplitude of 18.26%, and a total m

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China Times (www.chinatimes.net.cn) reporter Zhao Yi Hu Jinhua Shanghai report

html On September 27, the new energy power battery equipment supplier - Shanghai Jiaocheng Ultrasonic Technology Co., Ltd. (hereinafter referred to as "Jiucheng Ultrasonic", 688392.SH) successfully logged into the Science and Technology Innovation Board . On the first day of listing, Jiaocheng Ultrasound opened high and closed high, with a maximum intraday increase of nearly 80%. As of the closing of the day, the stock was 120.64 yuan, up 49.44 yuan from the issue price, an increase of 69.46%, an amplitude of 18.26%, and a total market value of 9.891 billion yuan. Calculated based on the closing price, the floating profit of one win was about 24,700 yuan.

In response to the sharp rise on the first day of Jiaocheng Ultrasound's listing, IPG China's chief economist Bai Wenxi told the reporter of " China Times " that the outbreak of the new energy vehicle market has spawned a rapid growth in demand for power batteries, and the energy crisis caused by the Russian-Ukrainian war has prompted EU to vigorously promote the investment and construction of new energy power generation and energy storage technology represented by photovoltaic , which naturally has a driving effect on the lithium battery concept stock , leading to the current hot market for new energy concept stocks such as lithium batteries.

data shows that as of September 30, including , a total of 50 new stocks were listed in September, and 20 of them broke the issue price on the first day, with a break rate of as high as 40% on the first day. In September, when new stocks performed poorly, Jiaocheng Ultrasound was particularly eye-catching. However, in the following three trading days, Jiaocheng Ultrasound seemed to have insufficient momentum. As of the closing of the last trading day in September, Jiaocheng Ultrasound was 104.66 yuan, down 7.64% during the day, and the latest market value was 8.582 billion yuan.

Regarding issues related to this listing, a reporter from the China Times called Jiaocheng Ultrasound headquarters many times and sent him an interview letter, but as of press time, no reply was received.

performance fluctuates, profitability is unstable

Public information shows that Jiaocheng Ultrasound was founded in 2007. It is a supplier of ultrasonic equipment and automation solutions. It is mainly engaged in the research, development, design, production and sales of ultrasonic welding , cutting equipment and accessories, and provides automation solutions in the field of new energy power battery manufacturing.

According to the prospectus, from 2019 to 2021, Jiaocheng Ultrasound achieved operating income of RMB 134 million, RMB 265 million and RMB 371 million respectively; net profits were RMB 10.0404 million, RMB 87.233 million and RMB 72.8273 million respectively; net profits attributable to shareholders were RMB 9.6185 million, RMB 89.2887 million and RMB 69.2516 million respectively. It can be seen that Jiaocheng Ultrasound's net profit increased significantly in 2020, but decreased in 2021.

From January to June 2022, Jiaocheng Ultrasound achieved operating income of 245 million yuan, a year-on-year increase of 33.82%; net profit was 53.1586 million yuan, a year-on-year increase of 46.67%; net profit attributable to shareholders was 54.3295 million yuan, a year-on-year increase of 69.37%. The company expects operating income from January to September 2022 to be 370 million to 410 million yuan, a year-on-year increase of 36.97%-51.77%; the net profit attributable to the parent company's owners is 74.7 million to 81.15 million yuan, a year-on-year increase of 57.52%-71.13%.

By sorting out the prospectus, the reporter noticed that the net cash flow generated by Jiaocheng Ultrasound's business activities has been negative for 2 years in the past three years. During the reporting period, the net cash flow generated by its operating activities was -3.4724 million yuan, 112 million yuan and -30.5685 million yuan, respectively.

In response to this, Jiaocheng Ultrasound stated in its prospectus that the net cash flow generated by the company's operating activities in 2019 was negative, mainly due to the increase in inventory and operating receivables. The commissioning and acceptance cycle of the company's power battery automation system order is long and has not been accepted yet, resulting in an increase of inventory of 16.3771 million yuan, and the payment cycle of downstream new energy customers has slowed down, resulting in an increase of 16.1196 million yuan in the company's current operating receivables.

The net cash flow generated by the company's operating activities in 2021 was negative, mainly due to an increase of 155 million yuan in operating receivables. The balance of accounts receivable at the end of 2021 increased significantly compared with the end of the previous period, and some payments were settled in bills, which had a certain impact on the net cash flow of operating .

R&D investment is an important measurement indicator for listed companies on the Science and Technology Innovation Board. From 2019 to 2021, Jiaocheng Co., Ltd.'s R&D expenses were RMB 20.0578 million, RMB 32.828 million and RMB 45.7803 million, respectively, accounting for 14.94%, 12.41% and 12.35% of operating income, respectively.The average R&D expense ratios of comparable companies in the same industry are 7.55%, 8.00% and 7.96%, respectively, which are higher than those of peers.

Jiaocheng Ultrasound stated in its prospectus that the company's R&D expense rate is significantly higher than the average level of comparable companies. On the one hand, the company's operating income base is relatively low, and relatively speaking, the proportion of R&D expenses to operating income is relatively high; on the other hand, the company is a technology-driven enterprise, attaches great importance to R&D work, and continuously optimizes ultrasonic welding technology and explores new fields of ultrasonic industrial application.

CATL is its largest customer

reporter learned that compared with existing lithium battery equipment suppliers, Jiaocheng Ultrasound's advantage lies in its ultrasonic technology. Its power battery ultrasonic welding equipment is mainly used in the electrode welding link in the lithium battery production line. At present, in the process of connecting the electrode ears and pole columns of the lithium battery cell, all parts involving multi-layer electrode welding are completed by the ultrasonic welding process. In addition, the company is gradually developing the application of ultrasonic welding equipment in non-woven fabrics, automotive wiring harnesses, power semiconductors and other fields.

But it is worth noting that the application link of ultrasonic welding is relatively single. In its prospectus, Jiaocheng Ultrasound introduced that the large-scale application of ultrasound in other links such as composite fluid battery welding and pole cutting still needs to be expanded. The market size of ultrasonic welding equipment is also smaller than that of laser welding equipment. The company predicts that the market demand for ultrasonic welding equipment and its accessories for power battery ear welding will be between 1 billion and 2 billion yuan each year from 2022 to 2025.

customer aspects, CATL New Energy Technology Co., Ltd. (hereinafter referred to as "CATL", 300750.SZ) is one of its important customers. The prospectus shows that during the reporting period, Jiaocheng Ultrasound's power battery ultrasonic welding equipment and its main accessories business, the revenue from CATL's largest customer, was 37.49%, 40.80% and 56.58% respectively.

's largest customer, CATL, undoubtedly became a double-edged sword. Jiaocheng Ultrasound admitted: "Given the current pattern of the power battery industry, in the future, the company will inevitably have the risk of high customer concentration and large customers' dependence."

In response to the problem of excessive customer concentration, Bai Wenxi believes that high customer concentration will undoubtedly increase the company's market risks and dependence on a single customer, causing potential risks of instability in the company's performance.

In this regard, Kuang Yuqing, founder of the research of the third-party research institution Lens Company, also told the reporter of the China Times that the most important problem with high customer concentration is that it cannot bear the risk of losing large customers. Once the loss of large customers, it will cause huge losses to the company. For giant companies, if the premium is too high, there is a risk of being replaced. In addition, in front of giant companies, if they intend to expand their supplier development business, they can "kick out" the supplier at any time.

Jiaocheng Ultrasound said that as the scale of cooperation between the company and its major customers continues to grow, if customers continue to strengthen cost control of equipment procurement, or the competition between the company and its competitors in the field of power battery welding intensifies, or the cost of raw materials and labor increases significantly, the company's power battery ultrasonic welding equipment and welding accessories will face certain price pressure or increase production costs. If the company cannot launch high-value-added products in a timely manner according to market demand, the power battery ultrasonic welding equipment and welding accessories business will be at risk of a decline in gross profit margin.

Huajin Securities research report believes that the new energy vehicle industry has been in a high prosperity in recent years. Against this background, the production capacity of power battery companies led by CATL continues to expand, driving the rapid growth of the market size of power battery pole ear ultrasonic welding equipment. As a leader in the field of ultrasonic extreme ear welding, Jiaocheng Ultrasound is expected to benefit from this trend.

"As the scale of the power battery market continues to expand, leading power battery companies such as CATL and BYD have announced expansion plans in the next few years to meet the growing downstream demand, and the continued expansion of power batteries is expected to drive the growth of ultrasonic ear welding market space." Huajin Securities Research Report stated.