The sprint selection layer of Henan Tongxin Transmission Co., Ltd. has been inquired in the first round a few days ago, involving issues such as the company's product competitiveness, research and development capabilities, and the rationality of fundraising projects. The company intends to publicly issue no more than 25 million RMB ordinary shares to unspecified qualified investors (without considering the over-allotment option), and the raised funds will be used for 300,000 sets of drive shaft intelligent upgrade, reconstruction and expansion projects after deducting the issuance cost. .

Specialized and new "little giant" enterprise

According to the prospectus, Tongxin Transmission is mainly engaged in the research and development, production and sales of automobile transmission shafts and related components. The main products include non-constant velocity transmission shaft assemblies and related components.

According to the introduction of Tongxin Transmission, the company has established long-term and stable cooperative relations with Chengdu Dayun, Nanjing Kema, Sichuan Nanjun and other auto host manufacturers and parts suppliers. The company is a special new type of "little giant" enterprise of the Ministry of Industry and Information Technology, a national intellectual property advantage enterprise, and a national high-tech enterprise. The company has a series of independent intellectual property rights in the field of drive shaft, and has established a provincial engineering technology research center. Research and innovation, master the key technology of non - constant speed drive shaft. By the end of 2020, the company has obtained 2 invention patents and 38 utility model patents.

According to industry insiders, the drive shaft of an automobile refers to a shaft tube with a universal joint. It is an important part of the vehicle transmission system that connects the transmission and the wheel drive axle, and is very important to the safety performance of the main engine. Benefiting from the development of the vehicle industry and the expansion of the consumer market, the domestic auto parts industry has shown a good development trend.

According to the China Association of Automobile Manufacturers' statistics on 13,750 auto parts companies above designated size, the revenue of China's auto parts companies above designated size in 2020 will be approximately 3.9 trillion yuan.

From 2018 to 2020 (reporting period), Tongxin Transmission achieved operating revenues of 123 million yuan, 116 million yuan, and 140 million yuan, respectively; net profits attributable to parent companies were 15.4561 million yuan, 17.1789 million yuan, and 29.608 million yuan.

Higher gross profit margin

During the reporting period, the gross profit margin of Tongxin Transmission was 30.76%, 35.96%, and 34.70%, respectively. Among comparable companies in the same industry, Far East Transmission is 30.82%, 32.94%, and 29.02%; Guansheng shares are 23.22%, 25.38%, and 22.12%; Redick is 29.76%, 30.80%, and 30.88%. The average gross profit margins in the same industry were 30.74%, 31.39%, and 29.77%.

For listed companies whose gross profit margin is higher than that of comparable listed companies in the same industry, Tongxin Transmission said that the company's production capacity is basically at full capacity. By reducing the sales of light series drive shaft assemblies with lower unit prices and lower gross profit margins, while reducing the sales of drive shafts in the distribution model, Increasing the production and sales of heavy-duty series and medium-sized series drive shafts with higher unit prices and higher gross profit margins, the company's gross profit margin is on the rise. In addition, the overall cost of the company's main raw materials showed a downward trend during the reporting period.

This time the company plans to raise funds to invest in 300,000 sets of drive shaft intelligent upgrade and expansion projects, aiming to build a new intelligent production line and improve the existing drive shaft production and processing capabilities.

Concentric transmission means that the drive shaft is a key part of safety in the four major assemblies of the automobile drive train, and is widely used in various models of automobiles. The development of the automobile industry and the construction machinery industry has provided a broad demand space for the drive shaft. At the same time, the company and its parts and components industry generally face severe quality improvement pressure, efficiency upgrade pressure, cost pressure, etc., requiring companies to further improve equipment manufacturing capabilities and process levels to meet the above challenges.

According to the company's introduction, the fundraising project plans to build 10 new automated production lines. In addition to substantially increasing production capacity, it has a significant effect on the efficiency improvement of existing production lines. By configuring an automatic loading and unloading manipulator, the work shifts of the existing production line can be increased, and the number of production line personnel can be effectively reduced.

Regulatory Inquiries

In the first round of inquiries, Tongxin Transmission’s product competitiveness, research and development capabilities, and the rationality of fundraising projects have attracted the attention of the National Equities Exchange.

According to the prospectus, Henan Tongxin Transmission stated that "The company has advanced processing technology and automated processing procedures. Compared with similar domestic products, the quality is higher, the repair rate is low, and the downstream customer experience satisfaction is high. With excellent product quality and price advantages, the company’s products It has entered the mainframe market supporting systems such as Russia and South Korea." In addition, the company purchases components such as universal joints, projection forks, shaft forks, joint forks, shaft tubes and sliding sleeves, and there is outsourcing processing in the production process.

Regulatory agencies require that Concentric Transmission combines the company's product production process and procedures to supplementary disclosure of whether the main parts of the product are all externally purchased, market supply, and price fluctuations, and whether there is any supply from the customer's designated supplier. The company's independent production process added value and impact on product performance and quality, whether production is only for assembly of parts, whether products are sold under its own brand, and whether the company's production system conforms to the general practices of companies in the same industry.

At the same time, it supplementally disclosed the comparison of the company's main product key performance and quality indicators with those of its main competitors, and analyzed whether the statement "higher quality and lower repair rate than similar domestic products" has a sufficient and reasonable basis.

In terms of the technological advancement of heavy-duty drive shafts, the prospectus shows that the company has developed and built the first vertical heavy-duty drive shaft end-tooth flange fork processing line in China and quickly seized the market; the company independently developed the "high torque Y165E1 series" for the Russian YKD company. "Heavy truck drive shaft assembly products have been patented, and fill the gap in the field of large-torque heavy truck drive shafts in China.

In this regard, the regulatory agency requires the company to supplement the disclosure of the specific factual basis or proof of the statement "the first vertical heavy-duty drive shaft end-tooth flange fork processing line in China", the "high torque Y165E1 series" heavy-duty truck drive shaft assembly and the "heavy-duty truck technology" Whether the objective basis for the expressions such as the technical characteristics of ", the corresponding patent situation, and "filling the gap in the field of domestic large-torque heavy truck transmission shafts" are accurate.