Chunguang Group IPO Registration Takes Effect: Steady Revenue Growth But Debt Repayment Under Pressure, Million-Dollar Shareholder Dividends Attract Attention

Why did AI · Spring Light Group’s actual controller distribute large dividends during a period of tight funds?

Shandong Spring Light Technology Group Co., Ltd. (referred to as “Spring Light Group”) has taken another key step toward going public.

Recently, Spring Light Group’s initial public offering (IPO) registration was approved. It is understood that the company’s listing application was accepted on June 17, 2025, entered the inquiry stage on July 1 of the same year, was approved at the hearing on February 5, 2025, submitted for registration on February 24, and the registration became effective on March 4.

Spring Light Group’s main businesses include four segments: magnetic powder, magnetic cores, electronic components, and power supplies. Aside from magnetic powder, the other three segments were all operating at a loss in 2024.

Additionally, Spring Light Group faces increasing accounts receivable and declining operating cash flow. As of the first half of 2025, the company’s cash on hand was insufficient to cover short-term debt, with a funding gap of about 160 million yuan.

Before going public, Spring Light Group distributed cash dividends of 24.72 million yuan. Based on the shareholding ratio, most of this cash dividend went to the company’s actual controller, Han Weidong.

Three out of four business segments are loss-making

Data shows that Spring Light Group currently focuses mainly on ferrite technology in soft magnetic materials, with products primarily consisting of magnetic powder and magnetic cores, used in new energy vehicles, photovoltaic energy storage, communication equipment, power systems, and other scenarios.

From 2022 to the first half of 2025, the company’s revenue was 1.015 billion yuan, 930 million yuan, 1.077 billion yuan, and 546 million yuan, respectively, with net profits of 77.14 million yuan, 87.03 million yuan, 98.89 million yuan, and 58.51 million yuan.

Looking at each segment, the main source of revenue is soft magnetic ferrite magnetic powder, which accounted for over 80% of total revenue in each period. Data shows that in the first half of 2022-2025, revenue from soft magnetic ferrite powder was 837 million yuan, 756 million yuan, 882 million yuan, and 446 million yuan, representing 82.44%, 81.33%, 81.89%, and 81.72% of total operating income.

Besides magnetic powder, magnetic cores are the second-largest revenue source. In the first half of 2022-2025, sales revenue from soft magnetic ferrite cores was 119 million yuan, 124 million yuan, 132 million yuan, and 59.45 million yuan, accounting for 11.80%, 13.38%, 12.36%, and 10.95% of main business income.

Furthermore, in the first half of 2022-2025, sales revenue from electronic components was 48.14 million yuan, 35.86 million yuan, 42.43 million yuan, and 27.67 million yuan, representing 4.78%, 3.88%, 3.96%, and 5.09% of main business income. Power supply products generated 2.64 million yuan, 7.82 million yuan, 14.69 million yuan, and 963,900 yuan, accounting for 0.26%, 0.85%, 1.37%, and 1.78%.

Notably, in terms of profitability, in 2024, aside from magnetic powder, the magnetic core, electronic components, and power supply segments were all operating at a loss.

For example, the magnetic core segment’s net profit from the first half of 2022-2025 was 349,300 yuan, -1.99 million yuan, -2.87 million yuan, and 87,580 yuan, with losses in 2023 and 2024.

Spring Light Group explicitly states in its prospectus that if future customer development and order growth do not meet expectations, certain business segments may continue to incur losses, affecting the company’s overall profitability.

Data shows that from the first half of 2022-2025, the proportion of revenue from new customers was 3.78%, 3.36%, 2.52%, and 0.96%, which is relatively low.

Accounts receivable increasing annually, with nearly 70 million yuan in bad debt provisions

Beyond business losses, Spring Light Group’s cash flow is also under pressure.

Data indicates that in the first half of 2022-2025, net cash flows from operating activities were 80.10 million yuan, 31.37 million yuan, 28.65 million yuan, and -2.47 million yuan, showing a declining trend, with the first half of 2025 being negative.

The company attributes the continued decline in operating cash flow to differences between sales collection and procurement payment cycles, changes in operating receivables and payables, and increased inventory levels.

Data shows that as of the first half of 2022-2025, accounts receivable balances were 2.50 billion yuan, 2.74 billion yuan, 3.58 billion yuan, and 3.58 billion yuan, representing 24.67%, 29.43%, 33.30%, and 32.82% of current operating income.

As receivables increase each year, so do bad debt provisions. Data shows that in the first half of 2022-2025, bad debt reserves were 13.60 million yuan, 14.55 million yuan, 20.24 million yuan, and 20.67 million yuan.

In addition to accounts receivable, the company’s notes receivable are also substantial. Data indicates that in the first half of 2022-2025, notes receivable were 2.50 billion yuan, 1.98 billion yuan, 2.19 billion yuan, and 1.78 billion yuan.

Inquiries from the Shenzhen Stock Exchange mention the company’s accounts receivable and notes receivable, requesting clarification on whether there are cases where notes could be converted into receivables due to issuer default, whether there are significant collection risks, and what measures are in place for receivables recovery.

Spring Light Group responded that post-reporting, payments are generally good, and there are no cases of notes converting into receivables due to issuer default, nor any instances of non-payment or claims against the company. The company states there is no significant collection risk.

Regarding inventory, data shows that in the first half of 2022-2025, inventory balances were 155 million yuan, 193 million yuan, 194 million yuan, and 225 million yuan, accounting for 22.12%, 27.16%, 22.69%, and 26.83% of current assets. The company’s inventory mainly consists of raw materials and stock goods, with stock goods accounting for 28.58%, 42.70%, 36.02%, and 36.77% of total inventory during these periods.

Inventory write-downs in the first half of 2022-2025 were 7.73 million yuan, 8.15 million yuan, 6.93 million yuan, and 3.04 million yuan, with provisions for inventory devaluation at 5.70%, 6.38%, 5.78%, and 5.16%.

The company was also questioned by the Shenzhen Stock Exchange about inventory management, specifically whether there are issues of obsolescence or unsalable stock, and whether provisions for inventory devaluation are sufficient.

Spring Light Group responded that the proportion of inventory carried over after the reporting period is relatively high, with no large amounts of long-unsold inventory. There are some slow-moving or obsolete items, but the company has managed inventory and made appropriate provisions for devaluation.

Funding gap of 160 million yuan, with the actual controller distributing over 10 million yuan in dividends

Cash flow decline has put pressure on the company’s funds.

Data shows that as of June 30, 2025, Spring Light Group’s monetary funds were 51.44 million yuan, down 20.81% from 64.96 million yuan at the beginning of the year.

The company’s cash mainly consists of bank deposits. Data indicates that in the first half of 2022-2025, bank deposits were 12.26 million yuan, 27.38 million yuan, 62.64 million yuan, and 49.10 million yuan.

Notably, while cash reserves decreased, borrowings increased. As of June 30, 2025, short-term loans stood at 211 million yuan, up 17.88% from 179 million yuan at the start of the year.

Furthermore, the data shows that the company’s cash is insufficient to cover short-term debt, with a funding gap of approximately 160 million yuan. Besides short-term debt, the company also has 37.08 million yuan in long-term borrowings, adding to debt and financial pressure.

In this IPO, Spring Light Group plans to raise 751 million yuan, with 99 million yuan allocated to working capital.

Interestingly, despite cash pressures, the company is still distributing dividends. According to the prospectus, in the first half of 2025, the company paid 24.72 million yuan in dividends.

The company’s actual controller is Han Weidong, who directly holds 34.04% of shares and indirectly controls 21.48% of voting rights through Linyi Jun’an, totaling 55.52% control. Based on shareholding, Han Weidong’s cash dividends in the first half of 2025 amounted to approximately 13.72 million yuan.