Yimei Zhichong accelerates Hong Kong stock IPO: Behind a 190% surge in net profit over three years, customer concentration rises to 45.7%, hiding potential risks

Main Business: Leading PCB Inspection Equipment Provider, Global Market Share 8.4%

Shenzhen Yimei Zhi Technology, as China’s largest and the second-largest global provider of PCB quality control solutions, focuses on providing optical inspection and electrical performance testing equipment and related services. According to Zhuoshi Consulting data, based on 2025 revenue, the company holds a 13.8% share in the Chinese market and an 8.4% share globally.

The company’s main revenue is highly concentrated in PCB quality control solutions, with this segment expected to reach 720 million yuan in 2025, accounting for 94.2% of total revenue. Among these, optical inspection solutions contribute 54.6% of revenue, and electrical performance testing solutions account for 39.6%. Other businesses (mainly equipment spare parts sales and after-sales maintenance services) only make up 5.8%. Notably, revenue from electrical performance testing solutions grew significantly, soaring from 64.27 million yuan in 2023 to 303 million yuan in 2025, a 370% increase over two years, becoming the core driver of the company’s growth.

Financial Performance: Both Revenue and Net Profit Grow Rapidly, Gross Margin Slightly Declines

Three-year CAGR of Revenue at 49.9%, Net Profit Growth at 70.2%

Financial data shows that Yimei Zhi has experienced rapid growth in recent years. Revenue increased from 340 million yuan in 2023 to 764 million yuan in 2025, with a compound annual growth rate (CAGR) of 49.9%; meanwhile, net profit rose from 69.91 million yuan to 202 million yuan, with a CAGR of 70.2%, significantly outpacing revenue growth.

Revenue and Profit Change Table

In 2025, the company’s gross margin was 43.5%, down from 46.2% in 2024, mainly due to changes in product structure. Gross margin for optical inspection solutions decreased from 46.7% to 44.1%, while electrical performance testing solutions remained stable at 42.6%. Notably, the net profit margin continued to improve, rising from 20.6% in 2023 to 26.5% in 2025, indicating enhanced cost control capabilities.

R&D Investment Ratio Declined by 5.9 Percentage Points Over Three Years

In 2025, R&D expenditure was 53.15 million yuan, accounting for 7.0% of revenue, a significant decline from 12.9% in 2023. By the end of 2025, the R&D team comprised 170 people, representing 20.4% of total employees. The company has obtained 95 patents and 17 software copyrights, but its overseas intellectual property layout is insufficient, which may impact international market expansion.

Customers and Suppliers: Concentration Risks and Supply Chain Dependence Coexist

Customer Concentration Continues to Rise, Top Five Customers Contribute 45.7% of Revenue

High customer concentration remains a potential risk for Yimei Zhi. From 2023 to 2025, the proportion of sales to the top five customers was 29.8%, 44.9%, and 45.7%, respectively, showing an increasing trend. The largest single customer’s revenue share increased from 7.7% to 17.2%.

Customer Concentration Change Table

The company explains that the high customer concentration is mainly due to the high industry concentration of PCB, with coverage of the top 10 global PCB companies in 2024. However, such high customer dependence still poses risks of losing key clients or order reductions.

Supplier Concentration Remains Stable, Raw Material Costs Account for 77%

Regarding suppliers, the procurement share from the top five suppliers decreased from 37.8% in 2023 to 31.3% in 2025, indicating manageable concentration. In 2025, the largest supplier accounted for 14.7% of procurement, mainly providing optical components, computer accessories, and mechanical parts.

Raw material costs as a proportion of sales costs increased annually, from 72.5% in 2023 to 77.0% in 2025, reflecting high dependence on upstream supply chains. Key raw materials include industrial cameras, lenses, light sources, and other high-precision components, some of which are imported, posing supply chain risks.

Asset Structure: Inventory Turnover Days at 348.9 Days, Cash Flow Continues Below Net Profit

Financial health indicators show that inventory turnover days improved from 482.2 days in 2023 to 348.9 days in 2025, but remain high. Accounts receivable turnover days decreased from 232.5 days to 163.7 days, indicating improved operational efficiency.

It is noteworthy that operating cash flow has consistently been below net profit. In 2025, operating cash flow was 176 million yuan, less than net profit of 202 million yuan by 26 million yuan, mainly due to increased inventory and accounts receivable tying up funds. As of the end of 2025, cash and cash equivalents totaled 363 million yuan, with a current ratio of 2.3 and an asset-liability ratio of 42.1%, reflecting overall sound financial health.

Ownership and Governance: Controlling Shareholders Hold 84.85% of Shares

The company’s ownership structure is highly concentrated, with Wu Linquan and Lin Yonghua controlling a total of 84.85% of shares through direct and indirect holdings. Wu Linquan directly owns 19.84%, and through Shenzhen Haokaiyi (100% owned) and Shenzhen Huakai Jun (99.995% owned), indirectly controls 23.52%. Lin Yonghua directly owns 19.85%, and through Shenzhen and Yangsheng (100% owned) and Shenzhen Huakai Jun (0.005%), also controls 23.52%.

Ownership Structure Table

High ownership concentration may lead to decision-making over-reliance on a few shareholders, posing governance risks. The company has signed an agreement with the two actual controllers, valid for three years post-IPO.

Core Management: Strong Stability, Compensation Growth Below Profit Growth

The core management team is stable, with Chairman Wu Linquan and General Manager Lin Yonghua being founders who have served since the company’s establishment in 2008. From 2023 to 2025, the total compensation of directors and senior managers was 4.8 million, 6.4 million, and 6.7 million yuan, respectively, showing a gradual increase. In 2025, total compensation was 6.74 million yuan, up 5.4% from 2024, far below the 77.6% net profit growth during the same period. Executive director Lin Yonghua’s salary was 203,000 yuan, accounting for 30.0%, with only 3.4% of compensation in stock-based payments. The lack of long-term incentive mechanisms may affect the stability of the core team.

Risk Factors: Technology Iteration and International Trade Policies as Major Challenges

Yimei Zhi discloses several risk factors in its prospectus, mainly including:

Technology Update Risks

PCB inspection equipment technology advances rapidly. If the company cannot keep pace with industry technological progress, it may lose market competitiveness. The R&D investment ratio has been declining from 2023 to 2025, which warrants caution. Of the 22 patents held, 16 will expire after 2036. Insufficient R&D investment (2025 R&D expense rate at 6.96%, below the industry average of 8.5%) could lead to losing technological advantages.

International Trade Policy Risks

Overseas revenue increased from 5.5% to 17.5%, mainly from markets like Thailand and Hong Kong. Changes in international trade friction and tariffs could impact exports. For example, the US “Chips Act” may restrict exports of PCB equipment to China, with overseas revenue of 134 million yuan in 2025 potentially affected.

Customer Concentration Risks

The top five customers contribute 45.7% of revenue, including major PCB manufacturers like Jingwang Electronics and Shen Nan Circuit. Losing key clients could significantly impact performance. In 2024, Customer B contributed 59.44 million yuan (12.5%), but by 2025, it exited the major customer list, indicating potential revenue volatility due to reliance on large clients.

Supply Chain Risks

Some core components like industrial cameras and lenses depend on imports, with geopolitical risks possibly causing supply disruptions or cost increases. The company’s procurement from related party Shenzhen Dier Tai Technology Co., Ltd. increased from 9.13 million yuan in 2023 to 20.10 million yuan in 2025, a CAGR of 53.5%, representing 8.7% to 11.2% of total procurement. While pricing is audited as fair, continued reliance on related suppliers may affect supply chain stability.

Inventory Impairment Risks

Inventory book value is 470 million yuan, accounting for 36.3% of total assets, with in-transit goods at 289 million yuan (61.6% of inventory). If downstream demand falls short, based on a historical 1.8% inventory impairment rate, potential impairment loss could be 8.46 million yuan.

Cash Flow Risks

Accounts receivable amount to 383 million yuan (50.2% of revenue), with 33.83 million yuan overdue by over a year (8.8%). In 2025, bad debt provision was 28.16 million yuan. If economic downturns increase customer default rates, bad debt risks will rise.

Policy Risks

As a high-tech enterprise, the company enjoys a 15% corporate income tax rate. Changes in tax policies or expiration of qualification could increase tax expenses. In 2025, income tax expense would rise from 28.98 million yuan to 47.45 million yuan, reducing net profit by 18.47 million yuan (9.1% decrease).

Peer Comparison: Lower Gross Margin and R&D Investment

Compared to peers, Yimei Zhi shows gaps in key metrics:

Peer Comparison Table

Lower gross margin and R&D investment may constrain long-term development, while lower asset turnover indicates room for operational efficiency improvements.

Conclusion: High Growth Masks Structural Risks

As a leader in PCB inspection equipment, Yimei Zhi benefits from the high prosperity of downstream PCB industries, achieving a three-year revenue CAGR of 49.9% and net profit CAGR of 70.2%. The company has advantages in technology R&D and customer resources, but issues such as high customer concentration, declining R&D ratio, and long inventory turnover warrant investor attention.

In the future, the company plans to use IPO proceeds mainly for R&D, capacity expansion, sales network development, and working capital supplementation. If strategic implementation proceeds effectively, the company could strengthen its industry position and expand overseas markets. However, investors should closely monitor risks related to technological iteration, international trade policies, and customer dependence affecting future growth.

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