Chu Da Intelligent’s IPO application to the Beijing Stock Exchange has been accepted. The company’s core businesses include glass forming equipment and automated powder batching systems.

Chudada Intelligent (874280) had its listing application materials accepted by the Beijing Stock Exchange at the end of June. The company’s net profit rose from RMB 14.82 million in 2022 to RMB 44.56 million in 2023, representing a twofold increase. Among the four comparable listed companies, three saw a significant decline in net profit in 2023: Yongchuang Intelligent declined by 74%, Zhongya Shares by 56%, and Xinmeixing by 32%.

According to the analysis, the authenticity and reasonableness of Chuda Intelligent’s substantial performance growth during the reporting period, as well as the reasons for the divergence from comparable companies in the same industry, will likely draw close attention from auditors.

(Comparison of Chuda Intelligent with Comparable Listed Companies—screenshot from Chuda Intelligent’s IPO filing)

Gross profit margin is also a key indicator that affects a company’s profitability. According to the prospectus, Chuda Intelligent’s gross profit margins from 2021 to 2023 were 24.77%, 26.75%, and 33.91%, respectively. In 2021 and 2022, its gross profit margin was below the average of comparable companies; however, in 2023, its gross profit margin improved significantly, exceeding the average of comparable companies—27.84%—by 6 percentage points.

Regarding the above-mentioned differences, Chu Da Intelligence stated that in 2021 and 2022, its gross profit margin was lower than the average level of comparable companies because these comparables had larger revenue scales, benefiting from significant scale effects and thus achieving relatively higher gross profit margins. In 2023, its gross profit margin was higher than that of comparable companies due to the increased proportion of export revenues, which have higher gross profit margins.

Chu Da Intelligence further summarized the reasons for the differences in gross profit margins compared to its peer companies, which can be attributed to three key factors: differences in product mix, differences in customer and application areas, and differences in company size and stage of development.

In its prospectus, Chu Da Intelligent disclosed that the customers of comparable companies in the same industry are concentrated among medium- and large-sized enterprises in the daily beverage and consumer goods sectors, such as beer, carbonated drinks, and dairy products. These include Mengniu Dairy, Yili Group, Coca-Cola, PepsiCo, Nestlé, Procter & Gamble, and Golden Dragon Fish. In contrast, the plastic packaging products and aluminum can packaging machinery industries have a larger number of participants, resulting in relatively intense competition and weaker bargaining power for companies within the same industry.

Chu Da Intelligent disclosed that its customers are concentrated in industries such as food, beverages, cosmetics, and pharmaceuticals, including Guizhou Moutai, Huaxing Glass, Haitian Flavoring, Shandong Pharmaceutical Glass, Huaian Jiajia, and Global Glass. In the field of glass packaging equipment manufacturing, leading companies are predominantly foreign manufacturers; however, our company offers excellent cost-performance ratios in overseas markets. In the domestic market, our intelligent rotary bottle-making machines hold the No. 1 market share in the specialized segment for non-standard-shaped bottles and enjoy a significant competitive edge in the mid-to-high-end non-standard-shaped bottle segment, which has been driving year-on-year improvements in gross profit margins.

According to data from the Wabe Research Institute, Chuda Intelligent’s core business is providing glass forming equipment, automated powder batching systems, and intelligent production-line units based on robotics to manufacturers of glass packaging containers and glass products.