Author｜Yang Licheng

Editor｜Chen Xiaoran

On June 22, precision electronic components manufacturer Shenzhen Haojida Electronic Technology Co., Ltd. (hereinafter referred to as "Haojida") filed for IPO counseling with the Shenzhen Securities Regulatory Bureau, with CSC Securities taking over the counseling responsibilities.

After applying for an IPO on the ChiNext board in 2023, Haojida voluntarily withdrew its application in 2024 due to issues such as the omission of its actual controller's marital status in disclosures.

In this renewed attempt, Haojida still faces core challenges in its IPO review, including past compliance issues and business structure deficiencies.

New Intermediary Team

According to the filing information released by the Shenzhen Securities Regulatory Bureau, Haojida has officially embarked on a new round of IPO counseling. The sponsor counseling institution has shifted from CITIC Securities in the previous attempt to CSC Securities, along with updates to the accompanying law and accounting firms, as it prepares for listing with a completely new intermediary team.

Recalling the initial filing process, Haojida submitted its prospectus for the ChiNext board in September 2023, aiming to raise 700 million yuan to invest in coil production bases, acoustic, optical, and electronic component production lines, R&D center construction, and supplementary working capital. However, during the review process, it faced key regulatory inquiries and failed to respond to the inquiry documents on time, ultimately voluntarily withdrawing its application materials in April 2024, leading the Shenzhen Stock Exchange to terminate the review.

Subsequent regulatory penalty documents revealed that the primary reason for the withdrawal was significant information disclosure violations. The prospectus failed to disclose the divorce of the actual controllers, Huang Guoping and Huang Bichan, as well as incomplete details of equity transfers at the controlling shareholder, Xiaoxiang Investment level, which interfered with the regulator's assessment of Haojida's control stability.

The regulatory authorities issued a notice of criticism to the issuer and the actual controller, suspended the practice of two sponsor representatives for six months, and issued a written warning to CITIC Securities, making it a notable case of information disclosure violations in the industry.

The essence of replacing the entire intermediary team this time is to utilize third-party independent due diligence to thoroughly examine, organize, streamline, and address key nodes such as equity evolution, actual controller identification, and historical equity transfers, rectifying internal control and information disclosure shortcomings and clearing basic obstacles for reapplication.

From the perspective of equity structure, Xiaoxiang Investment maintains an absolute controlling stake with a 61.17% ownership ratio, displaying significant family-based governance characteristics and weak equity checks and balances, which is also an area that CSC Securities needs to focus on standardizing during the counseling phase.

At the business model level, Haojida positions itself as a secondary supplier in the consumer electronics sector, focusing on precision coils for smartphone camera VCM voice coil motors, supplemented by precision injection molding and stamping products. It indirectly supplies terminal brands such as Apple, Huawei, and Samsung through two major intermediaries, Luxshare Precision and ALPS, deeply embedding itself in the global leading consumer electronics supply chain system.

The core objective of the previous fundraising plan was to expand core coil production capacity and enter the automotive electronics components sector to mitigate growth bottlenecks in the smartphone main business. However, this was halted due to business fundamentals shortcomings and compliance issues. Now, with the restart of counseling, it still needs to revolve around the original fundraising and investment logic and demonstrate to regulators the rationality of capacity expansion and business transformation.

Breaking Free from Product Dilemmas

According to data from the 2023 prospectus, precision coils form the foundation of Haojida's revenue, with the main revenue from this category consistently accounting for over 60% and peaking at over 90%, essentially covering all of the company's revenue sources.

From a product functionality perspective, precision coils are core electromagnetic components that enable VCM motors to achieve autofocus and optical image stabilization (OIS) in lenses. Their production relies on micron-level precision winding processes and high yield rate control to establish entry barriers. However, the niche market space is limited, with market size entirely tied to global smartphone shipments and imaging hardware upgrade cycles, unable to grow independently from the broader consumer electronics market.

To break free from the single-product dilemma, Haojida has leveraged its existing precision manufacturing processes to venture into automotive cameras and sensor components, entering the incremental automotive electronics sector. However, at this stage, it is only in the customer sampling and small-batch verification phase, with extremely low revenue contribution and no second growth curve formed yet.

Customer concentration is a significant operational pain point for Haojida.

According to the 2023 prospectus, during the reporting period, sales to Haojida's top five customers accounted for 88.17%, 93.82%, 92.92%, and 86.38% of its main business revenue, respectively, with Luxshare Precision and ALPS combined accounting for over 70% of purchases for an extended period. Industry estimates suggest that the company's revenue from the Apple brand terminal peaked at over 86%, making it a typical highly dependent secondary supplier in the Apple supply chain.

The deep-rooted business model of being tightly bound to leading customers presents multiple operational risks. The company's bargaining position in the supply chain is weak, and downstream module manufacturers can leverage their purchasing scale to implement price reductions and split order shares, continuously squeezing profit margins. In 2022, the gross margin of some structural component businesses under the company even turned negative.

The entire business line is highly susceptible to fluctuations following the supply chain rhythm. Iterative updates of new Apple models and dynamic adjustments to the supply chain cooperation list can directly trigger significant fluctuations in the company's order volume.

Cooperation continuity also lacks rigid guarantees. Once core customers choose to in-house the production of supporting components or introduce competitors in the same sector for cooperation, the business foundation on which the company relies for survival will be severely impacted.

Compared to listed peers such as Yunzhong Technology and Beilong Precision, Haojida has long lacked advantages in terms of R&D expenditure as a percentage of revenue, holding a relatively small number of invention patents, and lagging in production line automation upgrades, failing to establish a solid technological moat. It can only rely on its long-accumulated supply cooperation qualifications to maintain its market share in niche sectors.

Against the backdrop of the broader industry environment, the sector of mobile phone camera components, to which precision coils belong, has entered a stage of stock optimization and structural upgrades.

Bringing Structural Increments

According to industry statistics, the replacement of existing smartphones globally has become the mainstream trend, with flagship models universally equipped with triple-camera or higher configurations. OIS optical image stabilization and periscope telephoto configurations continue to permeate mid-range models, steadily increasing the number of VCM motors per device and driving up the demand for precision coils per device, bringing structural increments to the stock market.

Meanwhile, the rise of smart cars and AR/VR devices has made automotive cameras and millimeter-wave radar components, which can reuse precision winding and stamping mature processes, core sectors for industry-wide enterprises to break through. This is also a key layout direction for Haojida's fundraising and investment projects.

Analyzing the core value and market opportunities inherent in this IPO from Haojida's capital perspective, the Apple supply chain is accelerating the localization and fragmentation process of upstream precision components, opening up cooperation access to high-precision, small-batch customized component suppliers. Relying on the long-term cooperation bridge established with Luxshare Precision, the company has the opportunity to continuously expand its supply volume within Apple's global supply chain.

Android mainstream mobile phone brands are focusing on upgrading imaging configurations in high-end models, with Huawei, Xiaomi, and other manufacturers continuously upgrading lens hardware configurations, driving the expansion of procurement demand in the domestic VCM motor supply chain. This provides an opportunity to broaden cooperation channels and reduce reliance on Luxshare Precision as a single cooperation channel.

Leveraging its years of deep cultivation in precision winding and stamping manufacturing processes, the company can achieve technological transfer and layout in the automotive electronics sector, breaking free from the shackles of cyclical fluctuations in the consumer electronics industry and tapping into long-term business growth potential.

From a capital market perspective, Haojida holds a mature positioning advantage in the precision coil niche sector, with a verifiable stable profitability level at the operational level. After the fundraising is in place, it can promote business diversification through intelligent production line upgrades, with a reasonable imagination space for overall growth logic.

However, numerous rigid operational and compliance issues still remain substantially unresolved, posing core obstacles that are difficult to circumvent during the counseling acceptance phase and subsequent formal IPO application process.

The information disclosure omission in concealing the marital status of the actual controller during the previous application phase touched the red line of IPO review. Even after post-event rectification, the regulatory authorities will still place the company on a list for key verification, requiring complete evidence of the actual effectiveness of internal control system rectification to pass the verification.

The highly concentrated business structure deeply bound to the Apple supply chain has not undergone essential adjustments. Industry cases such as O-Film Tech and Goertek experiencing significant performance damage after being excluded from the supply chain constantly warn the company of the extreme operational risks of sudden order loss.

The capacity utilization rate of Haojida's main precision coil products has been declining year by year. Against this backdrop, the business logic of planning capacity expansion has been widely questioned. Meanwhile, the commercialization pace of the automotive components business has fallen short of expectations, with slow progress in cultivating new business growth points.

Overall, Haojida's decision to replace its brokerage firm and restart IPO counseling this time is to seize the window of expectation for consumer electronics recovery and accelerated localization in the Apple supply chain, attempting to leverage capital to address capacity and business shortcomings.

Haojida holds niche market access qualifications in the Apple supply chain, possesses a mature profitability model, and has the resilience to survive in niche sectors. However, the three core issues of customer dependency, single product structure, and historical information disclosure flaws have not been thoroughly resolved.

Against the backdrop of the normalization of strict A-share IPO reviews, it must optimize its customer structure, validate the landing of automotive businesses, and comprehensively rectify its internal control system during the counseling period to truly pass regulatory scrutiny.