Shanghai Friendess Electric Technology Co. Ltd (Friendess Technology, 柏楚电子) plans to go public within a week on the Shanghai Stock Exchange (SSE). The company aims to raise CNY 835.37 million (USD 121.38 million).
Founded in 2007, Friendess Technology is specialized in laser-cutting technologies. In China, the low-mid frequency laser cutting control system market is highly concentrated. GF Securities found that Weihong Technology (维宏科技), Au3Tech (奥森迪科), and Friendess Technology combined account for 90% of the low-mid frequency laser control system market in China.
Financial performance distinguishes the company from its peers: net profit margin was as high as 56.73% in 2018 with an operating income of CNY 245 million (USD 35.6 million). From 2016 to 2018, the firm’s revenue increased at a CAGR 41.7%; the net profit increased at a CAGR 36.12% over the same period.
More than half of the company's employees are directly involved in R&D activities; 11.47% of the annual revenue flew to R&D activities in 2018. The firm and all its subsidiaries registered 34 software copyrights and 17 patents, including 10 patents for invention, as of April 2019.
Despite having high net profit margins, the company lost momentum in boosting revenue growth. Comparing to 2016-2017’s revenue growth of 72.15%, the revenue growth encountered a sharp decrease to 16.58% in 2017-2018.
July 17, the firm and its underwriters received warning from the SSE because of misconduct: key data was removed from prospectus without acknowledgment and forged date of signature.