Chinese Military Equipment Supplier CONSYS Ready for IPO on Star Market
An arms industry index, CSI Defense Index also generated 30.3% return in July.
On July 28, Shenzhen-based military equipment manufacturer CONSYS (深圳科思科技) passed the review by the Star Market Listing Committee. Based on the Review and Registration Procedures, the wait for the company is only based on shares registration and offers.
Based on the disclosed information, the firm generated CNY 669.26 million for the year ending on December 31, 2019. Over 95% of its revenue was raised from the command and control information processing equipment segment. Besides, the gross margin was 69.86%, and its peer group’s figure was 51.78%. Its net income was CNY 217.97 million.
The company is also facing several risks including revenue concentration, operating cash flow deficit and supplier risk. In 2019, CONSYS derived 98.71% of revenue from the 5 biggest customers. Slow collection of accounts receivable was caused by its major clients – military forces. In addition, importing key components including chips and power modules is leading to a risk of possible suspended shipments in the future.
China’s stock market performed well in July with a major index like Shanghai Securities Composite Index (SSEC) and Shenzhen Securities Component Index (SZI) gave returns of over 10%. Among all the sectors, the arms industry sector generated the highest return, as popular indexes like CSI National Defense Industry Index (399967) gave a return of 28.4%.