Will Bozhon's Second Application for Star Board IPO Be Successful?
Bozhon is currently facing the problem of high R&D costs and technological barriers. Hence, the firm will keep increasing its inputs in the production and sales of automation techniques.
According to the Shanghai Stock Exchange (SSE), it has received Bozhon’s application for IPO, with planned fundraising of CNY 1.11 billion. Specifically, the firm would utilize this amount to establish the consumer electronics industry, supplement circulating capitals and upgrade the R&D center. This was not the first time for Bozhon to hand in its application; it passed three inquiries in April 2019, but withdrew the application files in April 2020.
Will Bozhon be successful this time? There are still massive risks for it. Firstly, it relies too much on Apple’s industrial chains. As the firm’s financial reports said, the ratio of the firm’s income to Apple’s industrial chain was over 70% from 2017 to 2019. Moreover, Apple’s orders were negatively affected by COVID-19, which further decreased Bozhon’s operating income. Secondly, the risk from the fluctuation in gross margin. Affected by some certain orders and products, there is a strong downswing in its gross margin.
With the expansion of new-energy vehicles in China and the world, the automation equipment market was emphasized by many firms. Bozhon is no exception. The firm is actively exploring more application fields, such as new energy cars, furniture and autos. However, with the comparatively shorter entrance time, Bozhon should keep accumulating its understanding and experience for the automation equipment market.