A-share subscription | BMW supplier Huaxin Jingke (603370.SH) starts subscription for 2024 operating cash flow net amount is negative.

On August 25th, Huaxin Jingke (603370.SH) began its IPO with an issue price of 18.6 yuan per share and a maximum subscription limit of 13,500 shares. The price-to-earnings ratio is 21.68 times and it is listed on the Shanghai Stock Exchange, with Huatai United Securities as its sponsor. According to the prospectus, Huaxin Jingke focuses on the research, development, production, and sales of precision stamping products. The company's main products include various types of precision stamping iron cores and precision stamping molds related to iron core production. The precision stamping iron core is the company's main product, which includes various types such as iron cores for new energy vehicle drive motors, micro-special motor iron cores, electrical equipment iron cores, ignition coil iron cores, etc. These products are mainly supplied to various large automotive parts manufacturers, motor manufacturers, electrical equipment manufacturers, and automotive OEMs both domestically and internationally. Huaxin Jingke has gained wide recognition from many domestic and foreign large automotive parts manufacturers, OEMs, motor manufacturers, electrical equipment manufacturers, and has established good cooperative relationships with well-known enterprises such as Valeo, Delta Electronics, Bosch Group, Eldorado Group, Shenzhen Inovance Technology, BYD Company Limited, BMW Group, and ZF Friedrichshafen AG. Huaxin Jingke pointed out in the prospectus that the company supplies iron cores directly to BMW Group and indirectly to BMW Group through ZF Friedrichshafen AG for the production of BMW's fifth-generation drive motor iron cores. During the reporting period, the company's revenue from the BMW project accounted for 0.93%, 26.83%, and 25.33% respectively of the company's operating income, making a significant contribution to the company's performance. The company is one of the only two global iron core suppliers under the direct procurement mode of the BMW project, and the only Chinese supplier. The company's share in the BMW project has been determined to be nearly 50% during the designated period. Since the mass production of the BMW project, the company's supply of iron cores has accounted for nearly half of the direct procurement of iron cores for the BMW project, reaching a high level. According to VIC Market Research, the total sales of the top 20 manufacturers in the world will account for 35.29%, while the top 20 manufacturers in China will account for 37.69%. From 2021 to 2023, Huaxin Jingke's total sales of precision stamping iron cores ranked among the top five in the global and Chinese precision stamping iron core market among domestic manufacturers. In terms of financial performance, the company is expected to achieve operating income of approximately 1.192 billion yuan, 1.189 billion yuan, and 1.421 billion yuan respectively in 2022, 2023, and 2024, with a corresponding net profit of approximately 114 million yuan, 156 million yuan, and 150 million yuan. Huaxin Jingke stated that the company's net cash flow from operating activities was negative in 2022 and 2024, mainly due to the continuous expansion of the company's business scale, the continuous increase in the year-end balance of operating receivables, and the time difference between the prepayment of raw material payments to suppliers and the receipt of customer payments. The company expects that in the first half of 2025, both operating income and net profit are expected to increase compared to the same period last year, with a stable and upward trend in operating performance.