Guangtai Vacuum's second listing attempt: R&D expense ratio significantly lower than peers, accounts receivable beyond credit terms soaring

Ask AI · How does the surge in overdue accounts receivable affect the financial health of the company?

“Harbor Business Observer” Xu Huijing

Shenyang Guangtai Vacuum Technology Co., Ltd. (hereinafter referred to as Guangtai Vacuum) has reached a critical moment in its IPO journey on the Beijing Stock Exchange.

On May 16, 2025, the company held its 11th meeting of the first board of directors, reviewing and approving proposals related to its listing on the Beijing Stock Exchange; on June 9 of the same year, the first extraordinary shareholders’ meeting approved the issuance plan, with CITIC Securities as the sponsor.

On December 29, 2025, Guangtai Vacuum was first presented at the meeting, but the review by the listing committee of the Beijing Stock Exchange was postponed due to compliance issues with revenue recognition. The core points of concern include: multiple pieces of equipment shipped for over a year without acceptance, involving an amount as high as 118 million yuan; whether the timing of revenue recognition complies with accounting standards and if the basis is sufficient; and non-standard acceptance documents, such as the absence of official seals, alterations, and omissions, affecting the authenticity of revenue.

After the postponement, Guangtai Vacuum conducted nearly three months of material supplementation and rectification, updating the prospectus (meeting draft) and the response letter to the listing committee’s opinions around March 18, 2026. The company explained that the long acceptance cycle is due to the customized large equipment, which needs to go through several stages: “shipping → installation → debugging → process verification → acceptance,” with the overall cycle lasting 3 to 18 months. On March 26, the company will face another initial meeting for the IPO.

It is worth noting that the sponsoring institution CITIC Securities holds 2.44% of the company’s shares through its wholly-owned subsidiary, raising discussions in the market regarding the independence of the sponsorship arrangement.

1

Gross margin lower than peers, increase in rare earth permanent magnet proportion

According to the prospectus and Tianyancha, the company’s predecessor, Guangtai Limited, was established on May 29, 2013, and was fully transformed into a joint-stock company on January 27, 2022. It is a high-tech enterprise focusing on the research, development, manufacturing, and sales of vacuum equipment, with main products including vacuum sintering furnaces, vacuum melting furnaces, vacuum coating machines, etc. The downstream application fields cover the rare earth permanent magnet industry, hydrogen storage material processing industry, photovoltaic field, and mechanical and electronic processing industry.

Financial data shows that in the reporting periods of 2022, 2023, 2024, and January to September 2025 (hereinafter referred to as the reporting period), Guangtai Vacuum achieved operating revenues of 281 million yuan, 312 million yuan, 379 million yuan, and 342 million yuan, with net profits of 44.2641 million yuan, 73.0326 million yuan, 68.9441 million yuan, and 76.6341 million yuan, and net profits attributable to the parent company of 41.1078 million yuan, 64.7584 million yuan, 67.9913 million yuan, and 75.7298 million yuan, respectively.

Looking at the growth trend, the company’s performance has fluctuated. In terms of operating revenue, there was an 11.04% year-on-year growth in 2023, and the growth rate increased to 21.58% in 2024, with revenues for January to September 2025 reaching 90.26% of the total for 2024. The net profit performance is even more polarized: in 2023, it saw a significant year-on-year growth of 65.04%, but in 2024, it declined by 5.60%, leading to a situation of increased revenue but decreased profit; in January to September 2025, the company achieved a net profit of 76.6341 million yuan, exceeding the total level for 2024, with a significant improvement in profitability year-on-year.

For the fiscal year 2025, the company’s audited operating revenue was 408 million yuan, a 7.79% increase compared to the same period last year; the net profit attributable to shareholders of the parent company was 81.6774 million yuan, and the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 80.9659 million yuan, marking a 19.08% increase compared to the same period last year.

The company expects operating revenue of approximately 117 million to 123 million yuan from January to March 2026, a year-on-year growth of 90.76% to 100.54%; the net profit attributable to the parent company is expected to be approximately 20 million to 26 million yuan, a year-on-year growth of 38.99% to 80.69%.

In terms of profitability, the company’s comprehensive gross margins during the reporting period were 27.32%, 33.64%, 30.90%, and 35.17%, with the audited gross margin for the entire year of 2025 at 34.17%. Although it has increased compared to 2024, it remains consistently below the average level of comparable companies in the industry. The average comprehensive gross margins of comparable companies in the same industry during the same period were 42.43%, 40.24%, 38.21%, and 39.38%.

The company explained that this is mainly because there are currently no completely comparable enterprises among listed and registered companies, and there are specific differences in product structure and application fields between the company and comparable companies in the industry. Among them, North Huachuang’s main business involves high-end electronic equipment, and the gross margin level of semiconductor products is generally high; Hengjin’s induction products, high-end CNC induction quenching machines, have high requirements for processing precision and stability, resulting in relatively high gross margins.

In the revenue structure of Dingli Technology, it mainly involves carbon-ceramic material thermal equipment, advanced heat treatment equipment, and powder metallurgy thermal equipment, with downstream applications primarily in aerospace, nuclear industry, and semiconductors, which have comparability with the types of products offered by the company, although there are differences in downstream application fields. Among them, Dingli Technology disclosed in public data that the gross margins of its equipment products from the fiscal year 2022 to June 2025 were 35.73%, 33.69%, 32.80%, and 38.38%, which fall within the comparable range of the company’s product gross margins during the reporting period.

In terms of product structure, the rare earth permanent magnet industry is the absolute mainstay of Guangtai Vacuum. During the reporting period, the revenue from the rare earth permanent magnet field continued to increase, with sintered NdFeB production equipment becoming the core source of revenue. From January to September 2025, the company achieved sales revenue of 190 million yuan from sintering furnaces, accounting for 55.67% of main business revenue; sales revenue from melting furnaces was 138 million yuan, accounting for 40.32%, with the two core products combined accounting for over 95%.

The prospectus particularly notes that if the rare earth permanent magnet material industry experiences intensified competition, a decrease in downstream demand, or low production rates, it will create risks of temporary and structural overcapacity, which may lead to a slowdown in customer investment plans, delays in project execution, and a decrease in expansion demands, and the company will face risks of declining performance growth or even performance decline.

Jiang Han, a senior researcher at Pangu Think Tank, stated that Guangtai Vacuum’s revenue source is highly dependent on the rare earth permanent magnet industry, which has a dual nature. On the positive side, the rare earth permanent magnet industry has broad development prospects, providing the company with stable revenue and profits, with overall revenue and net profits showing a growth trend during the reporting period, demonstrating the company’s strong competitiveness and market position in this field. However, excessive reliance on a single industry also poses risks. Once there are market fluctuations, policy adjustments, or technological changes in the rare earth permanent magnet industry, the company’s performance may be significantly impacted, and the lack of diversified business layout will weaken the company’s ability to withstand risks.

Additionally, during the reporting period, the company relied on government subsidies for its operating performance. In each period of the reporting period, the government subsidies recognized in the current income were 7.125 million yuan, 23.7164 million yuan, 8.9743 million yuan, and 5.6485 million yuan, accounting for 16.10%, 32.47%, 13.02%, and 7.37% of the net profit for the respective periods.

2

High inventory levels, surge in overdue accounts receivable

Guangtai Vacuum faces the intertwined challenges of increasing inventory levels exceeding 400 million yuan, disputes over revenue recognition compliance, and overdue accounts receivable ratios exceeding 80%, constituting the core management challenges of the company.

In terms of customer concentration, during the reporting period, the sales revenue from the top five customers accounted for 42.09%, 42.17%, 48.20%, and 40.81% of operating revenue, remaining relatively high overall.

In terms of supplier concentration, during the reporting period, the procurement amounts from the top five suppliers accounted for 26.24%, 28.36%, 29.97%, and 32.60% of the total procurement amount, showing an increasing trend year by year.

The pressure on inventory management is significant. At the end of each period during the reporting period, the book value of the company’s inventory was 291 million yuan, 422 million yuan, 423 million yuan, and 413 million yuan, accounting for 54.28%, 63.27%, 57.75%, and 51.32% of current assets, respectively; the company’s inventory turnover ratios were 0.87, 0.58, 0.62, and 0.53; and the inventory impairment provisions were 290.8 thousand yuan, 258.5 thousand yuan, 330.9 thousand yuan, and 2.1799 million yuan.

The company’s inventory mainly consists of shipped goods and work in progress. As of the end of October 2025, the amount of orders on hand, excluding tax, reached 777 million yuan. The company explained that the large inventory balance is mainly due to the long execution cycle of large equipment, leading to a significant scale of shipped goods and work in progress. The company has already collected prepayments and shipping/arrival payments based on the phased payment policy, and the sales situation thereafter has been good, making the risk of inventory impairment controllable.

At the end of each period during the reporting period, the book value of the company’s accounts receivable was 38.5492 million yuan, 32.5951 million yuan, 60.8102 million yuan, and 67.6854 million yuan, with a growth of 86.56% at the end of 2024 compared to the end of 2023, significantly exceeding the revenue growth rate, and a further increase of 11.31% at the end of September 2025 compared to the end of 2024. The accounts receivable turnover ratios were 6.26, 7.66, 6.98, and 4.51, higher than the average of comparable companies in the industry, which were 4.83, 4.15, 4.11, and undisclosed.

More critically, the balance of overdue accounts receivable continues to rise, amounting to 14.7898 million yuan, 25.6924 million yuan, 43.5568 million yuan, and 59.1227 million yuan, accounting for 35.35%, 74.46%, 69.09%, and 84.26% of the book balance of accounts receivable, with the overdue ratio rising sharply and exceeding 80% by the end of September 2025; the bad debt provisions were 2.6250 million yuan, 3.5818 million yuan, 1.7654 million yuan, and 2.7257 million yuan.

The company explained that the increase in overdue accounts receivable is mainly due to some customers delaying payments due to financial arrangements and lengthy payment approval processes. The company’s main customers are well-known listed companies and state-owned enterprises in the rare earth permanent magnet industry, with good credit conditions, and historically, there have been no significant bad debt losses, indicating that the overall risk of accounts receivable recovery is controllable.

Jiang Han believes that the continuous rise in the balance of overdue accounts receivable at Guangtai Vacuum is a dangerous signal. The significant increase in the proportion of overdue accounts receivable, with a growth rate exceeding that of revenue, reflects potential shortcomings in the company’s sales credit management, issues with customer payment capacity or willingness, and may lead to difficulties in cash recovery, increasing bad debt risk, affecting the company’s liquidity and financial health, and thereby adversely impacting the company’s normal operations and development.

In terms of debt repayment ability, at the end of each period during the reporting period, the company’s asset-liability ratios were 81.42%, 77.95%, 71.08%, and 64.64%, showing a year-on-year decrease but still at a high level; the current ratios were 1.04, 1.11, 1.24, and 1.39, and the quick ratios were 0.48, 0.41, 0.52, and 0.68, indicating weak short-term debt repayment indicators.

3

Capacity digestion under scrutiny, high dividends and concentrated equity

Guangtai Vacuum’s fundraising arrangements, capacity planning, and governance structure for this IPO also face scrutiny.

In terms of fundraising, the company plans to raise 168 million yuan, with 98.772 million yuan allocated for the production expansion and reconstruction projects of vacuum melting furnaces and sintering furnaces, and 69.3798 million yuan for research and development and product display center construction projects.

However, the capacity digestion ability is under test. During the reporting period, the capacity utilization rates of the company’s vacuum furnace equipment were 99.44%, 92.48%, 89.98%, and 95.32%, showing a declining trend in 2023 and 2024; in terms of sales rate, the vacuum melting furnaces were 65%, 91%, 59%, and 122%, while the vacuum sintering furnaces were 77%, 46%, 103%, and 83%, exhibiting significant fluctuations and generally low levels.

In terms of R&D investment, the company’s R&D expenditures during the reporting period were 12.9977 million yuan, 16.6796 million yuan, 18.5699 million yuan, and 17.4585 million yuan, with R&D expense ratios of 4.63%, 5.35%, 4.90%, and 5.11%, lower than the average R&D expense ratios of comparable companies in the industry, which were 8.80%, 11.20%, 9.26%, and 11.66%.

Regarding selling expenses, the company incurred 5.7802 million yuan, 4.9832 million yuan, 6.6280 million yuan, and 5.9534 million yuan during the period, with selling expense ratios of 2.06%, 1.60%, 1.75%, and 1.74%, significantly lower than the average selling expense ratios of comparable companies in the industry, which were 3.69%, 4.50%, 4.07%, and 4.05%.

It is noteworthy that during the reporting period, the company’s cash dividend amounts were 23.2688 million yuan, 32.85 million yuan, 0 million yuan, and 0 million yuan, totaling 56.1188 million yuan, accounting for 21.35% of the total net profit from 2022 to 2024. Based on the actual controlling shareholder’s holding ratio of 85.53%, Liu Shungang received a total dividend of approximately 47.9984 million yuan. The dividend ratios for 2022 and 2023 were relatively high, accounting for 52.58% and 44.98% of that year’s net profit, while there were no dividends in 2024 and from January to September 2025.

Additionally, during the reporting period, the company engaged in regular related party transactions, such as related leases and guarantees. From January to September 2025, the company confirmed rental income of 688.1 thousand yuan from its related party Liaoning Huichuang New Materials Co., Ltd.; the actual controller Liu Shungang and his spouse provided maximum guarantee for the company, with a guarantee amount of 48 million yuan for the year 2023. Furthermore, in April 2025, Liu Shungang planned to increase capital by 5 million yuan to hold 10% of Liaoning Huichuang, which was recognized as a related party. (Produced by Harbor Finance)