Text by: Qian Fenfang, Researcher at Quanheng Finance IQHCJ

Edited by: Xu Hui

Guangdong Bangze Chuangke Electrical Appliance Co., Ltd. (hereinafter referred to as 'Bangze Chuangke'), a registered enterprise, is set to list on the Beijing Stock Exchange, with Dongguan Securities serving as its sponsor. The company plans to issue up to 10 million shares (excluding the over-allotment option) or up to 11.5 million shares (including the over-allotment option) to unspecified qualified investors. It intends to allocate RMB 400 million of the raised funds to the Bangze Chuangke Electrical Appliance Intelligent Manufacturing Base Project and the Headquarters and R&D Center Project.

Bangze Chuangke has a relatively low stake held by its actual controller, with concerted parties controlling 70% of the shares. It has previously received a regulatory attention letter. The company primarily focuses on overseas sales, with OEM business contributing 30% of its revenue. Both revenue and net profit growth have slowed down. It heavily relies on overseas e-commerce platforms, faces high direct material costs, and has low R&D investment. The company also has substantial accounts receivable and rising inventory balances, with a turnover rate below the industry average.

Low Stake Held by Actual Controller, Concerted Parties Control 70%, Previous Regulatory Scrutiny

As of the prospectus signing date, Chen Chi directly holds 18.05 million shares, representing 34.26% of the total share capital, making him the controlling shareholder. Zhang Yong directly holds 12.095 million shares, accounting for 22.96% of the total share capital, and serves as the vice chairman. Xu Ning directly holds 7.5 million shares, representing 14.24% of the total share capital, and indirectly holds 1.26% through Dongguan Zekai and 0.11% through Dongguan Zeyu, totaling a direct or indirect stake of 15.61%. Xu Ning also serves as the chairman.

Chen Chi and Xu Ning are married. On January 1, 2018, Chen Chi, Zhang Yong, and Xu Ning (hereinafter referred to as the 'three parties') signed a 'Concerted Action Agreement,' whereby they exercise shareholder and management rights through consensus in major decision-making processes, forming a concerted action arrangement. Based on the company's operations and the agreement, Chen Chi, Xu Ning, and Zhang Yong are the joint actual controllers, collectively holding 72.83% of the shares directly or indirectly. As of the prospectus signing date, Chen Chi is the controlling shareholder, and the actual controllers are Chen Chi, Zhang Yong, and Xu Ning, with no changes during the reporting period.

During the reporting period, Bangze Chuangke received a regulatory work reminder from the Listing Review Department of the National Equities Exchange and Quotations (NEEQ) and a regulatory attention letter from the Guangdong Securities Regulatory Bureau. On July 18, 2024, the NEEQ issued a 'Regulatory Work Reminder Regarding Guangdong Bangze Chuangke Electrical Appliance Co., Ltd.,' citing misreported financial data in the listing application, violating information disclosure regulations. On September 11, 2024, the Guangdong Securities Regulatory Bureau issued a regulatory attention letter (Guangdong Securities Regulatory Bureau Letter [2024] No. 1162), pointing out issues with irregular accounting, internal control deficiencies, and irregular information disclosure, violating relevant laws and regulations.

Quanheng Finance IQHCJ noted that at the end of each reporting period, the company's monetary funds were RMB 97.3322 million, RMB 162.3 million, and RMB 236.4 million, accounting for 21.71%, 26.00%, and 33.49% of current assets, respectively. The monetary funds mainly consisted of bank deposits, exceeding half of the company's total fundraising amount.

Focus on Overseas Sales, OEM Business at 30%, Slowing Revenue and Profit Growth

Bangze Chuangke specializes in the independent R&D, original design, transnational production, global supermarket channel/internet brand sales, and global localization services of office and household appliances. From 2023 to 2025, the company's operating revenue was RMB 1.1681 billion, RMB 1.5098 billion, and RMB 1.7889 billion, respectively, with net profits of RMB 107.6 million, RMB 147.9 million, and RMB 161.1 million, respectively. Both revenue and net profit growth have slowed; from January to June 2026, the operating revenue was RMB 937.7 million, with a net profit of RMB 91.1021 million.

The company expects its operating revenue from January to September 2026 to be approximately RMB 1.3 billion to RMB 1.4 billion, representing a year-on-year change of -4.02% to 3.37%. Net profit attributable to the parent company's owners is expected to be approximately RMB 115 million to RMB 130 million, representing a year-on-year change of -4.64% to 7.80%. After deducting non-recurring gains and losses, the net profit attributable to the parent company's owners is expected to be approximately RMB 113.5 million to RMB 128.5 million, representing a year-on-year change of -4.41% to 8.22%.

Bangze Chuangke's products are mainly divided into two categories: office appliances and household appliances. Office appliances include paper shredders, laminators, and consumables, while household appliances include kitchen small appliances and living appliances. Kitchen small appliances include vacuum sealers and consumables, handheld blenders, etc., while living appliances include air purifiers, etc. During the reporting period, the company's revenue from office appliances and consumables was RMB 780.5 million, RMB 1.0499 billion, and RMB 1.1861 billion, accounting for 67.30%, 69.95%, and 66.66% of the main business revenue in each period, respectively. The company's revenue from household appliances and consumables was RMB 379.3 million, RMB 451.1 million, and RMB 593.3 million, accounting for 32.70%, 30.05%, and 33.34% of the main business revenue in each period, respectively.

During the reporting period, sales revenue from paper shredders, the company's main product, accounted for 59.02%, 56.14%, and 50.92% of the main business revenue in each period, respectively. In recent years, with the development of internet technology, paperless offices have reduced the use of paper documents, thereby impacting the market for office appliances such as paper shredders.

During the reporting period, the company's products were sold globally, with customers in multiple countries and regions, including North America, Europe, and China. Overseas sales revenue amounted to RMB 1.1184 billion, RMB 1.4556 billion, and RMB 1.7308 billion, accounting for 96.43%, 96.98%, and 97.27% of the main business revenue, respectively.

During each reporting period, Bangze Chuangke's ODM business revenue was RMB 413.6 million, RMB 565.7 million, and RMB 631.5 million, accounting for 35.66%, 37.69%, and 35.49% of the main business revenue in each period, respectively. ODM business is one of the company's main sources of income.

In terms of ODM business, Bangze Chuangke leverages its transnational production bases in 'China + Vietnam' to continuously supply products and services to supermarkets/internet channels in Europe, the Americas, and the Asia-Pacific region, such as AmazonBasics (Amazon's private label), Walmart, Sam's Club, Best Buy, Staples, and Office Depot in the United States; Lidl and ALDI in Europe; and Kmart in Australia. It has gradually established a trusted product manufacturing system, laying a solid foundation for the company's sustained and stable performance development.

Bangze Chuangke conducts online sales through third-party e-commerce platforms such as Amazon, Walmart, Shopify independent stores, and JD.com's self-operated platform, covering mainstream e-commerce channels. As of December 31, 2025, some models of the company's paper shredders and vacuum sealers ranked in the top 3 in sales of similar products in major regions on the Amazon platform.

During the reporting period, Bangze Chuangke's comprehensive gross profit margins were 39.43%, 40.12%, and 40.52%, higher than the comparable industry averages of 31.94%, 30.26%, and 31.07%.

Dependence on Overseas E-commerce Platforms, High Direct Material Costs, Low R&D Investment

Since 2014, Bangze Chuangke has been engaged in cross-border e-commerce business, primarily selling products through overseas online e-commerce platforms such as Amazon, Walmart, and Shopify independent stores. Currently, platforms like Amazon have evolved into mature global open e-commerce platforms. However, significant changes in the business models, operating strategies, or operational stability of these e-commerce platforms may adversely affect the company's operating performance. During the reporting period, sales revenue realized through overseas e-commerce platforms such as Amazon accounted for 60.54%, 58.49%, and 60.31% of the main business revenue, respectively, indicating a certain dependence on overseas online third-party e-commerce platforms.

Bangze Chuangke's main business is the R&D, production, sales, and global localization services of office and household appliances. The company purchases a wide variety of raw materials and components, primarily including electronic appliances, plastic raw materials, metal products, plastic products, and packaging materials, categorized by type.

During the reporting period, direct material costs accounted for 53.12%, 53.42%, and 51.19% of the main business costs, respectively, representing a relatively high proportion. Affected by the macroeconomic environment and demand, the purchase prices of the company's main raw materials have fluctuated to some extent. For example, during the reporting period, the average purchase prices of plastic raw materials were RMB 9.66/kg, RMB 9.89/kg, and RMB 9.17/kg, respectively.

During the reporting period, Bangze Chuangke's R&D investment amounts were RMB 27.1347 million, RMB 37.8886 million, and RMB 45.6662 million, accounting for 2.32%, 2.51%, and 2.55% of the operating revenue in each period, respectively. As of December 31, 2025, the company had 122 R&D personnel, accounting for 6.39% of the total number of employees.

Substantial Accounts Receivable, Rising Inventory Balances, Turnover Rate Below Industry Average

At the end of each reporting period, the book balances of Bangze Chuangke's accounts receivable were RMB 131.1 million, RMB 174 million, and RMB 150.7 million, accounting for 29.25%, 27.88%, and 21.36% of current assets in each period, respectively, representing a relatively high proportion. The company has substantial accounts receivable balances.

At the end of each reporting period, the book balances of the company's inventory were RMB 187.7 million, RMB 260.1 million, and RMB 289.8 million, accounting for 30.12%, 28.98%, and 26.00% of total assets, respectively. The company has substantial inventory book balances, with a relatively high proportion of assets. The balances of inventory allowances for obsolescence were RMB 6.7851 million, RMB 8.2394 million, and RMB 7.8943 million, accounting for 3.62%, 3.17%, and 2.72% of the inventory balances at the end of each period, respectively.

During the reporting period, Bangze Chuangke's inventory turnover rates were 4.15 times/year, 4.04 times/year, and 3.87 times/year, lower than the industry average of 5.77 times/year, 6.37 times/year, and 6.55 times/year, respectively. The main reasons are that the company's private label business primarily sells through overseas e-commerce platforms such as Amazon, Walmart, and Shopify independent stores, with a high proportion of overseas sales and long product transportation cycles. To ensure that local inventory can meet timely delivery demands, the company typically stocks inventory in overseas warehouses based on estimated online sales volumes for the next approximately 3 months. Combined with the longer sea freight cycles, this results in substantial ending inventory balances. The company has established three major manufacturing bases in Dongguan, Guangdong; Beiliu, Guangxi; and Hai Duong, Vietnam. Raw materials and semi-finished products involve cross-regional and cross-border flows, and core components such as knife shafts and motors are manufactured in-house, resulting in a long production chain. This leads to higher ending inventory and a lower inventory turnover rate.

Under the registration-based IPO system, IPO companies should pay more attention to the quality of information disclosure, whether their operating indicators meet listing requirements, and their subsequent sustainable operating conditions. Given the limited space, Quanheng Finance IQHCJ cannot address all aspects in detail. The content of this article is derived from information sources and serves as a reminder from Quanheng Finance IQHCJ to stakeholders and investors about the enterprise risks that warrant more attention. It does not serve as a comprehensive reference. We recommend that investors review the complete prospectus of IPO companies before making decisions.