The private capital family adds another "ring".

The Ye family from Taizhou, Zhejiang, already owns a listed company, Shuanghuan Transmission (002472. SZ) at the same time, it has recently spun off Zhejiang Huandong Robot Joint Technology Co., Ltd. (hereinafter referred to as "Huandong Technology") to be listed on the Science and Technology Innovation Board, and the "double ring system" layout has emerged.

Behind the "double ring system" is the story of a mother-in-law and her three sons-in-law who bravely entered the capital market together. The three sons-in-law are not only from the same county as the mother-in-law, but also hold important positions in the company, the eldest son-in-law is the chairman, and the second son-in-law and the third son-in-law perform their duties in the purchasing department and sales department.

The family spin-off of Huandong Technology, with a valuation of 3 billion yuan in only four years since its establishment, is a leading enterprise of robot RV reducer in China. Temasek, Hillhouse and others have invested in shares.

Triple jump in revenue and net profit

Founded in 2020, Ring Technology, which is split from Shuanghuan Transmission, has grown rapidly into an industry leader although it has only been established for four years.

Huandong Technology is mainly engaged in the research and development, design, production and sales of high-precision reducers for robot joints, including RV reducers, precision accessories and harmonic reducers. The so-called RV reducer is usually used in the joint part of the industrial robot to make the robotic arm complete the specified action. The main effects include reducing rotational speed, increasing torque, improving motion accuracy, and reducing vibration and noise.

Source: Huandong Technology official website

"The reducer is one of the key transmission components of industrial robots, which has an important impact on the performance and accuracy of industrial robots. It is able to convert the high-speed rotation of the electric motor into the low-speed and high-torque output required by the joints of the industrial robot, so as to ensure the accuracy and stability of the industrial robot when performing the task. In addition, the performance indicators such as efficiency, accuracy, bearing capacity and service life of the reducer directly affect the overall performance of industrial robots. Guo Tao, a senior artificial intelligence expert, said.

A number of robot manufacturers at home and abroad are also customers of Huandong Technology, including Eston (002747. SZ), Efort (688165. SH), Canop, Aishida (002403. SZ), Xinshida (002527. SZ), SIASUN Robotics (300024. SZ), Kaierda (688255. SH), Guangzhou CNC, Huazhong CNC (300161. SZ) and so on.

Such a ring technology achieved profitability in the second year of its establishment, and since then, revenue and net profit have jumped three times. According to the prospectus, from 2021 to 2023 and from January to June 2024 (hereinafter referred to as the "reporting period"), the revenue of Huandong Technology will be 91.4123 million yuan, 169 million yuan, 309 million yuan and 134 million yuan respectively, and the net profit in the same period will be 20.214 million yuan, 50.1783 million yuan, 76.2629 million yuan and 25.5395 million yuan respectively, with an average annual compound growth rate of 94.24%.

To achieve such a performance, it is inseparable from the support of Estun, the largest customer of Huandong Technology. According to the prospectus, the sales revenue of Huandong Technology from Eston was 11.6309 million yuan, 72.8985 million yuan, 160 million yuan and 70.6643 million yuan respectively, accounting for 12.72%, 43.07%, 51.61% and 52.88% respectively. It has increased more than 10 times in 3 years.

"There is a risk that the company will rely heavily on Eston. If there is an adverse change in the operation or financial condition of the major customer, or due to the adjustment of the customer's business development strategy, the change of procurement policy, or the company's failure to meet the customer's iterative business needs in a timely manner, the company's cooperative relationship with the company will be unfavorably changed, and the company cannot continue to expand new customers and markets, which may have an adverse impact on the company's operating results. Huandong Technology said.

In fact, Eston's life was not as good as that of Ring Technology. Estun is known as the "first brother of domestic industrial robots", with an operating income of 3.367 billion yuan in the first three quarters of this year, a year-on-year increase of 4.38%; The net profit attributable to the parent company was -66.6998 million yuan, a year-on-year decrease of 147.55%. This is the third consecutive quarter of a year-on-year decline in net profit.

In the 2024 semi-annual report, Eston explained, "In the first half of this year, due to the decline in demand, the slowdown in investment and the intensification of market competition, revenue growth was lower than expected, gross profit margin declined, personnel expenses increased, depreciation and amortization and other fixed costs increased, which had a greater impact on the company's net profit." ”

However, as the upstream of Estun, the gross profit margin of Huandong Technology has continued to grow in the past three years, and the gross profit margin of the main business from 2021 to 2023 will be 35.48%, 40.68%, and 42.47% respectively. From January to June 2024, it will decrease to 38.14%.

The machine and plant are all from the double ring drive

Huandong Technology has been established for only four years to achieve profitability, gross profit margin continues to rise, and quickly gain a firm foothold in the market, which is inseparable from the controlling shareholder Shuanghuan Transmission behind it and the actual controller family.

According to the prospectus, Shuanghuan Transmission is the largest shareholder of the company, directly holding 61.29% of the equity and is the controlling shareholder. Shuanghuan Transmission is a leading A-share gear enterprise, whose main business is the R&D, design and manufacture of mechanical transmission gears and related parts, and its main products are passenger car gears, commercial vehicle gears, construction machinery gears, reducers and other products, and the main application fields cover the transmission system of automobiles and the power drive devices of new energy vehicles.

Including Huawei, BYD, NIO, Toyota, Volkswagen, etc., are all customers of Shuanghuan Transmission. Due to the continuous expansion of the downstream new energy vehicle market in recent years, Shuanghuan Transmission has also ushered in a performance explosion.

In the five years from 2019 to 2023, the operating income has more than doubled from 3.236 billion yuan to 8.074 billion yuan, and the net profit has increased more than tenfold from 75.0148 million yuan to 834 million yuan. In the first three quarters of 2024, the operating income of Shuanghuan Transmission was 6.743 billion yuan, a year-on-year increase of 14.83%; The net profit was 767 million yuan, a year-on-year increase of 24.89%.

The resources of double-ring transmission have also brought a lot of convenience to Huandong Technology.

Behind the establishment of Huandong Technology in the second year of its establishment, it is to lease machinery and equipment to Shuanghuan Transmission. For this reason, in 2021 and 2022, Huandong Technology will pay rents of 2.2607 million yuan and 4.2656 million yuan. After that, they bought it directly, with an amount of 2.6186 million yuan and 39.4385 million yuan respectively.

The plant and office buildings of Huandong Technology are also from Shuanghuan Transmission. In 2021 and 2022, Huandong Technology will pay rent of 1.5345 million yuan each.

In 2022, Huandong Technology bought this part of the real estate and land from Shuanghuan Transmission. Among them, the total amount of untaxed real estate is 22.7409 million yuan, mainly including manufacturing workshops, steel structure workshops, office buildings, etc., and the corresponding untaxed amount of land is 33.0538 million yuan. The total amount is 55.7947 million yuan.

Shuanghuan Transmission also transferred an invention patent and utility model patent to Huandong Technology free of charge in 2021 and 2022.

At the same time, Shuanghuan Drive is also the supplier and customer of Huandong Technology. According to the prospectus, Huandong Technology purchased blanks, steel, tooling tools, RV reducers, etc. from Shuanghuan Transmission, and the purchase amount in 2021 and 2022 was 5.4218 million yuan and 1.2079 million yuan. In addition, in 2021, it will also purchase assembly lines from Chongqing Shimad Intelligent Manufacturing Co., Ltd., a joint venture with a 30% stake in Shuanghuan Transmission, with an amount of 1.2389 million yuan.

In terms of sales, Huandong Technology also provides processing services, sales of reducers, industrial robots, etc. to Shuanghuan Transmission, Jiangsu Shuanghuan, Chongqing Shimade, and Qiantang Robots, with a total amount of 1.2513 million yuan, 1.3504 million yuan and 132,300 yuan from 2021 to 2023.

Source: "Prospectus".

"After this spin-off, Huandong Technology will continue to standardize and reduce related party transactions to ensure the compliance, reasonableness and fairness of pricing of related party transactions, and will not have a significant adverse impact on the company's independence, financial condition, operating results, etc., and there is no situation that affects the company's independence or damages the interests of the company and shareholders." Huandong Technology said.

The mother-in-law brought her three sons-in-law, employees, and Hillhouse

Share the feast of capital

In addition to many related party transactions, in terms of personnel and executives, Huandong Technology is also inseparable from the support of Shuanghuan Transmission.

The current market position of Shuanghuan Transmission and Ring Technology can be said to be the two husbands and wives of the previous generation of Ye Shanqun and Chen Juhua, as well as the son-in-law of the next generation Wu Changhong and others who have worked hard step by step. Ye Shanqun and Chen Juhua were both born in Yuhuan County, Taizhou City, Zhejiang Province, in the spring of 1980, Ye Shanqun with 3,000 yuan of funds, 5 instrument machine tools, to process motorcycle gears began to lay the first foundation of Shuanghuan.

In 1991, with the development on the right track, Yuhuan County Zhenhua Gear Factory was established (the predecessor of Shuanghuan Transmission), Ye Shanqun was the factory director, and Chen Juhua was the product inspector. In 1992, Wu Changhong entered his own factory as the quasi-eldest son-in-law of Ye Shanqun and Chen Juhua and began to work.

Wu Changhong was born in 1969, and in 2006, Wu Changhong further took charge of Shuanghuan Transmission and became the chairman of the company. Under his leadership, in 2010, Shuanghuan Transmission was successfully listed on the Shenzhen Stock Exchange, becoming the first A-share gear listed company.

Chen Jianfeng was born in 1971 and has served as deputy director of the purchasing department and chairman of the board of supervisors. Jiang Yiqing was born in 1979, with a college degree, and joined the company in 2001 as sales manager, sales director, sales director, and is currently the director and deputy general manager of Shuanghuan Transmission.

In 2016, Ye Shanqun withdrew from the list of actual controllers due to physical health reasons, and the actual controllers of Shuanghuan Transmission and Ring Technology became Wu Changhong, Chen Jianfeng, Jiang Yiqing and Chen Juhua. In addition to controlling 61.29% of the equity of Huandong Technology through Shuanghuan Transmission, Wu Changhong directly holds 5.74% of the equity of Huandong Technology, and Jiang Yiqing and Chen Jianfeng indirectly hold 0.24% of the equity of Huandong Technology through Jiaxing Huanchuang.

It is worth noting that the three sons-in-law Wu Changhong, Chen Jianfeng, and Jiang Yiqing, together with Ye Shanqun and Chen Juhua, are all from the same county: Yuhuan County, Taizhou City, Zhejiang Province. The three daughters of Ye Shanqun and Chen Juhua did not appear among the executives or shareholders of the two companies.

Wind shows that since the listing of Shuanghuan Transmission, Wu Changhong, Chen Jianfeng, Jiang Yiqing, Ye Shanqun, and Chen Juhua have reduced their holdings many times, and the total amount of holdings has reached 358 million yuan based on the stock price and reference market value on the date of the reduction.

Source: wind

In the hands of the three sons-in-law, the development of Shuanghuan Transmission is in full swing, and Huandong Technology will be established in 2020 and the spin-off plan will be launched in 2024.

In addition to the actual controller family, there are many people looking forward to the listing of Huandong Technology.

For example, Zhang Jing, who worked for several years and finally came out. In terms of business, the Ye family does not directly manage Huandong Technology, only Wu Changhong and Jiang Yiqing serve as directors, and Wu Changhong's sister Wu Aiping serves as the chief financial officer. The position of chairman was handed over to Zhang Jing, an "old man" who has senior scientific research strength and has been with his family for 11 years.

Born in 1977, Zhang Jing has a doctorate degree in mechanical design and theory, and from April 2013 to May 2020, he successively served as the director of the R&D department of Shuanghuan Transmission and the president of Shuanghuan Transmission Machinery Research Institute (the predecessor of Huandong Technology business). Since the establishment of Huandong Technology in May 2020, Zhang Jing has served as an executive director, manager, and director of the technology center, and in August 2023, he took over the position of chairman of Huandong Technology.

In August 2021, Zhang Jing invested 15.732 million yuan and subscribed to the new registered capital of Huandong Technology of 2.85 million yuan, becoming the second largest shareholder, holding 10% of the shares.

In January 2023, Huandong Technology carried out a capital increase and share expansion with a scale of 290 million yuan, and introduced investment institutions such as the National Manufacturing Transformation and Upgrading Fund, SDIC China Merchants, Temasek Temasek, Yuhuan State Investment, Zhejiang Equity Service Group Co., Ltd., and Zhejiang University Lianchuang Investment.

In May 2023, Wu Changhong and Zhang Jing transferred a total of 2.33% of the equity of Huandong Technology held by them to Hillhouse, SDIC China Merchants, Zhejiang University Lianchuang Investment, etc., and Wu Changhong received 30 million yuan in equity transfer; Zhang Jing received 40 million yuan, which has been repaid, with a net profit of 24.268 million yuan, and the shareholding ratio has been reduced to 7.4%. Based on this round of prices, the valuation of Huandong Technology has reached 3 billion yuan.

The Ye family started from a small gear factory, and after decades of development, it has not only successfully brought Shuanghuan Transmission to the capital market, but is now also expected to create a second listed company through Huandong Technology. The pinion and precision reducer have become the family's wealth password, helping its worth to reach a new high.