IPO New Observation | Xinrui Electronics passes the Beijing Stock Exchange review, with on-site inquiries about performance stability and sustainability

Ask AI · New Rui Electronics’ performance growth slows down—how does technology ensure sustainable growth?

On April 3, Linhai City New Rui Electronics Technology Co., Ltd. (hereinafter referred to as “New Rui Electronics”) officially proceeded to the review of the Beijing Stock Exchange (hereinafter referred to as the “BSE”). The results of the deliberation meeting show that New Rui Electronics meets the issuance requirements, listing requirements, and information disclosure requirements, and successfully passed the review.

At the on-site review meeting of the Listing Committee on the same day, the company was questioned about the stability and continuity of its performance. The Listing Committee asked New Rui Electronics to combine factors such as technological advancement, the expansion of new customers, in-hand orders, and post-period performance to explain the stability and sustainability of the company’s performance, and whether there is a risk of performance decline.

Turnover enters a steady period; profitability quality improves but growth slows

New Rui Electronics’ principal business is the R&D, production, and sales of industrial robot control systems and components, as well as servo systems and components. It is one of the earlier domestic companies that carried out industrial robot control system R&D.

The prospectus shows that from 2023 to 2025, New Rui Electronics’ operating revenue was 2.04 billion yuan, 3.01 billion yuan, and 3.18 billion yuan, respectively; its net profit was 30.966 million yuan, 55.2637 million yuan, and 59.0482 million yuan, respectively. After rapid growth, it has entered a steady period; profitability quality has improved significantly, but the growth rate has slowed.

In addition, in the prospectus, New Rui Electronics released its 2026 performance forecast. It is expected that full-year revenue will be 3.9 billion yuan, up 22.2% year over year; and that it will be able to realize a net profit attributable to the parent of 65.039 million yuan, up 10.2% year over year.

From 2023 to 2025, the net cash flow from operating activities of the company was 10.7578 million yuan, 22.0307 million yuan, and 26.9267 million yuan, respectively. Although the net cash flow from operating activities of the company has shown a year-by-year growth trend, the net cash flow from operations is less than 50% of net profit.

This time, when New Rui Electronics applies to list on the BSE, it plans to publicly issue no more than 6.4 million shares (excluding the over-allotment option). The company plans to raise about 1.4 billion yuan for the upgrade and renovation of its production center, the construction of its R&D center, and replenishing working capital.

Among them, the “production center upgrade and renovation project” and the “R&D center construction project” require purchasing real estate from outside. As of the date the prospectus was signed, New Rui Electronics had not yet obtained the relevant properties for those projects. The company has signed a “Plant Purchase and Sale Intention Agreement,” but there is still some uncertainty regarding the acquisition of the premises for the fund-raising projects.

It is worth noting that although New Rui Electronics’ cash flow is not sufficient, the company still provides dividends every year. In August and October 2023, the company conducted cash dividends of 6 million yuan and 10 million yuan, respectively. In October 2024, it also issued bonus shares once. New Rui Electronics is issuing dividends continuously while, at the same time, raising funds to replenish working capital, and the reasonableness of this has been called into question.

In the two rounds of inquiries at the BSE, the BSE focused on the necessity of the fund-raising projects, their implementation feasibility, and the reasonableness of their scale.

In addition, in both rounds of inquiries, the BSE also asked about the fairness of procurement prices. At the same time, it required the issuer to explain whether the issuer and its related parties, former employees, etc. have any relationship or other dealings of interest with the two motor suppliers, and whether there is any transfer of interests.

Risk of lawsuits** not yet eliminated; issues regarding the controlling shareholder’s control have been repeatedly questioned**

It is worth noting that during the critical period of New Rui Electronics’ IPO, the company was sued by peer enterprises.

The company received a summons from the Suzhou Municipal Intermediate People’s Court of Jiangsu Province in November 2025. It was filed by Shenzhen Inovance Technology Co., Ltd. (hereinafter referred to as “Inovance Technology”) and other plaintiffs, for civil litigation. The causes of action include unfair competition behaviors such as infringement of technical secrets and business operation secrets. Inovance Technology is a leading domestic enterprise in industrial robots. It alleges that 25 defendants, including New Rui Electronics, infringed its technical and commercial trade secrets, and the claimed compensation amount is as high as 30 million yuan.

Up to now, the lawsuit has not yet been heard, and there are no verdicts, rulings, or information about enforcement. The BSE has focused on the progress of this lawsuit, the likelihood of losing the case, the impact on the independence of the company’s core technology, and whether losing the case would lead the company to bear large compensation that would constitute a major adverse impact on operating performance and its ability to sustain operations.

In addition, in the two previous rounds of inquiries, the BSE also mentioned issues regarding the identification and stability of the actual controlling party. The company’s controlling shareholder and actual controller is Zhang Jizhou, who directly holds 34.52% of the company’s shares. Through the employee shareholding platform Xinrui Hongjian, he indirectly controls 3.8% of the shares’ voting rights, for a total control of 38.32% of the shares. In addition, Zhang Jizhou and Dong Liqiang, a shareholder holding 16.19%, signed a concerted action agreement. As a result, Zhang Jizhou in total controls 54.51% of the shares’ voting rights, forming a relatively concentrated control structure.

For institutional shareholders, the two private funds—Cixi Yiqun and Jiaxing Yiqun—collectively hold 5% of the company’s shares. In terms of corporate governance, the company has established a board of directors, an audit committee, and a senior management team. The board of directors consists of 7 directors, including 3 independent directors. The company’s actual controller Zhang Jizhou and the board secretary Xu Tianjun are spouses, but the company claims it has established a relatively complete system for managing related-party transactions and a mechanism for avoiding voting.

After the completion of this issuance, the shareholding proportion of the company’s actual controller Zhang Jizhou will further decline, and weakened control may trigger governance risks. At the same time, the lock-up commitment period for concerted-action parties such as Dong Liqiang is only 36 months after listing, and there is pressure to sell after the shares are released from the lock-up.

Xinjing News Beike Finance reporter Zhang Xiaochong

Editor Yue Caizhou

Proofreader Mu Xiangtong