Since 2013, the company's electric storage forklift production and sales have ranked first in the same industry in China for 10 consecutive years, and the sales volume accounted for more than 40% of the domestic electric storage forklift sales in 2022.

However, whether Zhongli shares can succeed in the meeting still needs to be questioned. For example, the largest customer is a subsidiary of a competitor, and the company is also a shareholder of Zhongli Stock; The second largest customer is a Dutch company founded in 2018 with a registered capital of only 1 euro; Five shareholders were part of a surprise investment.

In addition, although Zhongli shares are the first in the subdivision field, but expanded to the entire forklift industry, Zhongli shares are not superior. And this segment is being impacted by the forklift industry leaders.

Zhongli was established in September 2007, at the beginning of its establishment, considering the fierce competition in the internal combustion forklift market, and chose to focus its resources on electric forklifts. Belong to the early "crab-eating" batch.

In the early days of electric forklift trucks in China, lead-acid batteries are mainly used as power, and there are many shortcomings, such as fewer charging and discharging times, short service life, high maintenance requirements, greater impact on the environment, and longer charging time.

After that, lithium batteries "came out", not only faster than lead-acid batteries, longer service life, lower maintenance costs, and green environmental protection. Compared with lead-acid batteries, lithium batteries have the characteristics of lighter weight, smaller volume and high energy density, so lithium battery forklift trucks are more compact and the vehicle stability is higher.

According to the data of the Industrial Vehicle branch of the China Construction Machinery Industry Association, the sales volume of lithium battery forklifts in China was only 8681 units in 2017, and rapidly increased to 433,410 units in 2022, with a compound annual growth rate of 118.61%, accounting for the proportion of electric forklift sales increased from 4.26% in 2017 to 64.23% in 2022. With the continuous progress of lithium battery technology, the process of replacing lead-acid batteries with lithium batteries will accelerate.

According to the meeting draft of Zhongli Shares, the company has ranked first in domestic lithium battery forklift production and sales for four consecutive years since 2019. The operating income of Zhongli shares also increased from 2.477 billion yuan in 2020 to 5.011 billion yuan in 2022, and the net profit returned to the mother also increased from 221 million yuan to 627 million yuan.

It should be pointed out that although Zhongli shares have achieved good results in the field of segmentation, there is still a big gap compared with the leader in the field of forklift trucks. According to the ranking data of global forklift manufacturers in 2022 released by MMH Modern Material Handling magazine in the United States, Zhongli Shares ranked 11th with a sales revenue of 720 million US dollars. A-share listed companies Hangzhou Fork Group and Anhui Forklift Group Co., Ltd. ranked eighth and seventh, respectively, with related sales revenue of $2.069 billion and $2.258 billion. Zhongli's stake is about a third of Hangfork's.

Anhui Forklift Group Co., Ltd. is the controlling shareholder of listed company Anhui Heli. In the draft of Zhongli shares, Anhui Heli was listed as a comparable company in the same industry by Zhongli Shares. From the perspective of research and development costs, in the first half of 2023, the research and development costs of Anhui Heli and Hangfork Group were 411 million yuan and 346 million yuan, respectively, while Zhongli shares were only 764.06 million yuan. In addition, the lowest value of Anhui Heli and Hangfork Group from 2020 to 2022 is 538 million yuan, while the highest value of Zhongli shares is only 145 million yuan.

In terms of R&D expense ratio, from 2020 to 2022 and the first half of 2023, Anhui Heli and Hangfork Group have a minimum value of 3.93%, while Zhongli shares have a maximum value of only 3.07%.

That is, the revenue of these two leading companies is not only higher than that of Zhongli shares, but also the R&D expenses and R&D expense ratio are higher than that of Zhongli shares. It is worth mentioning that these two internal combustion forklift truck leaders are making efforts in the field of lithium battery forklifts.

Hangfork Group's operating income in the first three quarters of 2023 was 12.515 billion yuan, although only an increase of 10.12%. However, its net profit returned to the mother was 1.305 billion yuan, up 74.89 percent year-on-year. In this regard, Hangfork Group said in the announcement that the reasons for the growth of performance include optimizing the layout of the main business, making up for shortfalls and improving energy, actively implementing the "new energy strategy", and achieving rapid growth in the production and sales scale of the company's lithium electric new energy forklift trucks and international business.

Anhui Heli's situation is similar, the first three quarters of 2023 operating income of 13.132 billion yuan, although only an increase of 9.9%. However, its net profit from the parent was 987 million yuan, an increase of 43.88 percent year-on-year. In this regard, Anhui Heli said in the announcement that during the reporting period, the company focused on the development goals of "electrification, low-carbon, networked and intelligent", and actively opened up domestic and international markets. The company achieved rapid growth in the production and sales scale of lithium new energy forklift trucks and international business, and promoted the company's operating performance year-on-year.

In the first half of 2023, the main business income of Zhongli Shares was 2.822 billion yuan, an increase of 20.64%. The year-on-year growth rate of electric forklifts, which accounted for more than 70% of the main business income, slowed to 19.42%. The previous year-on-year growth of Zhongli shares in 2021 and 2022 was 83.51% and 20.62%.

So, how long can Zhongli Shares, which rely on "first-mover advantage" to win the first place in the subdivision field, maintain its first place under the impact of the leader in the forklift field?

Our number one client has multiple identities

In terms of international competitors, the report of Zhongli shares lists Toyota Automatic Loom Co., LTD., Kion Group, Jungheinrich Group, Mitsubishi Wujishi Co., LTD., Crown Equipment and so on.

It is worth mentioning that the international competitor Kion Group has a company named Linde (China) Forklift Co., LTD. (hereinafter referred to as "Linde Forklift"). Linde forklifts will be the largest customer of Zhongli shares from 2020 to 2022 and in the first half of 2023. The relevant income was 267 million yuan, 545 million yuan, 667 million yuan and 220 million yuan, accounting for 10.80%, 12.97%, 13.31% and 7.74% of the operating income respectively, of which from 2020 to 2022, both the amount and the proportion increased continuously. A certified public accountant told reporters that a competitor's subsidiary is the first largest customer, and regulators may be concerned about the independence and continued profitability of the company.

And Linde forklift is also a shareholder of Zhongli shares. In July 2019, Changxing Middle Spring Investment Partnership (Limited partnership) controlled by He Jinhui, the actual controller of Zhongli Shares, transferred 4.99% of the registered capital of Zhongli shares to Linde Forklift Truck at a price of 83.9521 million yuan.

Although 4.99% and 5% look similar, there is a big difference. According to the official website of the CSRC, the controlling shareholders of listed companies and shareholders holding more than 5% are collectively referred to as major shareholders, and major shareholders are subject to certain restrictions in reducing their holdings. For example, major shareholders of listed companies, directors and supervisors plan to reduce their shares through centralized bidding trading on the stock exchange, and should report to the stock exchange and disclose the reduction plan in advance 15 trading days before the first sale, and the stock exchange will be filed.

Observer network preliminary calculation, if the shares reached the target valuation of 8.784 billion yuan. After considering the dilution effect, the valuation of the shares in Linde forklift hands is 348 million yuan, which is 264 million yuan higher than the transfer price of 83.95.21 million yuan, and the value-added rate is 314.41%.

In addition, the first declaration draft of Zhongli Shares was announced in July 2022, so Innovation Works, Jiaxing Dingyun Investment, Advanced Manufacturing Industry Fund, Anji Liangshan Investment, Hainan Chengyi Consulting and other five companies belong to the new shareholders of Zhongli shares within 12 months before submitting the application materials for listing this issue, that is, they are assault shares.

In addition to equity, the second largest customer of Zhongli shares in the first half of 2023 EQUIPMENT 4 U B.V. There's something to watch. From 2020 to 2022 and in the first half of 2023, the relevant income of Zhongli shares to the dealer was 7.352,800 yuan, 24.696,900 yuan, 81,533,800 yuan and 71,465,900 yuan, respectively, of which the first half of 2023 increased by 161.89% year-on-year.

As a customer with half a year's relevant revenue of 70 million yuan, EQUIPMENT 4 U B.V. 's registered capital is only 1 euro. In response, Zhongli Shares said in a reply letter that the registered capital of Dutch companies, especially private companies, is generally not set too high, and the registered capital does not reflect the company's real financial strength. EQUIPMENT 4 U B.V. has a registered capital of €1, which does not affect the investment of its shareholders in the business. In addition, dealers mainly rely on their customers, channel resources to carry out business, and do not require a large amount of capital investment.

A partner of a well-known accounting firm told the Observer network, "In China, under normal circumstances, shareholders bear responsibility for the amount of capital. Those with smaller registered capital may bear less responsibility."

As for whether there are potential risks if there are disputes, lawsuits, enforcement and other situations, the registered capital is only 1 euro, as of press release, Zhongli Shares has not replied to the interview letter.