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Tengda Technology, Stainless Steel Fastener Giant, Goes Publ

[Abstract]:Tengda Tech gets listed on SZSE Main Board; IPO proceeds fuel capacity expansion for global leadership in fasteners.

On January 19, 2024, Shandong Tengda Fastener Technology Co., Ltd. (hereinafter referred to as "Tengda Technology"), a key player in China's stainless steel fastener industry, officially listed on the Main Board of the Shenzhen Stock Exchange. The company's stock abbreviation is "Tengda Technology," with the stock code "001379." This listing marks Tengda Technology as the first enterprise in Shandong Province to successfully access the capital market on the Shenzhen Stock Exchange's Main Board since the implementation of the registration-based IPO system.

According to the listing arrangements, Tengda Technology publicly issued a total of 50 million new shares to the market, with a determined issue price of 16.98 yuan per share. On the first trading day, the market reacted positively, with the stock opening at 28.00 yuan—an opening increase of 64.90% compared to the issue price, reflecting investors' recognition of and confidence in its development prospects.

Deep Cultivation in Niche Markets, Seizing Industry Opportunities

Since its establishment in December 2015, Tengda Technology has remained dedicated to the technical research, manufacturing, and sales services of stainless steel fastener products. After years of steady development, the company has grown into one of the leading enterprises in China's stainless steel fastener sector in terms of production scale. Thanks to its professional advantages and market position in specific fields, it has been recognized as one of the second batch of Manufacturing Single Champion Enterprises in Shandong Province.

As a fundamental mechanical component, fasteners are vividly referred to as "industrial rice" due to their extremely wide range of applications, covering almost all industrial sectors and daily life areas, such as real estate, machinery, power and energy, railways and highways, transportation, communication equipment, furniture manufacturing, and home appliances. The variety and quality reliability of these products directly impact the performance and quality of the host products. Since 2019, the rapid development of various downstream industries globally has effectively driven market demand for fastener products, prompting an overall restorative growth trend in the industry. According to relevant statistical data from Wind, from January to November 2021, the average monthly output of metal fasteners in China increased to 863,600 tons, an increase of 54,900 tons compared to the 2020 monthly average. Additionally, data released by the General Administration of Customs shows that in 2022, China's total export volume of fastener products reached 4.9788 million tons, a year-on-year increase of 1.26%. After more than twenty years of market-oriented development and competition, the overall profit level of the industry has gradually stabilized.

Against the macro backdrop of this sustained industry prosperity, Tengda Technology has demonstrated outstanding sales performance over the past three years, consistently ranking among the top three in the industry, with particularly significant advantages in export business. According to data from its public prospectus, from 2020 to the first half of 2023, the company's stainless steel fastener production volumes were 51,483.34 tons, 66,811.22 tons, 69,738.87 tons, and 37,759.22 tons, respectively. During the same periods, sales volumes were 52,485.74 tons, 70,777.79 tons, 77,141.07 tons, and 35,528.05 tons. A relevant certification document issued by the China General Machine Components Industry Association in January 2023 also confirmed that from 2020 to 2022, the production volume and sales scale of Tengda Technology's stainless steel fastener series products consistently ranked among the top three in the industry.

Parallel Advancement in Technological Innovation and Smart Manufacturing, Winning Global Trust

Although the overall market size of China's fastener industry is expanding rapidly, there is still room for improvement in certain high-end areas when compared to the world's top manufacturing technology levels. Facing this reality, Tengda Technology has continuously increased its R&D investment in recent years, placing high importance on technological innovation, and has now achieved significant breakthroughs in multiple key process technologies. The prospectus reveals that the company has not only established a Shandong Provincial Enterprise Technology Center but also possesses the Shandong High-Performance Stainless Steel Fastener Engineering Laboratory, and is one of the few enterprises in the industry to obtain CNAS National Laboratory accreditation. Furthermore, leveraging its technical strength and industry influence, Tengda Technology has actively participated in the formulation of national standards, successively participating in the drafting and revision of four national standards, including "Hexalobular socket flange head bolts," "Technical specifications for spring washers - Conical spring washers," "Assemblies of bolts or screws and conical spring washers," and "Fasteners for nuclear power plants - Part 3: Stainless steel bolts, screws and studs."

Of particular note, addressing industry characteristics such as the complex range of specifications and models for fastener products, large production batches, and short customer delivery deadlines, Tengda Technology has made in-depth layouts and investments in the transformation and upgrading of smart manufacturing. The company has not only extensively introduced automation equipment in key production processes to improve efficiency but has also established a full-process quality traceability system covering everything from raw material warehousing to finished product delivery, effectively ensuring the stability and consistency of product quality. Simultaneously, by deploying and implementing various information management systems, it has achieved real-time monitoring and highly efficient collaborative management of production operations and sales activities. This series of practices in intelligence and digitalization has led to the company's successful selection as one of the "Second Batch of Pilot Demonstration Enterprises for 'Modern Advantageous Industrial Clusters + Artificial Intelligence' in Shandong Province" and its recognition as a "Zaozhuang City Smart Manufacturing Pilot Demonstration Enterprise."

Through continuous deep cultivation in the two core areas of R&D innovation and smart manufacturing, Tengda Technology has established a strong brand reputation and significant market influence in the global stainless steel fastener industry. Particularly in the international market, the company's products are exported to over 40 countries and regions worldwide, including Germany, Italy, Japan, the UK, and Australia, leading to its selection as a sample enterprise for China's Foreign Trade Export Leading Index. By demonstrating excellent rapid order response capabilities and efficient global supply chain management, Tengda Technology has established long-term, stable strategic partnerships with internationally renowned fastener traders such as the WURTH GROUP and SCHAFER + PETERS GMBH.

Launching a New Capital Engine, Accelerating Capacity Expansion

With this successful listing on the A-share market, Tengda Technology plans to primarily direct the raised funds toward the following areas: the "Stainless Steel Fastener Capacity Expansion and Technological Transformation Project," the "Fastener Product Line Extension and Supporting Production Line Construction Project," the "Stainless Steel Fastener Production and Smart Warehousing Base Construction Project," and the supplementation of working capital required for the company's daily operations. The smooth implementation of these fundraising investment projects will strongly support the company in further expanding its production scale, optimizing and enriching its product structure, while also meeting the new working capital demands brought about by its continuous business expansion. Evidently, the support from the capital market provides a solid financial guarantee for Tengda Technology to accelerate its established development strategy and realize its vision of becoming a globally influential professional fastener production and integrated service provider.

According to data in the prospectus, from 2020 to the first half of 2023, the comprehensive capacity utilization rates of Tengda Technology's main products (including bolts, nuts, studs, and washers) reached 72.82%, 92.53%, 88.48%, and 92.37%, respectively, remaining at a high overall level. As the IPO fundraising investment projects are completed and new capacity is gradually released, the long-standing capacity bottlenecks faced by the company are expected to be significantly alleviated. This will support the continued rapid growth of its sales revenue and further consolidate and enhance its competitive position in the global market.

Specifically analyzing the fundraising investment projects, the "Stainless Steel Fastener Production and Smart Warehousing Base Construction Project" is located in Dainan Town, Jiangsu Province. This region possesses highly complete fastener-related industrial supporting resources and a certain advantage in technical talent. The implementation of this project will help Tengda Technology better integrate upstream and downstream industrial chain resources, achieve the strategic goal of cost reduction and efficiency enhancement, and thereby continuously improve the company's overall profitability.

This successful listing on the A-share Main Board is a significant milestone in the development history of Tengda Technology, marking the official opening of a new chapter for the company to deeply integrate with the capital market and leverage capital strength to grow bigger and stronger. Looking to the future, the company states that it will continue to adhere to the dual-wheel drive of technological innovation and production model innovation, continuously increase investment in technology research and development, fully advance the automation and intelligent manufacturing process of stainless steel fastener production, and steadily move towards the strategic goal of becoming a globally influential professional fastener manufacturer and integrated service provider.

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Tengda Technology, Stainless Steel Fastener Giant, Goes Publ

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