Tengya Precision plans to raise no more than 120 million yuan through private placement, while IPO fundraising projects achieved actual returns of less than 1.4 million yuan in the first three quarters of last year!

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Tengya Precision plans to raise no more than 120 million yuan through a private placement, but its IPO-funded projects achieved less than 1.4 million yuan in actual benefits in the first three quarters of last year! The company responds that it will ensure the smooth implementation of the new projects funded by the offering.

Reporter | Zhang Guangri | Edited by | Wu Yongjiu

Recently, Tengya Precision announced a private placement plan. The “Daily Economic News” reporter (hereinafter referred to as the reporter) noticed that since its listing, the company has generally experienced revenue growth without profit growth. Previously, the company’s IPO-funded projects performed poorly, with two major projects failing to meet expected returns, and the actual benefits for the first three quarters of 2025 totaling less than 1.4 million yuan. Additionally, the investment commitments for R&D projects within the IPO funding have been significantly reduced. In an interview, the company stated it will increase marketing efforts, expand product application scenarios, deeply explore cost reduction and efficiency improvement potentials, and strive to realize the expected benefits of the IPO-funded projects as soon as possible. To ensure the smooth implementation of the new projects, the company has already built sufficient reserves in personnel, technology, and market areas.

Shortly after reaching a new high in stock price, after market close on March 22, 2026, Tengya Precision issued a plan for a simplified issuance of shares to specific targets for 2025. The plan shows that the company intends to issue shares to specific targets through a simplified process, raising no more than 120 million yuan (including issuance costs). The net funds raised after deducting issuance costs will be used for three projects: 1. Tengya Precision Vietnam Power Tools Manufacturing Project; 2. Tengya Precision Anhui Garden Tools Manufacturing Project; 3. Supplementary working capital.

(Source: Screenshot from Tengya Precision announcement)

Tengya Precision’s main business involves the research, production, and sales of power tools and building hardware products, with core products including gas nail guns and their supporting nails and gas cylinders; main building hardware products include vents, inspection ports, and mid-to-high-end building hardware such as floor supports.

Tengya Precision was listed on the ChiNext Board in 2022. Since listing, the company has experienced revenue growth without profit growth. According to Tonghuashun, from 2022 to 2024, Tengya Precision’s revenue was 435 million, 463 million, and 607 million yuan respectively, with net profits of 50.77 million, 4.76 million, and 10.39 million yuan.

In 2025, Tengya Precision continues to see revenue growth without profit growth. The company’s performance forecast for 2025 shows that revenue will slightly increase compared to 2024, but net profit is expected to be between 4 million and 5.1 million yuan, a decrease of 50.93% to 61.52% compared to 2024; net profit after deducting non-recurring gains and losses is expected to be between 1.4 million and 2.1 million yuan, down 77.89% to 85.26% from the same period in 2024.

(Source: Screenshot from Tengya Precision announcement)

Factors such as increased management, sales, and R&D expenses have led to poor net profit performance in 2025:

1. To support the company’s development strategy, it actively promotes organizational restructuring and talent pipeline building, resulting in increased management expenses year-on-year;

2. The company continues to expand market development and customer acquisition efforts, actively deploying domestic and international markets, leading to increased sales expenses;

3. The company continues to increase R&D investment, actively developing new technologies and products, which raises R&D expenses;

4. Fluctuations in the international foreign exchange market have reduced foreign exchange gains and losses, negatively impacting net profit.

Despite poor performance, Tengya Precision’s stock price has been very strong. On March 16, 2026, during trading, the stock price reached a high of 26.41 yuan, setting a new record since listing. In 2024, the stock price once fell below 6 yuan.

During this period of rising stock prices, the major shareholder holding over 5% completed a reduction plan, cashing out over 50 million yuan. According to Tengya Precision’s announcement, from March 11 to March 12, 2026, Ms. Ma Shufang reduced her holdings by 2.7122 million shares (about 1.91% of total shares) through block trades at an average price of 19.15 yuan, cashing out approximately 51.94 million yuan. After this reduction, Ms. Ma still holds about 5% of Tengya Precision’s shares, remaining the sixth-largest shareholder.

(Source: Screenshot from Tengya Precision announcement)

The IPO-funded projects of Tengya Precision have not met expectations. The funds raised through IPO were allocated to three projects: 1. Pneumatic Tool Factory Construction Project (hereinafter referred to as the Pneumatic Tools Project); 2. High-Quality Hardware and Pneumatic Tool Consumables and Parts Manufacturing Base Project (Manufacturing Base Project); 3. R&D Center and Information Technology Construction Project (R&D Project).

The previous fund usage verification report shows that the first two projects failed to achieve promised returns. As of September 30, 2025, the Pneumatic Tools Project had generated 5.04 million yuan in revenue, compared to a promised benefit of 47.58 million yuan; the Manufacturing Base Project had generated 5.32 million yuan, versus a promised benefit of 70.01 million yuan. The scheduled operational start times for these projects were December 2023 and October 2023, respectively.

Specifically, in 2024, the actual benefits of the Pneumatic Tools and Manufacturing Base projects were 5.03 million and 10.99 million yuan. In the first three quarters of 2025, the actual benefits of these projects dropped sharply, with the Pneumatic Tools Project only generating 15,000 yuan, and the Manufacturing Base Project 1.34 million yuan.

(Source: Screenshot from Tengya Precision announcement)

The committed investment amount for the R&D project was also significantly reduced. Originally, Tengya Precision planned to invest 54.98 million yuan in R&D, but due to the IPO net funds being less than the total required for all projects, the actual available funds for this project were only 21.08 million yuan. Later, the company adjusted the planned investment for the R&D project to 9.95 million yuan, but the actual investment was only 6 million yuan.

Why did the actual benefits of Tengya Precision’s IPO-funded projects decline so sharply in 2025? The company’s securities department told the reporter: “The main reason for the discrepancy is that these projects officially started production in January 2024 and October 2023 respectively, but due to industry downturn, weakened demand in the pneumatic tools sector, and trade policies, overall capacity utilization was below expectations, leading to higher product costs and the projects not yet reaching expected benefits. The company will intensify marketing efforts, expand product application scenarios, and explore cost reduction and efficiency improvements to realize the projected benefits as soon as possible.”

Given the poor performance of the IPO-funded projects, how does the company ensure that new projects funded by the offering will meet expectations? The securities department stated that to ensure the smooth implementation of the new projects, the company has built sufficient reserves in personnel, technology, and market areas. Specifics include:

1. Personnel Reserves

The company emphasizes building a professional talent team with deep expertise in power tools. The core team members have many years of experience in the power tools industry, with rich R&D, manufacturing, management experience, and industry resources, providing strong talent support for the steady progress of the funded projects.

2. Technology Reserves

The company has mastered core technologies such as mold design and development, robotic automatic stamping, automated aluminum profile assembly and riveting, and corrosion-resistant surface treatment of metal products. It covers processes like die casting, stamping, and injection molding, capable of meeting various power tool development needs.

3. Market Reserves

The company’s power tools and garden tools have established a certain market base. After more than 20 years of development, with scientific management, advanced processes, customized production, and high-performance products, the company has developed deep cooperation with many high-quality overseas clients. As production lines are built and debugged, and downstream clients are certified and expanded, the funded projects have promising market prospects.

Among them, the “Tengya Precision Vietnam Power Tools Manufacturing Project” is an overseas expansion of existing products, utilizing the company’s latest technological achievements to improve process levels and better meet customer needs; the “Tengya Precision Anhui Garden Tools Manufacturing Project” is a strategic extension of the company’s core capabilities, leveraging experience in R&D, manufacturing, quality control, and marketing in power tools to achieve rapid growth in the garden tools segment. The company will continue to serve existing clients well while actively developing new customers to provide stronger market support for the success of the funded projects.

Cover image source: Zhu Yu