China is transforming from a "manufacturing powerhouse" to a "manufacturing leader." Against this backdrop, an increasing number of companies focused on industrial manufacturing are becoming active in capital markets. According to Hong Kong Stock Exchange disclosures on September 29, PRM Technology Co., Ltd. (hereinafter referred to as "PRM Technology") submitted its listing application to the HKEX main board, with CICC and PUYIN International serving as joint sponsors.

The company is a comprehensive flexible manufacturing solutions provider that integrates measurement, control, and AI technologies, focusing on creating flexible manufacturing technologies and applications for industrial and consumer sectors. According to CIC data, by 2024 revenue, PRM Technology ranks as China's second-largest provider of consumer electronics PCBA functional and performance testing equipment and services, and is among the top ten comprehensive smart testing and control equipment and service solution providers in China's ODM model.

As the nation vigorously promotes smart manufacturing and Industry 4.0, what development opportunities will PRM Technology's Hong Kong listing bring? What is the company's investment value?

**Revenue Volatility with Strong Profitability**

In the industrial sector, PRM Technology has focused on testing and control technologies for over a decade, possessing comprehensive R&D capabilities spanning from sensor data collection and algorithm analysis to equipment integration. The company also has large-scale non-standard customized equipment and service delivery capabilities in consumer electronics, automotive, and home appliances sectors, providing comprehensive testing, control, and process equipment as well as testing data value-added services covering design, test verification, and production line manufacturing for customer components and complete machines.

Examining the revenue structure, PRM Technology has formed a business portfolio with industrial-grade smart testing and control equipment as the main growth curve and consumer-grade smart flexible manufacturing equipment and services as the "second growth curve." This business layout reflects both the "depth" and "breadth" of PRM Technology's business strategy. In terms of depth, it is rooted in the high-barrier semiconductor back-end testing field; in terms of breadth, it has validated PRM Technology's expansion from technology platforms to related electronic manufacturing scenarios, opening up a second growth curve.

However, financial data suggests that PRM Technology's strategic layout has not been well reflected in the company's fundamentals. Specifically, PRM Technology's performance growth came to an abrupt halt in the first half of 2025. According to prospectus data, in H1 2025, the company achieved revenue of 203 million yuan, down 29.9% year-over-year; net profit also turned from profit to loss at -118 million yuan, compared to 19 million yuan in the same period of 2024.

Prior to this, the company's overall performance showed volatile growth - from 2022 to 2024, PRM Technology achieved revenues of 568 million yuan, 698 million yuan, and 863 million yuan respectively, growing year by year; net profits were 71 million yuan, 18 million yuan, and 60 million yuan respectively.

According to the prospectus, the revenue decline in H1 2025 may be related to decreased income from the company's in-line testing equipment. This segment achieved revenue of 110 million yuan during the period, significantly down from 184 million yuan in the same period of 2024, with its revenue proportion dropping from 63.4% in the same period of 2024 to 54.2%.

The shift from profit to loss, beyond the impact of revenue decline, may be related to the company's surging R&D expenses and product structure adjustment challenges. In the first half, the company's R&D expenses accounted for 41.4% of revenue, far higher than 16.8% for the full year 2024. The company launched innovative solutions such as PRIME AI Agent and Smart Lab intelligent laboratory at CES 2025, with R&D investment mainly used for integrating AI with testing and control technologies. While beneficial for long-term competitiveness enhancement, this significantly eroded profits in the short term.

Meanwhile, the company is transitioning from traditional testing equipment to industrial AI + flexible manufacturing, with mismatched revenue and costs during the transition period between old and new businesses. High-margin in-line testing equipment revenue fluctuated, while new solutions are still in market cultivation phase and have not yet formed stable profit contributions.

Fortunately, PRM Technology maintains high gross margins and has quality customer resources, which are bright spots in the company's fundamentals. According to the prospectus, from 2022 to 2024, PRM Technology recorded gross margins of 54.6%, 42.0%, and 43.2% respectively, maintaining overall high levels, reflecting its technological barriers and product competitiveness.

Additionally, the company's downstream customers include semiconductor packaging and testing manufacturers, chip original manufacturers, and electronic manufacturers such as United Technologies and ON Semiconductor Group, clearly demonstrating that its products have gained recognition from industry leading customers.

Overall, while PRM Technology's performance showed some decline in H1 2025, the company's fundamentals are not without merit in terms of profitability and customer resources.

**Industry in High-Growth Period with Intensifying Market Competition**

PRM Technology's core track is "machine vision" and "smart testing and control" in industrial automation, specifically applied to testing segments in high-end precision manufacturing such as lithium battery manufacturing and 3C electronics (consumer electronics).

From a market development potential perspective, the company's track perfectly aligns with national strategies and core industry development trends, with clear and continuously growing market demand and enormous development potential.

Looking at both sides, under the Industry 4.0 wave, with continuous advancement in IoT, big data, AI, and robotics technologies, the intrinsic necessity of improving manufacturing efficiency becomes increasingly important. Smart TMC equipment and services are rapidly advancing toward a trillion-yuan market with fast growth rates.

Smart TMC equipment and services refer to equipment and services that utilize advanced testing, measurement, and control technologies to conduct high-precision detection and dynamic control of physical quantities, parameters, and indicators during key stages of smart manufacturing, such as smart R&D and smart production.

From 2020 to 2024, the global smart TMC equipment and services market size grew from $52.3 billion to $136.2 billion, with a compound annual growth rate of 27.0%. The market is expected to grow at a compound annual growth rate of 17.7%, reaching $307.7 billion by 2029.

In the smart consumer flexible manufacturing equipment and services industry, with technological upgrades and innovative production models, more and more consumers directly participate in product customization. Emotional value, personal expression, and niche culture increasingly drive consumption, leading to rapid development of the global smart consumer flexible manufacturing equipment and services industry.

Smart consumer flexible manufacturing equipment and services refer to industrial models primarily driven by meeting increasingly diverse and personalized consumer demands. From 2020 to 2024, the global smart consumer flexible manufacturing equipment and services market size expanded from $21.3 billion to $37.9 billion, with a compound annual growth rate of 15.5%. The market is expected to grow at a compound annual growth rate of 20.2%, reaching $95 billion by 2029.

Based on the above, both major tracks where PRM Technology operates show high double-digit growth rates, which means the growth potential of these two industries is quite promising, representing significant development opportunities for PRM Technology.

However, it should be noted that high-profit and high-growth markets easily attract numerous competitors. PRM Technology not only faces competition from international giants like Hexagon and Keyence, but also from numerous domestic listed companies (such as Tztek Technology and Matrix Technology) and startups. Intensifying market competition may lead to price wars, squeezing profit margins, making market competition increasingly fierce.

Additionally, downstream manufacturing technologies are rapidly evolving (such as battery technology from winding to stacking, emergence of CTC technology), posing higher and newer requirements for testing technologies. PRM Technology inevitably faces significant technological iteration and R&D pressure. The company must continuously invest substantial resources in R&D to keep up with or even lead technological development, otherwise it risks being eliminated.

In summary, PRM Technology operates in a promising, rapidly developing quality track. Its core advantages lie in deep technological barriers and precise focus on golden tracks, which have enabled rapid growth in recent years. However, the company's future development also faces challenges such as industry cyclical fluctuations and intensifying market competition.

The key to its long-term development lies in whether it can maintain continuous technological innovation and technological leadership, and whether it can withstand competitive pressure while maintaining or even improving its profitability.

Therefore, overall, PRM Technology can be considered a typical "hidden champion" enterprise with core competitiveness in niche sectors. Its future development is highly correlated with the prosperity of the lithium battery industry, presenting both opportunities and risks.