On September 29, PRM Technology Co., Ltd. officially submitted its application for listing on the main board of the Hong Kong Stock Exchange, with CICC and浦银国际 serving as joint sponsors.
According to the prospectus, the company aims to raise funds to increase production capacity, expand R&D capabilities, drive sales and marketing activities, engage in potential acquisitions and strategic investments, as well as for working capital and general corporate purposes.
Just three days prior to the application, shareholder Blue Lake Capital, holding a 9.01% stake in PRM, divested its holdings at a price significantly below the company’s last financing valuation.
CICC, through its subsidiary 启鹭投资, holds an 11.85% stake in PRM, making it the second-largest shareholder after founder Wang Lei and the largest external investor. As a joint sponsor for the IPO, concerns arise about CICC's ability to maintain diligence and independence in a "sponsorship + direct investment" model.
Additionally, discrepancies exist between PRM’s prospectuses submitted to the Shenzhen Stock Exchange and the Hong Kong Stock Exchange, particularly regarding financial disclosures. For instance, the difference in total liabilities for 2022 is a staggering 233 million yuan, with a notable variance of 23.07 percentage points in the debt-to-asset ratio.
Given the backing of major shareholders, what is the credibility of PRM’s financial information for this IPO?
Days Before the Filing, Major Shareholder Divests at Half Price
PRM Technology Co., Ltd. is a comprehensive solution provider focused on flexible manufacturing technologies and applications in the industrial and consumer sectors, integrating measurement, control, and AI technologies.
According to Zhitong Finance's data, PRM is the second-largest provider of PCBA testing equipment and services in China by revenue in 2024, and among the top ten providers of intelligent measurement and control solutions under the ODM model.
Since its founding in 2011, PRM has completed five rounds of financing, raising over 300 million yuan. As of the D round financing in December 2022, its post-investment valuation was 1.6 billion yuan.
In June 2023, PRM appointed Huatai United Securities as its sponsor and submitted its prospectus to the Shenzhen Stock Exchange’s Growth Enterprise Market, expecting to raise 700 million yuan. However, ten months later, the company voluntarily withdrew its application. During this period, the Shenzhen Stock Exchange issued an inquiry letter, the contents of which were not disclosed.
On September 29, 2025, PRM shifted its focus to the Hong Kong Stock Exchange and submitted an application to list, with sponsorship changing to CICC and浦银国际. Just three days before the filing, Blue Lake Capital (蓝三木月、蓝易臻实) sold its 9.01% stake to普华资本 (普华兴才、普华凤起及普华精实) for approximately 77.4 million yuan. However, based on the company’s D round financing valuation, the value of the 9.01% stake should have been 144 million yuan.
This transaction raises several questions: Why did Blue Lake Capital choose to divest just before the filing? Why was the transaction price significantly lower than the last valuation? Has PRM's valuation plummeted due to not securing any new financing over the past three years?
The prospectus reveals that the entry cost for Blue Lake Capital was 70 million yuan, resulting in a mere 7.4 million yuan profit from this transaction. This means that Blue Lake Capital’s investment since first entering in 2018 yielded only a 10.57% return over seven years, seeming unprofitable.
It is important to highlight that CICC, holding an 11.85% stake in PRM, is not only the second-largest shareholder after Wang Lei but also the largest external investor. Furthermore, it serves as a joint sponsor for the IPO. Can CICC effectively fulfill its gatekeeping role in the capital markets while holding these conflicting positions?
Since the inception of the Growth Enterprise Market, the "sponsorship + direct investment" model has sparked ongoing controversy. Scholars have pointed out that this model facilitates underwriting firms to bundle their direct investment entities with the companies they are sponsoring for IPOs, effectively facilitating below-market share allocations in exchange for sponsorship. This "direct investment + sponsorship" model is essentially viewed as opaque profit transfers and insider trading.
The prospectus also indicates that the company’s founder and chairman, Wang Lei, directly and indirectly holds a total of 30.27% of PRM through the employee stock ownership plan, making him the single largest shareholder group. This implies that, at the point of submission, the company is classified as having no controlling shareholder.
However, PRM's Growth Enterprise Market prospectus (updated December 2023) explicitly identifies Wang Lei as the controlling shareholder, claiming that "Wang Lei, as the chairman of the issuer, holds actual control over the issuer's production operations and major decisions."
During the two IPO processes, PRM did not secure any new financing, nor did significant changes occur in Wang Lei's shareholding or the company’s equity structure. Why, then, are the determinations regarding the controlling shareholder inconsistent across the two IPO applications? Is the control clear and intact?
Sudden Dramatic Shift in Performance in First Half of 2025: Major Discrepancies in Financial Data Between Two IPO Applications
In terms of operational performance, from 2022 to 2024, PRM's total revenue increased from 568 million yuan to 863 million yuan, representing a compound annual growth rate of 23.3%. Adjusted EBITDA figures were 125 million yuan, 71.98 million yuan, and 104 million yuan, showing notable fluctuations.
However, in the first half of 2025, PRM's operating performance sharply declined, with total revenue falling by 29.93% year-on-year to 203 million yuan. The adjusted EBITDA dropped to -116 million yuan, marking a dramatic turnaround with a decline of 441.11%.
Online testing equipment represents PRM’s largest revenue source, providing comprehensive quality control solutions spanning from components through semi-finished and finished products for the consumer electronics, home appliances, and automotive industries. Revenue from this segment during the reporting period amounted to 448 million yuan, 298 million yuan, 380 million yuan, and 110 million yuan, exhibiting an overall downward trend, with a decline of 33.40% and 40.02% respectively for 2023 and the first half of 2025.
Also, in the first half of 2025, revenues from manufacturing technology equipment, smart laboratory equipment and software, and standardized testing devices fell by 15.58%, 62.33%, and 11.41% respectively compared to the same period last year. The only product category to achieve growth was parts and others, which rose by 59.65% to 34.66 million yuan.
It is crucial to point out the significant discrepancies in financial information between PRM's two IPO applications, raising questions about the reasons and intentions behind these differences.
Regarding total revenue for 2022, the Growth Enterprise Market prospectus reported 566.745 million yuan, while the Hong Kong prospectus reported 567.742 million yuan, indicating a difference of approximately 1 million yuan.
Additionally, the primary revenue source was listed differently, with the Growth Enterprise Market prospectus classifying it as standalone testing equipment with revenue of 437 million yuan and a share of 77.46% for 2022, whereas the recent prospectus categorizes it as online testing equipment with 448 million yuan in revenue and a share of 78.9%.
Regarding major product categories, the Growth Enterprise Market prospectus categorizes them as "Testing Instruments, Standalone Testing Equipment, Automated Assembly and Testing Lines, Testing Equipment, and Equipment Data Digitalization Systems," while the recent prospectus categorizes them as "Online Testing Equipment, Manufacturing Technology Equipment, Smart Laboratory Equipment and Software, Standardized Testing Devices, and Parts and Others."
Why did PRM choose to change its product classification standards for this IPO, and why do discrepancies exist in its financial data across the two IPO applications?
Outside of primary business data, discrepancies in PRM's financial status are even more pronounced.
For 2022 total assets and liabilities, the Growth Enterprise Market prospectus revealed asset values of 990 million yuan and liabilities of 519 million yuan, while the recent prospectus disclosed 997 million yuan in assets and 753 million yuan in liabilities, particularly highlighting an extraordinary difference of 233 million yuan in total liabilities.
In terms of the asset-liability ratio for 2022, the Growth Enterprise Market prospectus noted 52.45%, while the recent prospectus reported 75.52%, reflecting a discrepancy of about 23.07 percentage points. Instances like this are numerous.
In light of being backed by major shareholders, how credible is the financial data presented for PRM’s IPO, and is the information disclosure accurate and comprehensive?