Comprehensive Assessment of Yaokun Hydraulics' IPO Prospects

Jiangsu Yaokun Hydraulic Co., Ltd. is an enterprise focusing on the R&D, production and sales of hydraulic components and parts, whose products are mainly used in the construction machinery field. The company first disclosed its prospectus in July 2022, was officially accepted by the Shenzhen Stock Exchange in March 2023, passed the listing committee meeting on January 26, 2024, and submitted a registration application on December 8, 2025 [1][2].

According to the registration draft of the prospectus, from 2022 to 2024, the company’s performance showed a clear trend of three consecutive declines [1][3]:

The company’s sales to its largest customer Caterpillar continued to rise to 38.63% but the actual transaction amount continued to decrease [1][3]:

• 2022: 269 million yuan
• 2023: 260 million yuan
• 2024: 247 million yuan
• First half of 2025: 128 million yuan

This contradictory phenomenon of ‘rising proportion but falling amount’ reflects the weakening of the company’s overall customer base.

From passing the meeting in January 2024 to submitting the registration in December 2025, the company has been stuck for nearly two years, which is rare under the registration system background [2]. This indicates that the regulatory authorities have continued to pay attention to the stability of its operating performance.

During the on-site inquiry of the listing committee meeting, the regulatory authorities focused on [1]:

• Sustainability of cooperation with the largest customer Caterpillar
• Safeguard measures for the stability of operating performance
• Rationality of the continuous decline in R&D expenses
• Necessity of supplementing working capital after large dividends

At the end of each reporting period, the book value of the company’s accounts receivable remained at a high level of 160 million to 200 million yuan, and notes receivable also showed an upward trend. The total of the two increased from 215 million yuan in 2022 to 244 million yuan in the first half of 2025 [1], reflecting the company’s increasing pressure on payment collection.

The company ranks among the top in the domestic hydraulic components market share and is an ‘invisible champion’ in this segment [1]. Under the trend of domestic substitution of hydraulic components for construction machinery, it has certain first-mover advantages.

With the increasing demand for independent control in the construction machinery industry, there is great room for improvement in the localization rate of hydraulic components as core parts, which provides long-term development opportunities for the company [1].

The company plans to raise 809 million yuan, mainly invested in hydraulic components and parts production and construction projects and R&D center construction, which will help enhance its core competitiveness [1].

From the perspective of IPO review, Yaokun Hydraulics faces multiple challenges such as continuous performance decline, high customer concentration, and declining R&D investment, which are the key review points under the registration system. The company remains in the registration phase two years after passing the meeting, reflecting the regulatory authorities’ cautious attitude towards its fundamentals.

1. When will the performance inflection point appear
   : If the performance can stabilize and recover in the second half of 2025 and 2026, it will greatly increase the probability of IPO success
2. Optimization of customer structure
   : Reduce dependence on Caterpillar, expand domestic customers and new application fields
3. Recovery of R&D investment
   : Improve technological innovation capabilities and enhance product competitiveness
4. Improvement of financial quality
   : Strengthen accounts receivable management and optimize cash flow status

• Continued decline in macroeconomic and construction machinery industry prosperity
• Significant increase in main raw material prices erodes profits
• Customer loss leads to further deterioration of performance
• May face further regulatory inquiries or even be advised to withdraw during the registration phase

As a segment leader in the hydraulic components field, Yaokun Hydraulics has certain technical and market foundations, but its IPO prospects mainly depend on whether its performance can stabilize in the next 1-2 reporting periods. In the current review environment, enterprises with three consecutive years of performance decline face more stringent reviews, and the company needs to use actual data to prove that its operations have passed the trough period to smoothly advance to registration effectiveness and even listing.

[1] Tencent News - “This ‘invisible champion’ submits IPO registration application, seizing opportunities for localization in the hydraulic field” (https://news.qq.com/rain/a/20251218A06YRF00)

[2] NetEase Finance - “Yaokun Hydraulics enters registration two years after passing the meeting: R&D expenses continue to decline, supplementary working capital after hundreds of millions in dividends” (https://www.163.com/dy/article/KHK2M60A0552HN90.html)

[3] Sina Finance - “Volvo supplier enters Shenzhen Stock Exchange: Yaokun Hydraulics’ performance declines for three consecutive years, Xie Yaokun and his son receive dividends for three years” (https://finance.sina.com.cn/wm/2025-12-26/doc-inhecwfc2497856.shtml)