Xinxing Tools "Approval and Termination" Behind the Scenes: From a Three-Person Workshop to IPO Front Door, How the Zhu Hulin Family Reached This Point | Yangtze River Delta Capital Bureau

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By | Sina Finance Shanghai Station, Shili

More than 30 years ago, in a small workshop of about 30 square meters in Haiyan County, Zhejiang, there were only three people and a few second-hand machine tools. At that time, Xinxing Tools was far from being considered an industry, let alone having any relevance to the capital market.

But today, this company is already standing at the doorstep of the ChiNext Listing Committee meeting.

On March 31, Xinxing Tools’ ChiNext IPO was submitted to the review meeting and passed. Yet on the very same day, the company was put into “suspension” status by the Shenzhen Stock Exchange—this “passing the meeting means suspension” timeline is not common in A-share IPO review, and it quickly drew market attention.

More noteworthy than a purely technical suspension is the stage position it is in—not its first attempt. Instead, this is its second attempt after withdrawing its application for a Main Board IPO. As early as June 30, 2023, Xinxing Tools, under the sponsorship of Huatai United Securities, submitted its listing application to the Shanghai Stock Exchange Main Board and had it accepted. After more than a year of review, having only completed the first round of inquiry responses, the company voluntarily withdrew the application on July 19, 2024, bringing the Main Board IPO process to a halt.

The interval wasn’t long. Only half a year later, on January 20, 2025, the company restarted its listing plan. It was still tutored by Huatai United Securities, but the path was switched to the ChiNext Board to advance the IPO.

From the rules, this suspension is a typical “technical pause.” Under the “6+3” financial data validity period mechanism, using financial data with an end date of June 30, 2025, the latest validity period lands exactly on March 31, 2026. Passing the review meeting on that day also means it becomes invalid on that day. As a result, the review process is halted, and the company must supplement and update the financial data before moving forward again.

But the overlap of timing adds an additional layer of complexity to this IPO.

Within the validity period for financial data, the company updated its prospectus multiple times, yet did not update the financial data in parallel; and the timing of the meeting was also exactly on the last day of the validity period. This kind of “deadline lock” arrangement makes the IPO procedurally compliant, but in terms of pacing it looks unusually tight.

More importantly, while regulators granted clearance, they also clearly raised questions. The Listing Committee meeting required the sponsor, Huatai United Securities, to explain whether the company’s performance has the ability to grow continuously and whether there is a risk of decline.

This is not a new issue. If you break Xinxing Tools down, this question almost runs through its entire IPO process. The underlying logic is, in fact, people.

In 1992, Zhu Hulin founded Xinxing Tools, initially with only three people. Yao Hongfei joined the team at this stage. This “outsider,” who had no mechanical processing experience at the time, later worked her way into the core of the company. Today, she is the company’s deputy general manager and secretary to the board, and she is also Zhu Hulin’s daughter-in-law.

In 2004, Zhu Hulin gradually stepped back and handed over management control to his son, Zhu Dongwei. The company entered the family succession phase. However, the handover did not change the control structure.

In the current system of actual controllers, Zhu Hulin is still included, together with his son Zhu Dongwei (current general manager), his daughter Zhu Hongmei, his son-in-law Yao Hongfei, and his daughter-in-law Yu Qijuan, forming a relationship of persons acting in concert. The company thus has a highly centralized family control structure. This structure is also clear within the management layer. Among the company’s core executives, other than the financial officer, everyone else is a family member. If this is the natural outcome of the company’s development, then at the capital level, the reflection of such a structure is even more direct.

Against this backdrop, the company still maintains its original fund-raising plan, intending to raise 560 million yuan. On one side is the continuous distribution of profits and staged cash-outs by shareholders; on the other side is maintaining financing expansion. This funding path itself constitutes an important background to this IPO.

Another, more critical line is growth. In terms of scale, Xinxing Tools is not weak. Revenue rose from 391 million yuan in 2022 to 467 million yuan in 2024, and in the first half of 2025 it already exceeded 244 million yuan.

From the cash flow perspective, the company’s net cash inflows from operating activities were 162 million yuan, 254 million yuan, 194 million yuan, and 98 million yuan respectively. Overall, it still remains a positive inflow and has some capacity for operational support. However, in terms of timing, after reaching a stage high point in 2022, cash flow declined somewhat. In the most recent period, the scale clearly decreased, creating a degree of mismatch with the ongoing expansion of the revenue scale.

Yet on one side is continuous profit distribution and staged cash-outs by shareholders; on the other side is maintaining financing expansion. This funding path itself forms an important background for this IPO. At the funding level, the relationship between dividends and financing is particularly worth attention.

In terms of dividend arrangements, the company has kept a relatively high力度. In 2024, the company implemented a cash dividend of 70 million yuan. From 2020 to 2024, across the two IPO reporting periods, the company cumulatively paid dividends of about 432.5 million yuan, while in the same period its non-recurring profit after tax (excluding non-recurring gains and losses) was about 797.7 million yuan. The dividend amount already covered more than half of the profits.

In the latest prospectus, the company has adjusted “continuous and rapid development” to “continuous and stable development.” From “fast” to “steady,” this corresponds to a rephrasing of growth expectations. At the level of the uses of proceeds, this tension is further amplified. The company plans to expand its existing main business through the proceeds from its projects. And with reference to its current revenue scale and market capacity, the question of whether the expanded capacity digestion capability and market space can match becomes a focal point repeatedly discussed by the market.

In addition, the intermediary team for this IPO has also been brought into the discussion. The project is sponsored by Huatai United Securities, and the sponsor representatives are Liu Dong and Chen Jiamin. Public information shows that they previously jointly participated in IPO projects such as Shanghai Tuopu and Zhiye Software, and none of those related projects completed the listing.

It needs to be explained that the track record of sponsor representatives in the past is not a basis for review conclusions. But under the current review environment, this kind of resume information is often considered by the market as well.

Taking everything together, Xinxing Tools shows a situation that is not common: the company has stable profitability, but growth is slowing; equity is highly concentrated, yet it has already realized a staged transfer through the transfer process; the dividend payout ratio is high, while it still maintains large-scale financing; at the same time that it enters the review being approved, it also enters a suspension status due to financial data issues and has been explicitly required to explain the sustainability of its performance. That

This gradually narrows the core issue of this IPO into a more direct judgment: given that profitability is acceptable but growth prospects are in dispute, how the necessity and rationality of this financing can be further verified.

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责任编辑：常福强