We are a leading pressure equipment manufacturer and provider of integrated pressure equipment solutions in the PRC offering traditional pressure equipment, modular pressure equipment and value-added services associated with the pressure equipment, with a strong market position in the PRC. According to F&S Report, the pressure equipment industry in the PRC was relatively fragmented, with the top five manufacturers and solution service providers of integrated pressure equipment solutions accounting for approximately 10.0% of total sales revenue of pressure equipment in the PRC in 2019. We mainly compete with state-owned and non-state owned pressure equipment manufacturers and providers of integrated pressure equipment solutions in the PRC, and we were the fourth largest pressure equipment manufacturer and provider of integrated pressure equipment solutions in the PRC with a market share of approximately 1.5% and the largest non-state owned pressure equipment manufacturer and provider of integrated pressure equipment solutions in the PRC, both in terms of sales revenue in 2019. For each of the traditional pressure equipment segment and modular pressure equipment segment, we were the fifth and eighth largest manufacturer in the PRC with market share of approximately 1.2% and 1.9%, respectively, in terms of sales revenue in 2019.
We offer comprehensive pressure equipment tailored to address specific requirements of our customers. We generally provide a combination of design, procurement, manufacturing, installation, testing and commissioning, and after-sales technical support services. Our pressure equipment is customised based on customers’ requirements on a project basis.
To complement our pressure equipment offering, we also offer value-added services associated with the pressure equipment to our customers, including validation, maintenance, design, and digital operation services.
We generally undertake pressure equipment projects in downstream industries, such as chemical, pharmaceutical, personal care chemical, mining and metallurgical, oil and gas and electronic chemical industries. The requirements of traditional pressure equipment and modular pressure equipment vary across industries, as well as countries. We have obtained more than 20 industrial licences/certificates granted by relevant authorities in both the PRC and overseas as to our conformity with industry standards. Out of such industrial licences/certificates, three licences/certificates will expire in 2021 and we will apply for renewal of such licences/certificates as and when appropriate. With our strong design and manufacturing capabilities, we are able to offer traditional pressure equipment and modular pressure equipment in a number of overseas markets in addition to the PRC, such as North America, Europe, Asia (excluding mainland China), South America, Africa and Oceania.
We have two production bases in Shanghai and Nantong, which are located in the Yangtze River Delta region, one of the most established industrial regions in the PRC. Our Shanghai production base has a GFA of approximately 57,150 sq.m., with 14 production workshops. Our Nantong production base has a GFA of approximately 121,618 sq.m., with nine production workshops. Our estimated annualised production utilisation rate for the years ended 31 December 2017, 2018, 2019 and 2020 is approximately 99.9%, 95.0%, 97.1% and 86.8%, respectively. For details, please refer to the section headed “Business — Production Facilities and Production Process — Production capacity and utilisation rate” in this document. Moreover, we outsource certain processing works to sub-contractors to ensure the progress and quality of the projects. Specifically, we usually outsource the process of pressure equipment head forming (封頭壓制) and machining (機加工) to sub-contractors who have the requisite expertise and experience. For the years ended 31 December 2017, 2018, 2019 and 2020, the outsourcing fees incurred by us amounted to approximately RMB108.6 million, RMB141.0 million, RMB137.1 million and RMB141.0 million, representing approximately 8.4%, 7.2%, 6.2% and 6.6% of our cost of sales of Continuing Operations, respectively.
We place great emphasis on our research and development capabilities as we believe that it will enable us to maintain our market position and allow us to compete effectively with leading players in the industry. Our research and development centres are located in our production bases in Shanghai and Nantong. As at the Latest Practicable Date, our research and development team comprised 328 personnel, majority of whom have received tertiary or higher education with diplomas and have an average 10 years of experience in related industries. During the Track Record Period, apart from relying on our own capabilities, we have collaborated with universities in Japan and the PRC, such as Nagoya University, Shanghai Jiao Tong University and East China University of Science and Technology, with a view to further enhancing our research and development capability. For the years ended 31 December 2017, 2018, 2019 and 2020, our research and development expenses from Continuing Operations amounted to approximately RMB87.2 million, RMB120.7 million, RMB126.1 million and RMB125.8 million, accounting for approximately 31.8%, 35.3%, 28.8% and 26.6% of our total operating expenses (which included our selling and marketing expenses, general and administrative expenses, and research and development expenses), respectively.
For the years ended 31 December 2017, 2018, 2019 and 2020, our revenue from Continuing Operations was approximately RMB1,570.1 million, RMB2,467.9 million, RMB2,826.3 million and RMB2,978.6 million, respectively.
Source: Morimatsu Intl (02155) Prospectus (IPO Date : 2021/06/15) |