The high concentration of suppliers and customers is concerned
【(Reporter Chen Yanqing) Shenzhen company Starlight Printing recently submitted an IPO prospectus to the United States Securities and Exchange Commission, intending to apply for listing on Nasdaq, stock code SFHG. According to the prospectus, the company plans to raise $10 million to $12.5 million by selling 2.5 million shares at a price of $4 to $5. Recently, the China Securities Regulatory Commission issued a document requiring the company to supplement the reasons and rationality of the high concentration of suppliers and customers.
According to the information, Starlite Printing is a mature one-stop printing service provider, mainly providing printing services in Hong Kong and the Mainland, with more than 20 years of experience in the printing industry. Customers are mainly book dealers located in Hong Kong and all over the world.
In terms of financial data, from 2021 to 2022, the company's revenue was HK $162 million and HK $129 million, respectively, and the corresponding net profit was HK $2,8088 million and HK $3,651,500. It can be seen that the company's revenue has declined in the past two years, but its net profit has increased.
According to the prospectus, a large portion of Starlite Printing's revenue comes from a few major customers. As of the end of the first half of this year, three customers accounted for 31.5%, 24.9% and 24.1% of total revenue, respectively. At the end of last year, three customers accounted for 27.2%, 24.5% and 22.7% of total revenue respectively.
If any of these customers experience a decline or delay in sales due to market, economic or competitive conditions, the Company may be forced to reduce prices, or it may reduce the number of purchases of the Company's products, which may adversely affect the Company's profit margins and financial condition, and may negatively affect the Company's revenue and results of operations.
The prospectus also shows that by the end of last year, the three suppliers accounted for 17.6%, 17.5% and 16.3% of the company's total purchases, respectively. Starlight Printing admits that the company generally does not enter into any long-term agreements with suppliers, so there is no guarantee that the company's operating subsidiaries can maintain a stable and long-term business relationship with any supplier.
