Tengya Precision Engineering announces a private placement to raise funds, investing in power tool manufacturing and other projects

Securities Times Reporter Zang Xiaosong

Tengya Precision Engineering (301125) announced on the evening of March 22 that the company plans to raise no more than 120 million yuan (including issuance costs) through a simplified issuance of shares to specific investors. After deducting issuance costs, the funds will be used for Tengya Precision Engineering’s Vietnam power tool manufacturing project, Tengya Precision Engineering’s Anhui garden tool manufacturing project, and to supplement working capital.

The Vietnam power tool manufacturing project has a total investment of 54.34 million yuan, with 50 million yuan of raised funds allocated. The key background for the project is that, amid various intertwined factors, relevant export companies in China still face significant risks. Currently, the core markets for electric tools, pneumatic tools, and garden robots remain in Europe and America. However, the US imposes a 40% tariff on Chinese electric tools, pneumatic tools, and garden robots, while Vietnam’s tariffs on similar products exported to the US are only 20%. Localized production in Vietnam for export can significantly reduce export costs.

According to the announcement, the project plans to lease a factory in Vietnam, purchase advanced production equipment, and expand production of power tools and other products. By localizing production in Vietnam and exporting, the project aims to break trade barriers and reduce the company’s overall foreign trade operational risks. Calculations show that the project’s after-tax internal rate of return is 18.40%, with an after-tax payback period of 6.13 years (including a 1-year construction period). Once operational, the normal annual revenue is expected to be 193 million yuan (pre-tax), indicating good economic benefits.

Additionally, Tengya Precision Engineering’s Anhui garden tool manufacturing project has a total investment of 50.96 million yuan, with 50 million yuan of raised funds. Currently, the garden tool industry is experiencing structural upgrades. The industry has shifted from a traditional, fuel-powered, extensive development stage to a new phase of high-quality development characterized by lithium electrification, intelligence, and customization. High-performance lithium tools, intelligent operation equipment, and scene-specific products have become mainstream market demands. Industry chain collaboration and full-category layout have become key to corporate competitiveness.

Tengya Precision Engineering stated that the Anhui garden tool manufacturing project is precisely aligned with industry development trends. It is based on lithium electrification, centered on intelligence, and focused on customization, with the goal of full-category layout. The project aims to comprehensively upgrade its product matrix and industrial layout to seize core market segments amid industry transformation.

By 2025, Tengya Precision Engineering expects to achieve approximately 15.28 million yuan in sales revenue from garden tools, with a blower sales volume of 14,000 units. As of the announcement date of the private placement plan, the company has already achieved mass production of garden tools such as blow dryers, mini saws, lawnmowers, one-handed saws, pruning shears, and chainsaws. In 2026, the company will further integrate resources, increase channel development efforts, and quickly realize large-scale sales of all garden tool categories, ensuring the smooth implementation of the Anhui garden tool manufacturing project. Calculations show that the project’s after-tax internal rate of return is 15.28%, with an after-tax payback period of 7.31 years (including a 1-year construction period). Once operational, annual revenue is expected to reach about 221 million yuan (pre-tax), with good economic benefits.

Additionally, the company plans to use 20 million yuan of the raised funds to supplement working capital.

(Edited by: Guo Jiandong)

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