The aerospace industry is known as the crown of industrial civilization, with the commercial aerospace industry chain covering the upstream of rocket launch, satellite and ground equipment development, the midstream of satellite operation, and the downstream application sectors including communication, navigation, remote sensing, satellite internet, space travel, space mining, and other application scenarios.

Recently, there have been companies in the aerospace sector aiming for IPO listings.

According to Gelonghui, the Listing Committee of the Beijing Stock Exchange is scheduled to hold the 22nd review meeting of 2024 on November 8, 2024, to review the initial public offering of Geovis Technology Co., Ltd. (referred to as Geovis), with CSC as the sponsor.

Geovis was established in 2016, listed and publicly transferred on the NEEQ in February 2023, and moved to the Innovation Layer in June 2023. The company specializes in the management and services of spacecraft in orbit, engages in national specialized, special and new 'little giant' enterprises for aerospace telemetry management, and aerospace digital simulation, with its registered office in Hefei, Anhui.

As of the date of the prospectus signing, Geovis holds 46.36% of the voting shares of the company, making it the controlling shareholder. The ultimate controlling shareholder of Geovis is the China Academy of Aerospace, making the China Academy of Aerospace the actual controller of Geovis.

In this listing application, Geovis plans to raise funds for the construction of the Commercial Aerospace Telemetry Service Center and Station Network (Phase I) project, the development of the AI-based next-generation Observer software platform project, R&D center construction project, and additional working capital.

Use of raised funds, image source: Prospectus

1

The company has a relatively small scale, with a gross margin exceeding 50%.

Geovis Technology Co.,Ltd specializes in aerospace measurement and control management, aerospace digital simulation, relying on high-precision orbit, attitude, and control calculations of aerospace vehicles, intelligent planning and scheduling of measurement and control resources, satellite entire life cycle health management, integrated design and intelligent control of measurement and control equipment and other core technologies. The company has independently developed the Insigther series products with complete intellectual property rights and domestically controllable.

Specifically, Geovis Technology Co.,Ltd's main products and service forms include technology development and services, software sales, construction of measurement and control ground systems, and system integration. From 2021 to the first half of 2024, the revenue share of technology development and service business exceeded 70%, which is an important source of revenue for the company.

Relying on independently developed Insigther series products and accumulated core algorithms in various aerospace fields, the company's aerospace experts and engineers, combined with the differentiated needs of user aerospace missions, provide customized system development and services in aerospace measurement and control management and aerospace digital simulation fields for special areas, civil aerospace, commercial aerospace, and other users.

The composition of the company's main business revenue, image source: prospectus.

Software sales involve the company providing users with independently developed and domestically controllable Insigther software products to meet the general business needs of users in the aerospace field.

At the same time, the company also provides users with aerospace infrastructure system design, ground station indicator verification and construction, measurement and control coverage analysis and link calculation, special equipment selection and adaptation, software and hardware deployment, system installation and commissioning, and ultimately delivers an integrated full-featured ground station system to customers. However, the revenue proportion of software sales and measurement and control ground system construction business is relatively low.

The company's main business system, Image Source: Prospectus

The company is currently in a rapid growth stage, relatively small in scale, and compared to advanced international counterparts in the same industry, it is in a relatively weak position, with room for improvement in risk resistance.

In 2021, 2022, 2023, and the first six months of 2024 (referred to as the "reporting period"), geovis technology co.,ltd's revenue from operations is approximately 0.104 billion yuan, 0.141 billion yuan, 0.229 billion yuan, 0.081 billion yuan respectively, with net income of approximately 0.035 billion yuan, 0.051 billion yuan, 0.063 billion yuan, 0.026 billion yuan respectively.

Main financial data and financial indicators, image source: prospectus.

During the reporting period, the comprehensive sales gross margin of Geovis Technology Co.,Ltd. was 55.20%, 56.92%, 52.16%, and 53.18% respectively, with some fluctuation, similar to the level of comparable companies.

Comparative analysis of gross margin rates of comparable companies, image source: prospectus

Due to the fact that Geovis Technology Co.,Ltd.'s end users are mainly concentrated in special fields, civil aerospace, commercial aerospace and other areas, there is a strong correlation between end demand and the scale of budget expenditures in special fields, as well as national research and development investments. Although the end user demand has been steadily growing in recent years and is expected to continue to rise, if a major adjustment occurs, the company's market demand may be affected. At the same time, with the rapid development of the industry, the company also faces the increasing risk of intensified market competition.

2

Accounts receivable have been increasing year by year, with a large amount.

The aerospace control management and aerospace digital simulation industry where Geovis Technology Co.,Ltd. is located involves the upstream, midstream and downstream of the aerospace industry, covering the entire lifecycle of aerospace missions.

The aerospace industry includes three major areas: space technology, space applications, and space science, covering the manufacturing of cross-atmosphere aircraft propelled by rocket engines and spacecraft flying in space along with their carried equipment, ground equipment, launch services, and application industries.

Aerospace industry chain, image source: prospectus

Customers of geovis technology co.,ltd. include Shanghai Aerospace System Engineering Research Institute, Chinese Academy of Aerospace, geovis technology co.,ltd., Geovis Space, Qilu Aerospace Information Research Institute, Beijing Meteorological Technology Co., Ltd., etc. During the reporting period, the proportion of sales revenue to the operating income of the top five customers in the consolidated caliber were 62.64%, 51.40%, 37.67%, 46.50% respectively, which is relatively high, posing a risk of high customer concentration.

During the reporting period, the proportion of related party sales to the current operating income were 36.64%, 18.45%, 11.47%, 8.15% respectively. Although it has decreased somewhat, there is still a risk of related party transactions if the company fails to strictly adhere to related transaction decision-making and approval procedures in the future.

At the end of each reporting period, the accounts receivable balance of geovis technology co.,ltd. was approximately 0.059 billion yuan, 0.114 billion yuan, 0.163 billion yuan, 0.21 billion yuan respectively, showing an increasing trend year by year. The proportion to the current operating income is 56.74%, 80.39%, 71.38%, 258.18% respectively. The accounts receivable turnover rates were 2.38, 1.38, 1.39, 0.39 respectively, indicating a risk of a large accounts receivable balance and decreasing turnover rates.

It is worth noting that during the reporting period, the net cash flow from operating activities of geovis technology co.,ltd. were 40.5223 million yuan, -6.0519 million yuan, 14.845 million yuan, -33.6412 million yuan respectively, which may result in situations where it is negative or lower than the net income of the same period.