Santai Yingge: How a Chengdu Cutting Tool Factory Squeezed Into Sandvik's Supply Chain

Sentai Yingge's full name is Sentai Yingge (Chengdu) CNC Tool Co., Ltd. Its predecessor, a limited liability company, was established in July 1997, and in July 2016 it was converted as a whole into a joint-stock company. The actual controllers are the couple Xia Yongkui and Liu Min. The company's main business is core accessories for CNC machine tools, including tool systems, precision fixtures, and tool bodies, as well as the research and development, production, and sales of CNC cutting tools. Its products are widely used in CNC machining processes in fields such as automotive parts, construction machinery, and aerospace.

In 2025, the three categories of core accessory products—tool systems, precision fixtures, and tool bodies—together contributed 69.57% of main business revenue, of which tool systems accounted for 31.98%, making it the company's largest single product line; the CNC cutting tools business accounted for 26.34%, serving as the second growth curve. Together, the two lines made up 95.91% of the company's revenue base.

The prospectus discloses that the company has led or participated in the formulation of 22 national and industry standards. For a niche-sector enterprise with revenue of less than RMB 400 million, this figure carries considerable weight. The core accessories segment for CNC machine tools is often regarded by outsiders as配角 parts, but the right to set standards means the company has a real voice in choosing technological routes, rather than merely passively following industry norms to do contract manufacturing.

As of the end of March 2026, the company and its subsidiaries had cumulatively obtained 53 authorized patents, including 25 invention patents (including 1 international patent) and 28 utility model and design patents, forming a relatively complete patent layout from core processing techniques to product appearance design. Among machine tool accessory enterprises of the same scale, this represents a relatively solid technological reserve.

The adjustment of the sales model is the transformation story the prospectus most wants the market to see. Sentai Yingge's non-terminal sales (dealer channel) share fell year by year from 81.06% in 2023 to 65.10% in 2025, while the terminal direct sales share rose correspondingly from 18.94% to 34.90%. A channel structure shifting from reliance on dealer distribution to directly reaching end customers usually means the company has a more direct grasp of real downstream demand and can more easily feed product performance feedback directly back into R&D.

In 2025, the company's top five customers included Shuanghuan Transmission, accounting for 4.93% of revenue; Xiling Power, 3.95%; Changyuan Donggu, 3.53%;

Yujiang Die Casting, 3.42%; and Sandvik, 3.18%. The top five customers together accounted for only 19.01%, indicating a fairly dispersed customer structure, with no risk of being held hostage on pricing power by a single major customer.

The presence of a global cutting tool giant like Sandvik on the customer list shows that Sentai Yingge's products have reached a technical level in some niche processes sufficient to be purchased by international manufacturers. That a private machine tool accessory enterprise from Chengdu can enter the supply chain of an international cutting tool leader is one of the most prominent proofs of competitiveness the prospectus seeks to highlight.

The financial data also support this growth narrative, but the curve is not a straight line. Sentai Yingge's operating revenue grew from RMB 297 million in 2023 to RMB 330 million in 2024, and then to RMB 389 million in 2025, a compound annual growth rate of about 14.4%, overall trending upward. The trajectory of net profit attributable to the parent company has been more uneven: RMB 47,722,700 in 2023, falling to RMB 32,493,900 in 2024, then rebounding to RMB 59,174,000 in 2025, forming a clear V shape.

The prospectus attributes the 2024 low point to a decline in gross margin. The company's gross margin from 2023 to 2025 was 43.10%, 37.49%, and 38.40%, respectively. In 2024 it fell by nearly 6 percentage points, and in 2025 it recovered by less than 1 percentage point, still not returning to the 2023 level. Revenue for the first quarter of 2026 was RMB 77,172,000 on an unaudited basis, down more than 8% year on year, which the company attributes to quarterly fluctuations in downstream industry order pace.

The R&D expense ratio over the same period fell from 8.68% to 8.05% and then to 6.87%. The prospectus explains this as revenue growing faster than R&D investment, but it does not disclose whether the absolute amount of R&D investment was also declining, or merely growing more slowly.

In this IPO, Sentai Yingge plans to raise a total of RMB 280 million, of which RMB 230 million is to be invested in a high-performance CNC cutting tools and fixtures industrialization upgrade project to expand the production capacity of existing tool systems and precision fixtures, and another RMB 50 million is to be invested in a research and development center upgrade and construction project for new laboratory and testing facilities and the introduction of high-end processing equipment. The focus of the fundraising structure points to capacity upgrading and consolidation of technological capability, broadly consistent with the company's development path in recent years of standard-setting rights plus direct-sales channel transformation.

Regarding governance structure, the company's controlling shareholder and actual controller Xia Yongkui directly holds 17.27%, and indirectly controls through serving as the general partner of three shareholding platforms—Yingge Consulting, Sentai Consulting, and Yingge No. 1—with a total of 37.74% voting rights. Together with the 6.56% directly held by his wife Liu Min, the couple together controls 44.30% of voting rights.

The main text of the prospectus discloses that Xia Yongkui and Liu Min incurred borrowings due to the repurchase of equity held by original shareholders Guotou Venture Capital Fund and Ningbo Qingkong between 2024 and 2025, with total outstanding principal of RMB 38.5 million, from Zhejiang Mintai Commercial Bank Chengdu Shuangliu Sub-branch and Bank of Chengdu, with maturities concentrated between March and April 2027. Company director, deputy general manager, and shareholder holding more than 5% Xia Wanben was sued over a personal private lending dispute, and more than 2.79 million shares he holds have been judicially frozen. After the first-instance judgment, an appeal was filed in June 2026 and has not yet taken effect.

Sentai Yingge's reply to the first round of inquiries was disclosed on the Beijing Stock Exchange official website on September 22, 2026. The inquiry reply documents disclose that the total amount of loan contracts of the actual controller and the enterprises he controls was RMB 105.7 million, including RMB 55.7 million in private lending and RMB 50 million in financial institution borrowings, nearly three times the figure disclosed in the main text of the prospectus, and the regulator determined after verification that this does not constitute a major violation of laws or regulations.

This numerical discrepancy means that investors who read only the main text of the prospectus may be seeing only one third of the full leverage picture. Whether the company can continue to recover after the halving decline in net profit in 2024, and whether the revenue decline in the first quarter of 2026 is a short-term fluctuation or a turning point in the trend—the prospectus itself has not yet provided the answers to these questions.