A company in Pingshan, Shenzhen, has gone public, supplying parts to BYD, with over 80% of its revenue coming from new energy vehicles.

How does NISOKO respond to the challenge of declining gross margins?

After rapid innovations landing on the Hong Kong Stock Exchange and Dalanminghai submitting its prospectus, another company from Shenzhen has recently made a push into the capital market.

According to Gelonghui, Shenzhen NISOKO Connection Technology Co., Ltd. (referred to as “NISOKO”) responded to the first round of inquiries from the Securities Regulatory Commission on March 20. NISOKO submitted its prospectus on December 27, 2025, seeking to be listed on the ChiNext Board of the Shenzhen Stock Exchange, with CITIC Securities as the sponsor.

NISOKO has responded to questions raised by regulatory authorities regarding the industry development situation and growth potential, core technology and technological advancement, and changes in gross margins.

01

Focusing on the field of high-voltage high-current connection system contacts, registered in Shenzhen Pingshan

NISOKO was established in November 2012 and transformed into a joint-stock company in February 2025, registered in Kengzi Street, Pingshan District, Shenzhen.

Before this issuance, the actual controller of the company, Ni Quan, held a total of 78.55% of the voting rights in NISOKO through direct and indirect means.

Ni Quan was born in 1975 and has a bachelor’s degree. He has worked for China Light Motorcycle Group Qingdao Company, Fujin Precision Industry (Shenzhen) Co., Ltd., Shenzhen Tongmao Electronics Co., Ltd., AMPHENOL, Shenzhen Basiba Technology Development Co., Ltd., and others.

In the equity transfer in March 2025, NISOKO was valued at approximately 800 million yuan. Shenzhen Guozhong Changrong Asset Management is the company’s external institutional investor, holding a total of 12% of the company’s shares through various entities before this issuance.

NISOKO is a solution provider for high-voltage high-current connection system contacts (also known as “connector terminals”), building a product matrix system covering three core application areas: new energy vehicles, energy storage, communication, and AI data centers. Its applications in the new energy vehicle sector comprehensively cover vehicle manufacturing, primarily including charging ports and the three electric systems.

High-voltage high-current connection systems play a crucial role in high-voltage electrical equipment, often vividly referred to as the “energy artery,” bearing the dual mission of efficient power transmission and stable system control.

As the core functional unit of high-voltage high-current connection systems, connection system contacts are responsible for ensuring the reliability of electrical connections. By forming a stable, low-impedance physical contact interface with paired connector corresponding contacts, the contacts can achieve efficient and reliable conduction of electrical current.

While achieving this core function, the contacts must effectively withstand mechanical plug-in lifespan, thermal effects caused by current load, and resist interference from complex environmental factors such as temperature and humidity fluctuations, chemical corrosion, and vibration.

Therefore, the comprehensive performance of contacts includes not only mechanical properties such as plug-in lifespan, plug-in force control, vibration resistance, and reliable crimp retention, but also electrical properties such as rated current-carrying capacity, temperature rise characteristics, signal transmission quality, and stability of contact resistance.

NISOKO’s current contact products include series products such as spring contacts, torsion springs, and contact clips. At the same time, the company has launched new-generation products such as wound contacts, floating contacts, push-pull quick-lock assemblies, and composite material contacts.

Examples of some major product series, source: prospectus

In recent years, NISOKO’s revenue from the new energy vehicle sector has accounted for over 85%.

Since 2015, the company has supplied high-voltage high-current connectors in bulk to leading domestic new energy vehicle manufacturer AVIC Optoelectronics, subsequently becoming a supplier to top companies in the connector industry such as Amphenol (AMPHENOL), Aptiv (APTIV), Luxshare Precision, Yonggui Electric, Ruikeda, Wolong New Energy, Tianhai Electric, Huazhan Aerospace, and Ningbo Gaosong. Additionally, the company is a tier-one supplier for BYD.

Main customer situation, source: prospectus

02

Gross margins have declined in the past two years, facing accounts receivable pressure

In recent years, benefiting from the rapid development of industries such as new energy vehicles, NISOKO’s revenue has grown.

In the reporting period of 2022, 2023, 2024, and the first half of 2025, the company’s operating revenue was 420 million yuan, 483 million yuan, 597 million yuan, and 344 million yuan, respectively, with net profit attributable to the parent company being 111 million yuan, 134 million yuan, 137 million yuan, and 63.288 million yuan, respectively.

Key financial data, source: prospectus

It is worth noting that NISOKO’s relatively low R&D expense ratio has also been questioned by regulatory authorities. During the reporting period, NISOKO’s R&D expense ratios were 3.27%, 3.34%, 4.61%, and 4.06%, while the average R&D expense ratios of comparable companies in the industry were 8.75%, 10.29%, 9.15%, and 7.14%.

By product category, the company’s main business revenue structure has remained stable. In the reporting period, sales revenue from spring contact products accounted for the highest proportion of the main business revenue, with all being above 50%.

The sales amount and proportion of contact clip products in the main business revenue have increased year by year, with the latest proportion being 17.91%.

The sales amount and proportion of torsion spring products have fluctuated significantly, primarily due to large fluctuations in procurement volume from major end customers of torsion spring products.

Composition of main business revenue, source: prospectus

During the reporting period, NISOKO’s gross margins for main business were 41.55%, 42.82%, 38.68%, and 30.02%, showing a downward trend over the past two years.

The proportion of direct materials in the main business cost is over 50%. The main raw materials required for production include copper materials and various processed metal components. If copper prices increase in the future and the company cannot effectively pass on the pressure of rising raw material prices to customers, it will squeeze the product profit margins and negatively impact the company’s operating performance.

Additionally, if the demand in the downstream new energy vehicle industry slows down, the speed of new product development and iteration slows, and competition intensifies, there is a risk of further decline in the company’s gross margins.

Comparison of gross margins with industry peers, source: prospectus

During the reporting period, the sales revenue from NISOKO’s top five customers accounted for 53.72%, 60.99%, 64.97%, and 62.09% of the operating revenue, indicating a high customer concentration.

Sales situation with the top five customers, source: prospectus

Moreover, NISOKO is also facing pressure from accounts receivable. The book value of accounts receivable was 187 million yuan, 245 million yuan, 287 million yuan, and 234 million yuan, accounting for 51.01%, 52.96%, 42.88%, and 34.62% of current assets, indicating a large scale of accounts receivable.

Cash flow statement, source: prospectus

03

The company holds about 7% market share in China’s new energy vehicle contacts, facing competition from overseas giants

The high-voltage high-current connection system contact business that NISOKO is engaged in belongs to the “C39 Computer, Communication, and Other Electronic Equipment Manufacturing” category, “C398 Electronic Components and Electronic Special Materials Manufacturing” subcategory, and “C3989 Other Electronic Components Manufacturing” subclass.

High-voltage high-current connection systems refer to core functional components used for high-voltage and high-current power transmission in scenarios such as new energy vehicles, energy storage, communication, AI data centers, electric power grids, and industrial equipment. They ensure safety, reliability, and efficiency in the power transmission process by integrating insulated material design, high-voltage interlocking structures, electromagnetic shielding technology, and intelligent data interfaces, while also meeting performance requirements such as lightweight and environmental resistance (e.g., high temperature, vibration, corrosion).

High-voltage high-current connectors are the “core joints” of high-voltage high-current connection systems, transmitting electrical power current or signal current between devices, components, equipment, and subsystems, and maintaining effective functional cooperation between systems to achieve overall functionality. They are essential basic components for forming complete system connections.

High-voltage high-current connectors typically consist of contacts, insulators, housings, and accessories, which work together to ensure efficient power transmission.

The core technology of high-voltage high-current connectors is reflected in aspects such as current-carrying capacity, temperature rise, plug-in lifespan, protection level (condensation, electromagnetic interference, etc.), vibration resistance, and impact resistance, with component types reaching dozens.

High-voltage high-current connectors and classifications, source: prospectus

High-voltage high-current connector contacts are key conductive components in high-voltage equipment for large current transmission, with upstream being the basic materials and equipment sector, and downstream being high-voltage high-current connectors and system integration, ultimately applied in end sectors such as new energy vehicles, energy storage, communication, and AI data centers.

This electronic component constitutes a systematically independent part in terminal devices and is an indispensable key component that affects the safety, performance, and efficiency of terminal devices such as new energy vehicles, energy storage, communication, and AI data centers.

High-voltage high-current connector contact industry chain, source: prospectus

According to Frost & Sullivan statistics, the market size for high-voltage high-current connector contacts in China is expected to reach 11.12 billion yuan in 2024, predicted to grow to 25.33 billion yuan by 2029, with a compound annual growth rate of 18.9% from 2025 to 2029, primarily driven by downstream market demand from new energy vehicles, energy storage, communication, and AI data centers.

Market size of high-voltage high-current connector contacts, source: prospectus

The global connector industry is dominated by leading manufacturers from countries such as the United States, Japan, and Germany. According to Bishop & Associates statistics, in 2022, TE Connectivity, Amphenol (AMPHENOL), and Molex (MOLEX) ranked among the top three global connector manufacturers, collectively holding over 30% of the global market share.

Additionally, other industry participants include foreign companies such as Aptiv (APTIV) as well as domestic companies like AVIC Optoelectronics, Luxshare Precision, Dianzhu Technology, Ruikeda, Yonggui Electric, and Weifeng Electronics.

NISOKO holds approximately 7% market share in the Chinese new energy vehicle contact sector. In the sub-sector of new energy vehicle charging port contacts, NISOKO’s market share in China is 37% in 2024, ranking first in the industry.

NISOKO plans to raise 1.373 billion yuan, mainly for investing in headquarters base projects, production construction projects for stamped contacts and copper-aluminum bus products, R&D center construction projects, and to supplement working capital.

Use of raised funds, source: prospectus

Overall, the high-voltage high-current connector contact market that NISOKO operates in is significantly influenced by the demand from the new energy vehicle market and faces competition from global giants. In the future, it may encounter certain pressures, and the specific product category is relatively niche, with limited market size ceiling.

In the future, whether the company can gain a larger share and improve its gross margin situation will be closely monitored by Gelonghui.

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