Lain Precision's Second IPO Attempt Failed: from CITIC Securities to CITIC BuildInvest, Two Rounds of Guidance Yielded No Results, Zhang Xiuzhuo and Daughter's Dream Dashed Again | Yangtze River Delta Capital Bureau

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Writer | Sina Finance Shanghai Station Shili

Another “Little Giant” Falls at the IPO Gate.

On March 23, Suzhou Laien Precision Alloy Co., Ltd. approved the termination of its application to list on the Beijing Stock Exchange. This is the company’s second setback after withdrawing from the Growth Enterprise Market in 2021. For a manufacturing company founded in 1999, this capital journey has lasted over twenty years but has never truly been successful.

If we break down the timeline, this company resembles a typical “father-daughter relay.”

Zhang Jianyuan was born in 1959, with a high school education. Starting in the 1970s at a textile supplies factory and an explosion-proof motor factory in Wuxian, he held various positions. In the 1990s, he entered the manufacturing entrepreneurship track, serving as factory director of a metal products factory and executive director of an electrical appliance company. In 1999, he founded Nichi-Ten, the predecessor of Laien Precision. Over the next twenty years, he basically completed the transformation from a township enterprise system to an export-oriented manufacturing enterprise, laying the initial industrial foundation for the company.

Another line involves the entry and succession of Zhang Xiuzhu. Born in 1985, she has an economics and finance background from the University of Exeter in the UK and a master’s degree in finance from St. Mary’s University in Canada. She joined the company in 2010, starting as a salesperson, gradually becoming executive director and general manager, and officially taking over as chairman in 2019. In 2020, she also became general manager, completing the transfer of power from founder to “post-85” successor.

Thus, the company has been condensed into a highly centralized structure: founded by the father, succeeded by the daughter, with both controlling all voting rights. Zhang Xiuzhu holds 90% of the controlling shareholder Flain Group, while Zhang Jianyuan owns 7.10%. Operations and decision-making are almost entirely internalized within the family. This structure is highly efficient but also demands higher transparency and regulatory compliance in the capital market context.

Problems gradually emerged within this structure.

In 2021, the company made its first attempt to list on the Growth Enterprise Market. An on-site inspection revealed key issues with the company’s internal financial controls: funds were transferred through contracts with subsidiaries that had no real business background, to meet bank entrusted payment requirements—“re-lending” behaviors that continued after the audit deadline. Additionally, the company disclosed over 350 work-related injury incidents (including fatalities) inadequately, and there were multiple inaccuracies in disclosures related to supplier information and financial notes. Ultimately, the IPO was halted during review.

During the 2021 attempt, Laien Precision’s sponsor was Changjiang Securities. After issues with financial internal controls were exposed, the company withdrew its application in July 2022. Three years later, the company shifted to the Beijing Stock Exchange, with CITIC Construction Investment Securities guiding the process. By 2025, it completed the guidance acceptance and submitted the application again, restarting the listing process. However, new variables began to influence this round of application.

During the 2024 IPO push, Zhang Xiuzhu divorced and transferred her shares to her mother without compensation, along with arrangements for nominee holding. The company explained this as “pre-marriage property planning.” Family-wise, this arrangement is not complicated: the transfer reallocated shares among family members, and nominee holding created a separation between nominal ownership and actual control.

But when this operation coincides with the IPO timeline, its implications change.

The simple shareholding structure, originally controlled directly by father and daughter, now involves new shareholders and nominee relationships. The logic of “who holds, who controls, who makes decisions” needs to be reinterpreted. In regulatory terms, such arrangements are scrutinized under the stability of control and the adequacy of disclosures. Especially without external shareholders to check power, any adjustments around equity are amplified into governance issues rather than just family matters.

Meanwhile, the company’s operational foundation remains fragile.

The 2025 semi-annual report shows that as of June 30, 2025, the company achieved revenue of 490 million yuan, an increase of 8.29%; net profit attributable to shareholders was 31.15 million yuan, down 5.1%.

From father’s entrepreneurship to daughter’s succession, this is a typical Chinese manufacturing enterprise inheritance path; but from the Growth Enterprise Market to the Beijing Stock Exchange, two IPO terminations outline a more realistic trajectory: internal control issues, disclosure flaws, and changes in shareholding structures are repeatedly brought into review.

In the standards of the capital market, the “Specialized, Refined, Unique, and Innovative Little Giant” label can build a growth narrative but cannot replace basic requirements for compliant operation. For Laien Precision, the father and daughter have jointly built and continued the enterprise, but they also tightly bind control rights and risks together.

Between the two IPO attempts, the company changed boards and intermediaries, but the real determinants of progress are not the paths themselves but the structural issues that have never been fully resolved.