VD-2609-DG-014

Dongguan Hengrui Precision Hardware Co., Ltd.

Precision machining / CNC · Chang'an, Dongguan, Guangdong

Proceed with conditions

62/100

Workable — but capacity is 40% of what they quoted

The technical foundation is real: equipment, process capability and customer mix all check out, and the samples hold up. Three issues will hit your order directly — real capacity is 35–40% of the quote, heat treatment and anodising are fully outsourced to a shop with no environmental permit, and the lease has six months left. Negotiate on the terms below and it works. Plan against their quote and your first order slips.

What the supplier claimed Sales quote claimed 42 CNC machines, 800k units/month, all processes in-house, 25-day lead time.

01 / Five dimensions

Where this factory stands

Authenticity 78

Capacity 45

Quality systems 71

Financial health 58

Compliance risk 63

02 / Red flags

6 findings, ranked by what they cost you

High Capacity overstated by 65%

The quote states 42 CNC machines and 800k units/month. On-site count: 23 running, nine of them 2013–2015 cam-type lathes at ±0.03mm repeatability — they cannot hold the ±0.01mm on your drawing. Eleven idle: six tagged for repair, five with no nameplate. Against six months of electricity bills averaging 32,400 kWh, at 55 kWh per machine-day over 26 days, that implies 22.6 machines running. It matches the walk-through, not the quote.

What it means for you — Real output is 280–320k units/month — 35–40% of the claim. Plan against the quote and your first order will slip. Cap monthly volume at 250k and require staged delivery.

High Heat treatment and anodising fully outsourced

No furnace, no anodising line on site. Production manager Li admits heat treatment has always been outsourced to a shop three kilometres away. We visited: a single-storey sheet-metal building, two chamber furnaces, no environmental permit posted, visible acid mist. They could not produce a discharge permit.

What it means for you — Two critical processes sit outside their control. If the area hits an environmental restriction, your order stops with them. Put the subcontractor on your approved list, demand the permit, or nominate your own shop.

Medium Registered address mismatch, lease expires in six months

The business licence lists 3F, No.12 Fuhai Road; the actual workshop is Building 5, units 1–2. The owner calls it expansion space. The lease is signed by an individual, not the company, runs to March 2027, and the lessor is a sub-landlord with no authorisation from the owner on file.

What it means for you — Entity and premises don't match — this blocks premises certificates, export registrations and customer second-party audits. A short lease means relocation risk. Don't park your tooling here.

Medium 31 insured against 86 on the payroll

The August 2026 social insurance filing covers 31 people. We counted 68 on the floor, with 18 more out on deliveries. HR records list a further 39 day-rate casual workers.

What it means for you — It won't stop you ordering. It will fail any BSCI, SMETA or customer social audit. If your end brand requires compliance, this factory cannot carry that order.

Low ISO 9001 valid, process records missing for three months

Certificate issued by a regional body, valid June 2024 – May 2027. First-article records exist for Jan–Mar and Jul–Sep 2026; Apr–Jun is entirely blank. The CMM carries a May 2026 calibration sticker, but the inspector could not name the calibration body.

What it means for you — Certified on paper, not in practice. Fine for commodity parts; don't expect PPAP or full traceability.

Low Two dissolved sister companies under the same owner

The controlling shareholder has two dissolved hardware companies (2016, 2019). One carried a 2019 judgment-debt record for a sales contract dispute, since settled. The current entity has no litigation or defaulter listing.

What it means for you — Not disqualifying, but you should know. Contract with the current entity and pay into the corporate account — never a personal card.

03 / Evidence

Everything here was photographed on site

GPS coordinates and timestamps are captured at the shutter and stored with the original file. Click to enlarge.

04 / What people said

Three levels, interviewed separately

Cross-checking what the owner says against what the floor says is where most of our findings come from.

Mr Chen

Owner, 45

“We mainly serve European customers. Lead time is not an issue — we've never been late.” Verbatim, translated

When pressed on September shipments he revised: “Power was cut for five days, that batch was late, the customer understood.” Confident on lead time, selective on exceptions.

Mr Li

Production manager, 8 years

“Heat treatment has always been outside. Our customers know.” Verbatim, translated

Directly contradicts the owner's claim of full in-house processing. Two answers to one question is itself the finding.

Mr Wang

CNC operator, 2 months

“Last month I worked past 11pm more than twenty days.” Verbatim, translated

HR records state 36 overtime hours per month; his account implies about 90. The ledger is not reliable.

05 / Before you pay

Put these in the contract

Cap at 250k units/month. First order ≤80k, three batches, each inspected separately.
Demand the subcontractor's discharge permit. If they can't produce it, nominate your own shop and make them absorb the difference.
Push for 30% deposit / 70% after inspection. Do not prepay in full — cash flow here looks thin.
Add a clause covering power cuts and environmental shutdowns, with a written commitment to transfer production.
Run a DUPRO at 30% completion, not just a pre-shipment check. Problems at this factory surface mid-run.

This report was produced in 1.5 days on site. Your supplier can be checked the same way.

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