Inovance(SZ:300124) Di Yi Cai Jing·2025-06-08 10:11Core Viewpoint - Suzhou Huichuan United Power System Co., Ltd. (hereinafter referred to as "United Power") has achieved rapid revenue growth through related party transactions, raising concerns about its operational independence as it prepares for an IPO on the ChiNext board [1][2]. Group 1: Business Operations and Revenue Growth - United Power primarily engages in the research, production, and sales of electric drive systems and power systems for new energy vehicles, being the sole entity under Huichuan Technology (300124.SZ) for this business [2]. - The company reported significant increases in revenue from related party sales, with major transactions amounting to 9.6 billion, 19.67 billion, and 44.49 billion yuan over the reporting period, representing 19.11%, 21.01%, and 27.50% of total revenue respectively [4]. - The largest customer, Li Auto (02015.HK), accounted for over one-third of United Power's revenue, raising concerns about the impact of ongoing price wars in the automotive sector on profitability [1][8]. Group 2: Market Position and Competition - United Power's market share for its main products is around 10%, with significant competition in the automotive supply chain, leading to increased pricing pressure from automakers [10]. - The company has established a stable partnership with Li Auto, with sales of electric drive systems and power systems continuing to grow as Li Auto's vehicle deliveries increase [8]. - In the new energy passenger vehicle market, United Power ranks first among third-party suppliers for its electric control products and motors, with market shares of approximately 10.7% and 10.5% respectively [9]. Group 3: Related Party Transactions and Regulatory Scrutiny - The company has faced regulatory inquiries regarding its independence and the nature of its related party transactions, particularly with Changzhou Huixiang and Suzhou Huichuan, which are affiliated entities [3][4]. - United Power's sales to Changzhou Huixiang, a joint venture with Li Auto, have significantly increased due to the successful sales of Li Auto's vehicles, leading to a strategic partnership [5][8]. - The pricing of related party transactions is claimed to be fair and based on market references, although the regulatory body has requested further analysis of these transactions [5][6].