Core Viewpoint - The successful listing of Suzhou Huichuan United Power Co., Ltd. marks a significant development in the "A-share split" process, indicating that strict regulations do not equate to a complete halt in the market, but rather a new normal for regulatory practices [2][5]. Summary by Sections Recent Developments - Huichuan Technology's subsidiary, United Power, has received approval for its initial public offering on the ChiNext board, becoming the second case of "A-share split" after the new "National Nine Articles" policy [1]. Regulatory Environment - The approval of United Power reflects a shift in regulatory signals, suggesting that high-quality and compliant split listings are still viable under the new regulatory framework [2][4]. - The new "National Nine Articles" policy aims to curb blind splits and arbitrage, establishing a clear boundary for future split listings [4]. Company Qualifications - United Power meets stringent regulatory standards in terms of business independence, technological innovation, and sustainable growth, which are critical for passing the regulatory scrutiny [5]. - The company has established a robust independent operational framework since its inception in 2016, focusing on electric drive systems and power systems for electric vehicles [5]. - United Power has developed 26 core product technologies and holds 98 invention patents, showcasing its technological leadership [5]. Parent Company Stability - Huichuan Technology, as a leading player in the industrial control sector, has demonstrated strong financial health, with a reported revenue of 37.04 billion yuan in 2024, up 21.77% year-on-year [6]. - The split is expected to enhance both companies' focus on their core businesses and improve overall market visibility and valuation [6]. Industry Synergy - United Power plays a pivotal role in the electric vehicle supply chain, linking upstream components and serving downstream automotive manufacturers, thus contributing to the integration and upgrading of China's automotive industry [7]. - The company aligns with national strategies for developing the electric vehicle sector, which is a key area for sustainable economic growth [7]. Market Implications - The case of United Power serves as a benchmark for future split listings, emphasizing the need for financial independence and strategic necessity for subsidiaries seeking to go public [9][10]. - The regulatory focus on maintaining a balance between strict oversight and promoting high-quality development is evident in the scrutiny applied to United Power's listing process [10][11]. Conclusion - The successful split of United Power not only provides a new platform for its growth but also exemplifies the role of capital markets in supporting technology-driven companies, potentially leading to more compliant and high-quality "A-share split" cases in the future [14][15].

Core 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].