Core Viewpoint - The China Securities Regulatory Commission has approved the initial public offering (IPO) application of Jiangsu Xihua New Energy Technology Co., Ltd. (referred to as "Xihua Technology") on the Shanghai Stock Exchange, highlighting concerns regarding the company's ownership structure and financial practices [1][2]. Group 1: Ownership Structure - Xihua Technology is primarily controlled by its actual controllers, Wang Rongzheng and his second wife, Lu Yanyun, who together hold 91.66% of the voting rights, indicating a high concentration of ownership [4][5]. - The Wang family collectively controls over 96% of the company's shares, raising questions about governance and potential conflicts of interest [5][6]. - The company has faced scrutiny regarding the compliance of its ownership structure, particularly after the signing of a concerted action agreement among family members [5][6]. Group 2: Financial Practices - In 2022, Xihua Technology distributed cash dividends of 350 million yuan, nearly exhausting its net profit of 365 million yuan for 2021-2022, suggesting aggressive profit distribution practices [5][6]. - Following the large dividend payout, the company planned to raise 550 million yuan for working capital but later canceled this plan after inquiries from the Shanghai Stock Exchange [6]. - Wang Rongzheng is under pressure from a buyback agreement with external investors, which could lead to potential risks regarding performance manipulation or undisclosed risks [6]. Group 3: Related Party Transactions - The company has engaged in significant related party transactions, with family members and employees involved in several suppliers, raising concerns about financial transparency [7][8]. - From 2021 to 2023, Xihua Technology procured services from six suppliers operated by employees or their relatives, totaling approximately 3.39 million yuan over three years [8][9]. - The company has faced inquiries regarding the reasons for the cancellation of several related suppliers and the nature of financial transactions between them and Xihua Technology [10].

Core Viewpoint - Jiangsu Xihua New Energy Technology Co., Ltd. has successfully passed the IPO review on September 5, 2023, aiming to raise approximately 1.498 billion yuan for investment in wind power core equipment and R&D center projects [1] Company Summary - Xihua Technology focuses on the research, manufacturing, and sales of specialized components for large high-end equipment [1] - The company’s mainboard IPO was accepted on May 17, 2023, and entered the inquiry stage on June 13, 2023 [1] Fundraising and Investment Plans - The company plans to raise around 1.498 billion yuan, which will be allocated to the wind power core equipment industrialization project (Phase I) and the R&D center construction project after deducting issuance costs [1] Regulatory Requirements - The listing committee requested Xihua Technology to explain the correlation between the sales of its wind-related products and the bidding volume of Chinese wind turbine manufacturers [1] - The committee also required the company to justify the necessity and rationality of the new production capacity from the fundraising projects, considering industry growth rates, product structure, existing capacity utilization, project progress, and capacity digestion measures [1]