Core Viewpoint - Suzhou Huichuan United Power System Co., Ltd. (referred to as "United Power") has submitted its IPO prospectus to the Shenzhen Stock Exchange, raising concerns about its operational independence from its parent company, Huichuan Technology, due to significant related party transactions and governance issues [1][2]. Group 1: Company Structure and Independence - United Power is the only entity under Huichuan Technology that operates electric drive systems and power systems for new energy vehicles [1]. - Huichuan Technology holds 94.51% of United Power's shares, raising questions about the independence of United Power's operations and governance [2]. - Concerns have been raised regarding the independence of United Power, particularly due to substantial related party transactions, with Li Auto being its largest customer, contributing over one-third of its revenue [1][2]. Group 2: Equity Incentives and Governance Issues - United Power granted stock options to six employees of Huichuan Technology, who are not employees of United Power, which has sparked discussions about the compliance of this practice [2][3]. - The stock options granted to these six employees amount to a total of 1.45 million shares, with a potential value exceeding 7 million yuan based on the IPO pricing [3]. - The timing of the stock option grants, which occurred before the IPO announcement, raises questions about the appropriateness of such incentives [4]. Group 3: Shared Resources and Accounting Concerns - United Power has acknowledged the use of Huichuan Technology's ERP system without charge, which has led to investor concerns regarding the implications for financial reporting and the independence of operations [6][7]. - The rationale for the "free use" of the ERP system has been questioned, particularly in light of the complexities introduced by the dual listing of both companies [6][7]. - Legal experts have indicated that while the practice of granting stock options to non-employees is not explicitly prohibited, it raises issues regarding compliance with regulations governing equity incentives [4][7].