Jiachen Intelligent (920096.BJ), a Beijing Stock Exchange-listed company, has released its first financial report since going public. While both revenue and net profit recorded growth, the pace of profit expansion shows signs of deceleration, and net operating cash flow has turned negative. Notably, the company swiftly allocated 160 million yuan of idle raised funds to wealth management products, accounting for roughly 62% of its net fundraising proceeds.
Long-standing concerns regarding customer concentration and supply chain dependencies remain unresolved for Jiachen Intelligent. In the first half of this year, the top five customers contributed nearly 70% of total revenue, with Hangcha Group (603298.SH)—the company's second-largest shareholder—also serving as its largest customer, contributing 33.76% of revenue. On the upstream side, the company remains deeply tied to Sapa Group for core materials. While dependence on this single supplier has declined year over year, Jiachen Intelligent acknowledges that procurement from Sapa remains at a relatively high level, reinforced by an annual procurement agreement targeting 70 million yuan in purchases.
In the secondary market, Jiachen Intelligent shares closed at 112.01 yuan on its debut on May 18, marking an intraday peak with a gain of 676.23%. However, the stock quickly corrected after the initial frenzy. As of the close on August 20, shares stood at 34.14 yuan, down 3.4%, representing a decline of approximately 70% from the first-day high.
Cash Flow Diverges From Net Profit
Founded in 2009, Jiachen Intelligent's path to the capital markets has been turbulent. The company previously attempted an IPO on the STAR Market without success, having planned to raise 536 million yuan at that time. In May of this year, Jiachen Intelligent successfully listed on the Beijing Stock Exchange, raising approximately 260 million yuan, with net proceeds of around 221 million yuan.
Jiachen Intelligent is a high-tech enterprise providing electrical control system products and comprehensive solutions for the industrial control industry. Its main offerings include motor drive control systems, complete machine control systems, and connected vehicle products and applications. In the first half of this year, the company achieved revenue of 229 million yuan, up 19.58% year-over-year, significantly exceeding the 3.16% growth seen in the same period of 2025.
Breaking down the product structure, electrical control system products and integrated solutions generated 228 million yuan in revenue, a 19.59% increase, representing the company's core sales source. Other business revenue reached 219,600 yuan, up 279.3%, though the base remains too small to meaningfully impact overall performance. The company's value-added services segment contracted notably, with technical service revenue declining 42.17% to 159,400 yuan, partly due to lower maintenance revenue and partly due to the small base of this segment, which amplifies percentage changes despite minimal absolute variation.
The profit side appears comparatively subdued. Jiachen Intelligent reported net profit attributable to shareholders of 34.58 million yuan in the first half, up 12.16% year-over-year, a slowdown from the 20.48% growth recorded in the same period of 2025. Surging expenses are among the factors weighing on profit growth, with administrative expenses climbing 78.7% to 16.89 million yuan, primarily driven by IPO-related intermediary fees and listing activity costs.
More concerning than revenue and profit growth is the sharp deterioration in cash flow. During the first half, net cash flow from operating activities was negative 47,700 yuan, a 100.74% decline from 6.42 million yuan in the same period of 2025, attributed mainly to increased employee compensation and higher listing activity expenses. Meanwhile, net cash flow from investing activities fell 1,953.05% year-over-year to negative 159 million yuan, reflecting increased purchases of wealth management products with raised funds that remained unredeemed at period end, as well as the absence of land use right repurchases that had contributed proceeds in the prior-year period.
Net proceeds from the IPO were received on May 8. By June 11, the company announced plans to use up to 160 million yuan of temporarily idle raised funds to purchase principal-guaranteed wealth management products with terms not exceeding 12 months. Jiachen Intelligent explained that the construction of projects funded by the IPO requires a certain period, and given the current project progress, a portion of the funds is temporarily idle. According to the half-year report, the company reached the 160 million yuan cap on bank wealth management product purchases, representing approximately 62% of total funds raised.
Over a longer timeframe, Jiachen Intelligent's preference for wealth management investments is clear. From 2023 to 2025, net cash flow from investing activities was 12.23 million yuan, negative 136 million yuan, and negative 46.97 million yuan, respectively, with cash paid for investments reaching 252 million yuan, 1.22 billion yuan, and 1.48 billion yuan across those years. In the first half of this year, cash paid for investments totaled 616 million yuan, primarily for wealth management products, compared to 524 million yuan in the same period of 2025.
Customer Concentration and Supply Chain Dependency Challenges Persist
Jiachen Intelligent's primary customers are industrial vehicle manufacturers, including Hangcha Group, Anhui Heli (600761.SH), Noblelift (603611.SH), BYD (002594.SZ), and Jianghuai Yinlian. In the first half, revenue from the top five customers reached 159 million yuan, accounting for 69.62% of total revenue. From 2023 to 2025, the share of revenue from top five customers stood at 87.71%, 82.02%, and 76.17%, respectively. While concentration has been gradually easing, it remains at elevated levels.
In terms of industry structure, the top ten industrial vehicle manufacturers in China accounted for over 78% of the market in 2024. The high concentration among vehicle manufacturers in China's industrial vehicle market objectively leads to customer concentration among key component suppliers. In the first half of this year, Hangcha Group and Anhui Heli ranked as the first and second largest customers, contributing 77.25 million yuan and 36.57 million yuan, representing 33.76% and 15.98% of revenue, respectively, with a combined share of nearly half of total revenue.
From 2023 to 2025, Hangcha Group and Anhui Heli have consistently held the top two customer positions, with combined revenue contributions of 62.16%, 61.69%, and 53.76% across those years. Notably, the relationship between Jiachen Intelligent and Hangcha Group extends beyond ordinary commercial cooperation. As early as 2018, Hangcha Group took an equity stake in Jiachen Intelligent and now holds 16.86% of the company, making it the second-largest shareholder. Hangcha Group has also appointed director Xu Zhengyu, whose term runs from September 30, 2024 to September 30, 2027.
Although revenue from Hangcha Group has gradually declined from 44.69% in 2023 to 33.76% in the first half of this year, the share remains above 30%. Combined with top-five customer revenue concentration staying above 70%, the operational risk from customer concentration remains pronounced.
Beyond downstream customer concentration, supply chain concerns cannot be overlooked. In the half-year report, the company noted that procurement of ZAPI and INMOTION brand motor controllers, electrical components, and structural parts from Sapa Group accounted for a relatively high proportion of total raw material and outsourced procurement during the period. While specific figures were not disclosed, based on data from 2023 to 2025, procurement from Sapa Group represented 69.96%, 53.1%, and 44.37% of total procurement in each respective year. Even with the declining trend, Sapa remains central to the company's procurement system.
Additionally, Jiachen Intelligent has signed an annual procurement agreement with Sapa Group containing a performance target. Under the terms, if the company fails to meet the agreed annual procurement amount from Sapa Group, it must compensate Sapa with 10% of the difference between the target and actual purchase amount. For the period from February 1, 2026 to December 31, 2026, the annual procurement target for Tianjin Sapa products and other Sapa Group products is set at 70 million yuan.
To mitigate the risk of over-reliance on a single supplier for key raw materials, Jiachen Intelligent is accelerating domestic substitution efforts. The company plans to increase the share of revenue from self-manufactured motor controllers to 50%-60% within three to five years.