Guangdong Hengyi Energy Technology Co., Ltd. is pushing forward with its ChiNext IPO, having recently responded to the third round of inquiry letters. Scrutiny of the company's filing reveals a pronounced dependency on its top five clients, a concentration level that surpasses its industry peers. The composition of this reliance has shifted over the reporting period, moving from a heavy dependence on CATL to a subsequent reliance on ACC. This significant client concentration poses a potential threat to the company's long-term operational stability, functioning as a double-edged sword.
Adding to the concerns, ACC's own financial health is precarious, with its shareholder and primary mass-production client, Stellantis, recording a substantial net loss of 22.3 billion euros in 2025. Furthermore, in February 2026, ACC's management announced a halt to its battery plant construction projects in Germany and Italy. The situation is further complicated by the fact that CATL is not only a major customer but also a related party and shareholder. Related-party transactions accounted for over 30% of Hengyi's revenue from 2023 to 2025, raising questions about its operational independence. Underlying these issues is a financial red flag: while revenue grew by 54% from 2022 to 2025, accounts receivable ballooned nearly threefold from 0.56 billion yuan to 1.97 billion yuan. Compounding this, a disproportionately high share of revenue is recognized in the fourth quarter, with figures exceeding 44% in both 2024 and 2025, a trend that stands out significantly against industry norms.
Client Concentration Risks and Shareholder Losses
Hengyi Energy specializes in the R&D, production, and sale of core equipment and integrated solutions for the post-processing of lithium batteries. Between 2023 and 2025, the company reported revenues of 11.05 billion yuan, 12.41 billion yuan, and 14.27 billion yuan, alongside net profits attributable to parent of 1.14 billion yuan, 0.83 billion yuan, and 1.02 billion yuan, respectively. Notably, 2024 saw an increase in revenue but a decline in profit. Over this same period, sales to its top five customers represented a staggering 96.24%, 94.62%, and 95.53% of total revenue, a level of customer concentration that is the highest among its listed peers.
The prospectus identifies peers such as 先导智能, 杭可科技, 利元亨, and 星云股份 for comparison. In contrast to their average top-five customer concentration of 63.32%, 52.75%, and 64.6% for the years 2023-2025, Hengyi's near-95% figure is conspicuously higher. The company's reliance on its largest client has been particularly intense. In 2022 and 2023, CATL accounted for 70.69% and 79.98% of revenue, respectively, leading Hengyi to acknowledge a single-client dependency. While this share dropped to 40.67% in 2024 and further to 32.27% in 2025, the company simultaneously increased its reliance on ACC, which grew to represent 39.99% of 2025 revenue. This transition from CATL to ACC has been described as a shift in anchor clients, but the fundamental risk of single-client dependence remains.
The sustainability of Hengyi's high-margin orders from ACC is questionable given the latter's operational difficulties. In 2025, ACC's shareholder and primary client, Stellantis, incurred a net loss of 22.3 billion euros, partly due to overestimated European EV demand and asset impairments, including a 2.1 billion euro write-down on ACC's overseas battery plant projects. The subsequent halt of German and Italian plant construction in February 2026 casts further doubt on future order flow from ACC. This risk materialized in the latter half of 2025, when revenue from ACC plummeted to approximately 96 million yuan, an 80% drop from the 474 million yuan generated in the first half, demonstrating how changes in a key customer's project timeline directly impact equipment orders and revenue recognition.
Related-Party Dynamics and Independence Concerns
Hengyi's relationship with CATL extends beyond that of a typical customer-supplier dynamic. In December 2021, a wholly-owned subsidiary of CATL, 问鼎投资, invested in Hengyi and now holds a 5.9586% stake, making it the company's fourth-largest shareholder. Sales to CATL from 2022 through 2025 amounted to 652 million yuan, 884 million yuan, 505 million yuan, and 460 million yuan, respectively, constituting 70.69%, 79.98%, 40.67%, and 32.27% of total revenue for each year—all figures exceeding the 30% threshold.
The ChiNext listing rules mandate that a prospective issuer possess business independence and the ability to operate independently and sustainably in the market. This includes ensuring no significant related-party transactions that could compromise independence or fairness. Regulatory guidelines further require sponsors and issuers' counsels to thoroughly investigate and opine on whether related-party transactions affect an issuer's independence. While the regulatory "red line" for related-party transaction ratio has been removed, a ratio exceeding 30% still attracts significant market and regulatory attention. Hengyi's situation, where its top customer is also a shareholder, makes proving its independence a particularly complex challenge compared to standard cases.
Soaring Receivables and a Lopsided Q4 Revenue Pattern
The high customer concentration has a direct financial consequence: a sharp increase in accounts receivable. These grew from 0.56 billion yuan in 2022 to 1.97 billion yuan in 2025, a roughly threefold surge, while revenue increased by only 54% over the same period. This means receivables grew at a rate nearly six times faster than revenue. Concurrently, the accounts receivable turnover ratio has been declining, from 5.83 times per year in 2022 to 3.30 times per year in 2025. Since over 95% of revenue comes from just five clients, the receivables are also heavily concentrated. Any significant adverse change in the financial position of a major client like CATL or ACC could jeopardize the collection of these funds. Given ACC's existing financial struggles, the question of whether the substantial receivables from ACC represent a potential bad debt risk remains a critical concern.
From a financial perspective, the growth of receivables outpacing revenue suggests a slowdown in collections, which could indicate relaxed credit policies or premature revenue recognition. An examination of Hengyi's revenue patterns reveals a strong year-end concentration. In the fourth quarter of 2024, the company recognized a significant 55.91% of its annual revenue. This was largely attributed to the centralized acceptance and revenue recognition of 357.45 million yuan from specific ACC projects. This trend continued into 2025, with the fourth quarter contributing 44.56% of annual revenue. This is a marked shift from 2023, when the fourth quarter accounted for only 23.33%. The Shenzhen Stock Exchange has specifically questioned the fact that many major customer orders were confirmed and accepted in December 2024.
This quarterly revenue distribution is exceptionally skewed compared to industry benchmarks. For instance, in Q4 2024, the revenue proportions for comparable companies 先导智能, 杭可科技, 利元亨, and 星云股份 were 23.14%, 10.40%, 6.43%, and 26.54%, respectively. These figures are all significantly lower than Hengyi's 55.77% for the same period. The average Q4 revenue share for these peers was just 16.63%, less than a third of Hengyi's concentration.