Huahui Intelligence faces a critical test for its listing on the Beijing Stock Exchange. The Beijing Stock Exchange Listing Committee has scheduled its 13th deliberation meeting for February 4, 2026, to review Huahui Intelligence's listing and issuance application.
The company plans to raise 344 million yuan through this offering, a reduction of nearly 100 million yuan, or over 20%, from the original target of 459 million yuan. The entire proceeds will be allocated to the Dongguan Huahui New Energy Intelligent Equipment R&D and Production Project.
While its clients face a sectoral winter, Huahui Intelligence has achieved counter-trend growth. The predecessor of Huahui Intelligence, Huahui Limited, was established in June 2010, initially operating as a precision components enterprise focused on the R&D, design, production, and sales of mechanical seals. Starting in 2016, anticipating future growth in the lithium-ion battery industry and recognizing that mechanical seals are key components in manufacturing equipment like sand mills and slurry mixers, the company decided to independently develop its own lithium battery manufacturing equipment. By the end of 2020, it successfully developed its first-generation sand mill with full proprietary intellectual property rights and began supplying downstream customers.
As the company deepened its understanding of lithium-ion battery manufacturing, its product offerings gradually evolved from complete intelligent equipment to comprehensive system solutions. In October 2021, the company launched its lithium iron phosphate production line recycling system for the first time. In the second half of 2023, it successfully developed and commenced shipments of an efficient slurry mixer for the front-end production process of lithium batteries.
The company's primary products for sale are the cathode material grinding system, standalone equipment, and precision mechanical component mechanical seals within its lithium battery intelligent equipment portfolio. Its standalone equipment encompasses various series of nano sand mills. In the sand mill sector, the company's products are recognized for their small grinding particle size, consistent grinding quality, low energy consumption, and low operational failure rates, earning widespread praise from downstream clients.
According to the prospectus, as of the signing date, the company's sand mill products have established solid cooperative relationships with several leading battery material producers, including Hunan Yuneng New Energy Battery Material Co.,Ltd. (301358.SZ), Hubei Wanrun New Energy Technology Co.,Ltd. (688275.SH), and BTR New Material Group Co., Ltd. (835185.BJ). The sand mill products enjoy high brand recognition and strong competitiveness, granting the company a certain level of influence in the lithium battery material equipment field. Data from GGII indicates that the company ranked first in the specific segment of sand mills for phosphate cathode materials in 2024.
It is important to note that the company exhibits reliance on a single major customer. During the reporting periods, combined sales revenue from the top five customers accounted for 98.57%, 98.89%, 96.90%, and 97.41% of the period's operating revenue, respectively. Sales to the largest customer, Hunan Yuneng, alone constituted 96.79%, 49.19%, 54.33%, and 78.02% of the operating revenue in the respective periods.
Notably, during the IPO reporting period, Huahui Intelligence achieved growth in both revenue and net profit against the backdrop of its clients facing performance pressures. During the reporting periods, Huahui Intelligence's operating revenue was 300 million yuan, 427 million yuan, and 616 million yuan, representing year-on-year changes of 42.07% and 44.32%. Net profit was 45.934 million yuan, 62.6219 million yuan, and 75.8244 million yuan, with year-on-year changes of 36.33% and 21.08%.
In contrast to Huahui Intelligence, its downstream customers experienced performance pressures during the same period. Since 2021, numerous new entrants joined the lithium iron phosphate sector, and existing cathode material producers initiated significant capacity expansion plans, leading to an explosion in production capacity and intense market competition. In 2023, a sharp decline in the price of lithium carbonate, a key raw material, coupled with inventory reduction efforts by battery manufacturers, resulted in periodic and structural overcapacity within the lithium battery cathode material industry. With lithium carbonate prices continuing a slow descent into 2024, the company's primary customer, Hunan Yuneng, saw its performance decline in 2023 and 2024, while Hubei Wanrun New Energy Technology Co.,Ltd. remained in a loss-making state throughout 2023, 2024, and the first nine months of 2025.
Concurrently, Huahui Intelligence's performance trajectory diverged from industry trends. The company selected comparable peers in the industry, namely Lead Intelligent Equipment Co., Ltd., Hymson Laser Intelligent Technology Co., Ltd., Honggong Technology Co., Ltd., Lingge Technology Co., Ltd., and Longxin Intelligent Equipment Co., Ltd., all of which are listed or planning-to-list companies in the lithium battery equipment field. In 2024, most of these peers experienced varying degrees of decline, creating a stark contrast with Huahui Intelligence's dual growth in revenue and net profit.
The company selected comparable peers in the industry, namely Lead Intelligent Equipment Co., Ltd., Hymson, Honggong Technology, Lingge Technology, and Longxin Intelligent, all listed or aspiring-to-list companies in the lithium battery equipment sector. Overall, these peers share high similarity with the issuer in terms of industry type, downstream sector, and financial accounting characteristics. However, significant differences exist in product segment structure, major customer base, susceptibility to industry cyclical fluctuations, and competitive landscape.
In reality, behind the performance divergence from peers lies concerns about the quality of the company's growth. During the reporting periods, net cash flow from operating activities was -55.0025 million yuan, -39.9609 million yuan, and 30.3852 million yuan, with year-on-year changes of 27.35% and 176.04%, indicating a poor ratio of net cash flow to net profit.
Questioned about premature revenue recognition? Eighty percent of annual revenue recognized solely in the fourth quarter. It was observed that the company concentrated a significant portion of its revenue recognition in the fourth quarter during the reporting periods. Data shows that in 2022, revenue recognized solely in the fourth quarter accounted for a staggering 80.98% of the full year's total. Notably, this ratio sharply decreased to 25.65% in the fourth quarter of 2024.
In 2022 and 2023, the proportion of sales revenue recognized in the fourth quarter by Huahui Intelligence was 80.98% and 46.62% respectively, exceeding the average level of its comparable industry peers.
It must be pointed out that the company's revenue recognition practices have drawn regulatory scrutiny. Reportedly, a 2024 order with Yingtan Xurui Precision Manufacturing Co., Ltd. exhibited an anomaly where the "acceptance date preceded the goods receipt date." Furthermore, the trial operation period for a project with BTR was shortened from the contractually stipulated 3 months to 2 months. Additionally, multiple orders with Yunnan Yuneng, Guizhou Yuneng, and Hunan Yuneng were concentrated for acceptance at the end of 2024, with trial production cycles noticeably shorter than other orders. In response, regulators demanded the company explain the specific circumstances of the BTR production line construction, reasons for the slower construction pace, the rationale behind accepting the nano sand mill products after only a 2-month trial run, whether this aligns with the overall project progress, and whether it constitutes premature revenue recognition.
Addressing the uneven quarterly revenue recognition, the company explained that the proportion of operating revenue in the first half of 2022, 2023, and 2024 was relatively low, while it was significantly higher in the second half, indicating seasonal unevenness in operational performance distribution. The primary reasons cited were: 1) The company's downstream customers are lithium battery raw material producers, and its sales revenue is influenced by their capacity expansion and technical upgrade plans; 2) The company's products represent fixed asset investments for downstream customers, involving lengthy production, assembly, and acceptance cycles affected by technical specifications, client requirements, and construction progress, leading to variations across projects; 3) The core products, grinding systems and nano sand mill standalone equipment, have high unit value and large order values, meaning the timing of revenue recognition for individual projects significantly impacts the seasonal distribution of sales revenue.
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