New Quán Automotive Accessories Hong Kong IPO: Revenue Growth Slows, Customer Concentration and Profit Decline Draw Attention

Ask AI · Can an HKEX IPO help the company break through its profit decline bottleneck?

Previously, Xinqüan Automotive Trim Parts had submitted an application to the Hong Kong Stock Exchange for a main board listing. This IPO is underwritten exclusively by CITIC Securities.

The company is a leading provider of end-to-end interior and exterior automotive trim system solutions in China. In recent years, its revenue has maintained growth, but the growth rate has slowed. The prospectus shows that in the first three quarters of 2025, the company achieved revenue of RMB 11.364 billion, up 18.8% year over year; net profit was RMB 614 million, down 10.4% year over year.

The company listed on the SSE main board in March 2017, and its total market capitalization exceeds RMB 30 billion. In terms of equity structure, founder Tang Zhihua directly and indirectly holds 33.62% of the company’s shares, making him the controlling shareholder.

A leader in automotive interior trim, collaborating with multiple top automakers

Xinqüan Automotive Trim Parts is a provider of automotive trim system solutions. It mainly serves vehicle manufacturers, engaging in the R&D, production, and sales of complete automotive interior and exterior trim assemblies. The company’s interior system solution covers instrument panel assemblies, overhead console assemblies, door panel assemblies, and interior trim accessories; its exterior system solution covers bumper assemblies, exterior trim accessories, seat assemblies, and seat accessories.

Figure 1: Xinqüan Automotive Trim Parts products

From the revenue structure perspective, interior system solutions are the main source of revenue. In the first three quarters of 2025, this business accounted for 81.1% of revenue; revenue shares for exterior system solutions and seat & seat accessory solutions were 5.9% and 3.9%, respectively.

According to data from Frost & Sullivan, when calculated by mid-to-high-end complete-vehicle interior trim system solution revenue in 2024 and by all-category complete-vehicle interior trim system solution revenue in 2024, the company ranks as the second-largest provider of automotive trim system solutions in China, with market shares of 8.3% and 7.8%, respectively.

Backed by advantages such as technological innovation capabilities, product quality, and stable delivery, the company has established cooperation relationships with many top automotive manufacturers at home and abroad. Its commercial vehicle customers include FAW Jiefang, China National Heavy Duty Truck Group, Foton Motor, and other heavy and medium-duty truck OEMs; for passenger vehicles, it serves traditional industry leaders such as Geely Automobile, BYD, and Great Wall Motors, as well as emerging new energy vehicle brands such as Li Auto.

Revenue growth slows down; relies relatively heavily on the top five customers

In recent years, Xinqüan Automotive Trim Parts has shown a steady upward trend in revenue. However, starting in 2024, the revenue growth rate began to decline. The prospectus shows that in 2023 and 2024, the company achieved operating revenue of RMB 10.548 billion and RMB 13.198 billion, respectively, with a year-on-year growth rate of 25.1% in 2024. In the first three quarters of 2025, the company’s revenue was RMB 11.364 billion, up 18.8% year over year.

In 2023 and 2024, the company’s net profit was RMB 805 million and RMB 974 million, respectively. In the first three quarters of 2025, net profit was RMB 614 million, down 10.4% year over year.

Figure 2: Xinqüan Automotive Trim Parts financial data

The company’s gross margin shows small fluctuations. In 2023 and 2024, gross margin was 18.9% and 19.3%, respectively. In the first three quarters of 2025, the company’s gross margin fell to 17%, mainly because the gross margin of its interior instrument panel assemblies decreased from 20.9% to 17.7%.

In the first three quarters of 2025, the company’s net cash flow from operating activities was approximately RMB 189 million, down 61.5% year over year. At period end, the company had cash and cash equivalents of RMB 749 million, and short-term borrowings of RMB 862 million. Trade receivables and bills receivable, and trade payables and bills payable were RMB 4.046 billion and RMB 7.148 billion, respectively, indicating pressure on short-term liquidity.

Analysis shows that the company’s revenue is relatively dependent on its top five customers. In 2023, 2024, and the first three quarters of 2025, revenue from the top five customers was RMB 7.478 billion, RMB 9.889 billion, and RMB 8.735 billion, respectively—accounting for 70.7%, 74.6%, and 76.5% of revenue in the same periods, respectively. Among them, the revenue of the largest customer accounted for 21.3%, 22.6%, and 29.4% of total revenue in the same periods, respectively.

Recently, Xinqüan Automotive Trim Parts’ A-share-listed company, Xinquan Shares, disclosed its 2025 annual report. The company’s revenue and attributable net profit changed by 17.04% and -16.54% year over year, respectively, and its gross margin decreased by about 1.6 percentage points year over year.

A-share market value exceeds RMB 30 billion; founder controls 33.62%

Xinqüan Automotive Trim Parts listed on the A-share market in 2017 (Xinquan Shares 603179.SH). As of March 24, 2026, the latest closing price of the company’s A-shares is RMB 60.16 per share, corresponding to a total market capitalization exceeding RMB 30 billion.

In terms of equity structure, founder Tang Zhihua directly holds 8.69% of the shares, and also holds an additional 24.93% indirectly through Xinqüan Investment, for a combined total holding of 33.62%, making him the controlling shareholder of the company.

Figure 3: Xinqüan Automotive Trim Parts equity structure

As clearly disclosed in the prospectus, the fundraising proceeds from this HKEX IPO will be used to expand automotive seat production lines, advance global expansion, strengthen R&D capabilities, and place emphasis on next-generation technologies and materials, as well as to be used as working capital and other general corporate purposes.

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(Article sequence number: 2016790882556186624/PLH)

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