Ask AI · Why does Aiwei Electric’s prospectus avoid the Ministry of Finance’s financial issues?

By Wen | Zhang Jiaru

In January 2025, the Ministry of Finance issued an administrative penalty decision letter. The audit firm Juyuan Lide was punished in accordance with law. Although this penalty targets the audit institution, it also points out that Shenzhen Aiwei Electric Technology Co., Ltd. had multiple problems of inflating and deflating various financial figures in 2022.

According to publicly available information, Shenzhen Aiwei Electric Technology Co., Ltd. is the predecessor of Shenzhen Aiwei Electric Technology Co., Ltd. (hereinafter “Aiwei Electric”), which is currently rushing to complete its IPO.

In June 2025, Aiwei Electric disclosed its prospectus as it sought a ChiNext IPO on the SZSE. The audit institution is no longer Juyuan Lide, but it makes no mention of the financial issues revealed by the Ministry of Finance, and the disclosed 2022-related figures differ from the interpretation adopted by the Ministry of Finance.

On March 30, 2026, Aiwei Electric disclosed a revised prospectus. The reporting period is 2023 to 2025, and it no longer discloses data from 2022. Whether it can pass the regulator’s renewed scrutiny of the authenticity of its financials is still subject to testing.

After the revised prospectus was released, it also drew attention from the outside world. From 2023 to 2025, Aiwei Electric’s revenue and profits grew year by year, its gross margin declined year by year, and over the past three years it distributed a total of RMB 58.88 million in dividends. It plans to raise RMB 930 million, including RMB 70 million for “supplementing working capital.”

Against the backdrop of ongoing dividend distributions, Aiwei Electric still needs to raise funds to “supplement working capital,” prompting market concerns about its endogenous cash-generating ability and the necessity of the “supplement working capital” use.

Even more noteworthy is that right before the prospectus was signed, the dispute over equity entrusted holding between the actual controller Liang Xianghui and former partner Han Guang had not yet gone to trial in the second instance. If the second instance judgment changes, would it shake the legitimacy of the equity source for Liang Xianghui as actual controller, thereby triggering the IPO review red line of “clear equity”?

Aiwei Electric’s IPO appears full of twists and turns.

Named by the Ministry of Finance, embroiled in a fraud scandal, yet the prospectus is “silent”

Aiwei Electric was established in October 2017, and its founder is Liang Xianghui, a former Huawei employee.

From April 2011 to October 2017, Liang Xianghui served as a senior engineer in Huawei’s data center energy development department. During his time at Huawei, Liang Xianghui also discovered a market gap in new energy vehicle thermal management systems, and he teamed up with Han Guang—who had management experience at several companies—to start a business together.

After eight years of development, the prospectus disclosed in June 2025 shows that Aiwei Electric has developed into the largest third-party supplier of high-voltage thermal management controllers for new energy vehicles in China, initially forming a product matrix consisting of high-voltage thermal management controllers and charging modules.

In terms of performance, Aiwei Electric has kept “reporting good news” year after year. From 2022 to 2024, the company’s revenue was RMB 215 million, RMB 341 million, and RMB 442 million, respectively, while the net profit attributable to the parent company was RMB 57 million, RMB 86 million, and RMB 106 million, respectively.

However, a single penalty notice from the Ministry of Finance revealed a crack behind Aiwei Electric’s impressive financial reports.

On January 23, 2025, the Ministry of Finance’s website published an administrative penalty letter stating that, in the audit of Aiwei Electric’s 2022 financial statements, the accounting firm Juyuan Lide failed to carry out necessary audit procedures. In the audit working papers it prepared, some data had clear contradictions with audit evidence already obtained, or major inconsistencies, and it fabricated reasons to issue a false audit report.

In the penalty letter, the audited party is “Shenzhen Aiwei Electric Technology Co., Ltd.” According to the prospectus, “Shenzhen Aiwei Electric Technology Co., Ltd.” is the predecessor of Aiwei Electric, and in December 2023 it underwent an overall change to “Shenzhen Aiwei Electric Technology Co., Ltd.”

The Ministry of Finance clearly pointed out that Aiwei Electric’s 2022 financial data contained multiple distortions. For example: it “reduced” cash and cash equivalents by 89%, “reduced” accounts receivable by 25%, “reduced” inventory by 55%, “reduced” accounts payable by 66%, “reduced” dividends payable by 100%, “increased” undistributed profits by 111%, and “increased” R&D expenses by 33%.

These operations formed a systematic “beautification” effect on the financial statements: on the asset side, the company optimized asset turnover efficiency and created a “light-asset, high-turnover” image. On the liability side, it embellished its debt-servicing ability and concealed the true capital pressure. On the profit and technological-innovation attributes side, it strengthened the narrative of “high R&D and high profitability.”

It is worth noting that the date the Ministry of Finance issued the penalty decision letter was five months earlier than the disclosure date of Aiwei Electric’s prospectus, yet the company said not a word about it in its prospectus. Was the company really completely unaware that the Ministry of Finance had called out its financial fabrication?

So, when Aiwei Electric disclosed its prospectus, did it amend its financial data based on the Ministry of Finance’s data? Taking the figure for monetary funds as an example:

According to information in the Ministry of Finance’s penalty letter, Aiwei Electric “reduced” monetary funds by RMB 13.7596 million, with a “reduction ratio” of 89%. This corresponds to real monetary funds of RMB 15.4602 million, whereas the figure disclosed by Aiwei Electric at the time was approximately RMB 1.70 million.

In June 2025, after Aiwei Electric changed its audit institution in the prospectus it disclosed, the monetary funds for 2022 it reported were RMB 16.4489 million. It is not difficult to see that this figure is close to the real financial figure recognized in the Ministry of Finance’s penalty letter, but there are still differences in the specific amount.

At present, Aiwei Electric has not made any explanation regarding the discrepancies between the prospectus figures and the Ministry of Finance’s conclusions.

Dividend distributions and fundraising to “supplement working capital” proceed in parallel, with the dispute over equity entrusted holding by the actual controller still unresolved

On March 30, 2026, Aiwei Electric updated its prospectus and continued to keep silent about the historical financial issues pointed out by the Ministry of Finance. More importantly, the new prospectus adjusted the reporting period to 2023–2025 and no longer discloses 2022 data. Whether the regulator will issue inquiries about the historical financial issues is worth continued attention.

According to the latest prospectus, from 2023 to 2025, Aiwei Electric’s operating revenue was RMB 341 million, RMB 442 million, and RMB 707 million, respectively; the net profit attributable to the parent company was RMB 86.4171 million, RMB 106 million, and RMB 148 million, respectively.

According to the prospectus, Aiwei Electric’s customers include Geely, Li Auto, Chery, GAC, Changan, BYD, Leapmotor, Seres, FAW and others. During the reporting period, the sum of sales to the top five customers as a proportion of the company’s operating revenue for the same period was 93.31%, 84.52%, and 87.77%, respectively.

Based on historical experience, a high customer concentration is beneficial for driving the company’s rapid expansion of revenue, but it also makes the stability of the company’s operations depend on a small number of major customers. If the main customers adjust their procurement strategies, it may impact the company’s performance. At the same time, customer concentration often weakens the company’s bargaining power, affecting its profitability.

It is worth noting that while the scale of its performance has expanded, Aiwei Electric’s gross margin has continued to decline. From 2023 to 2025, the company’s consolidated gross margins were 42.55%, 41.71%, and 39.87%, respectively.

In response, Aiwei Electric explained that in the automotive parts industry, customers typically require a certain year-on-year price reduction after new product batch supply, which creates pressure on gross margin.

Against the backdrop of the decline in gross margin, Aiwei Electric is also implementing dividend distributions and plans to use IPO-raised funds to replenish working capital through the IPO. This arrangement has led the market to question its ability to “generate cash from within” and the necessity of its fund-raising projects.

The prospectus shows that from 2023 to 2025, Aiwei Electric’s cumulative cash dividends amounted to RMB 58.88 million. In this IPO drive, the company plans to raise RMB 930 million, of which RMB 70 million is clearly allocated for “supplementing working capital.”

For Aiwei Electric’s dividend distribution, the actual controller Liang Xianghui is the largest beneficiary. Liang Xianghui directly holds 47.89% of the company’s shares, and together he controls 56.09% of the company’s voting rights.

According to the prospectus, when Aiwei Electric was established, Liang Xianghui did not directly hold shares. In October 2017, when Aiwei Electric’s predecessor, Aiwei Co., Ltd., was set up, Han Guang, who co-founded the business with Liang Xianghui, held 100% of the equity in Aiwei Co., Ltd., with 95% entrusted on behalf of Liang Xianghui. Based on the trust relationship between the two parties, they did not sign a delegated equity holding entrustment agreement.

In July 2018 and January 2021, Han Guang transferred all the equity he held on behalf of others to Liang Xianghui in two installments. In October 2021, Han Guang transferred 5% of the equity of Aiwei Co., Ltd. to Liang Xianghui; from that point on, Han Guang no longer held any shares in Aiwei Co., Ltd.

This means that as Aiwei Electric rushes toward its IPO, Han Guang, as Liang Xianghui’s founding partner, will not get a seat at the capital feast.

For reasons unknown, Han Guang was unwilling to accept interviews by intermediaries or issue other explanatory documents regarding this matter. As a result, Liang Xianghui applied for arbitration and even sued Han Guang in court. The court of first instance ruled to confirm Han Guang’s history of delegated holding. Han Guang is dissatisfied with the ruling and has appealed; the second-instance trial has not yet been held.

So, if the second-instance court overturns the original judgment, will it shake the legitimacy of Liang Xianghui’s equity source as actual controller, thereby triggering the IPO review red line of “clear equity”? The regulator has previously focused on questioning this.

Aiwei Electric replied that the three instances of equity changes between Han Guang and Liang Xianghui, in each case, were accompanied internally by equity transfer agreements, and externally the parties also completed industrial and commercial change registrations and public disclosure, so the equity ownership is clear. The unresolved lawsuit is only to support the factual circumstances of the history of delegated equity holding.

Standing at the threshold of the IPO, Aiwei Electric is on one side with rapid growth in revenue and endorsement from top customers, but on the other side with historical financial irregularities that the Ministry of Finance has pointed out. In the current regulatory direction of strengthening information disclosure quality and corporate governance, Aiwei Electric’s path to push through the IPO has drawn widespread attention.

Because Aiwei Electric previously carried the history of fabricated and deflated financials disclosed by the Ministry of Finance, for IPO applicants like this, they need even stricter review at the IPO regulatory stage.

Even if all IPO disclosure compliance indicators are met, such IPO applicants should also be included in on-site inspections, and passing the inspection should be one of the prerequisites for listing. Only then can it dispel investors’ concerns about risk. This is not only to maintain fairness and justice in the stock market, but also to protect investors’ investment safety.