Xinfukeji Related Party Transaction Suspicions: Actual Controller Leverages Acquisition to Shift Over 100 Million Yuan in Capital, Coexists with Low-Price Procurement and High-Margin Sales | Decoding IPO

This article is sourced from: Times Business Research Institute Author: Lu Shuoyi

Source | Times Business Research Institute

Author | Lu Shuoyi

Editor | Zheng Lin

How should the boundaries of control rights be defined when the actual controller also serves as a second shareholder and executive partner?

According to the official website of the Beijing Stock Exchange, Anhui Xinfu New Energy Technology Co., Ltd. (hereinafter referred to as “Xinfu Technology”) has passed the review on February 3.

The prospectus shows that Xinfu Technology focuses on the research, development, production, and sales of thermal management components for new energy vehicles. Its main products include battery liquid cooling pipes and battery liquid cooling plates. As the actual controller of Xinfu Technology, Pan Yixin indirectly controls nearly 62% of the company’s shares through multiple limited partnership enterprises, and also serves as the chairman of its second-largest shareholder’s executive partner, but the controlling shares are not consolidated, raising concerns about the concentration of control rights.

Under the background of Pan Yixin’s high control, Xinfu Technology completed related-party acquisitions worth over 100 million yuan in 2022, but the performance of the target was halved afterward, and the synergy effects remain to be seen. Additionally, during the reporting period (2022—first half of 2025), the amount of related-party transactions by Xinfu Technology has continued to increase, raising questions about the fairness of pricing.

On February 26 and March 16, Times Business Research Institute sent emails and made calls to Xinfu Technology regarding issues such as control rights determination, related-party transactions, and related acquisitions, but as of the time of publication, no response has been received.

Disputes over control rights or not? Over 100 million yuan in related-party acquisitions involve “capital shifting”

The prospectus shows that Anqing Chuangyi No.1 Enterprise Management Partnership (Limited Partnership) (hereinafter “Chuangyi No.1”) is the controlling shareholder of Xinfu Technology. As of the signing date of the prospectus (January 26, 2026), Chuangyi No.1 held 42.72% of the shares, making it the largest single shareholder.

Pan Yixin, born in 1958, indirectly controls 61.83% of Xinfu Technology through serving as general partner of Chuangyi No.1, Chuangyi No.2, Chuangyi No.3, and Chuangyi No.4, making him the actual controller.

Meanwhile, the second-largest shareholder of Xinfu Technology, Anhui Sai Fu Huanxin Equity Investment Partnership (Limited Partnership) (“Sai Fu Huanxin”), holds 18.74%. Pan Yixin also serves as the executive partner and chairman of Anqing Sai Fu Huanxin Enterprise Management Consulting Co., Ltd. (“Sai Fu Consulting”). However, Xinfu Technology has not consolidated these control shares.

In response, the Beijing Stock Exchange’s first inquiry required Xinfu Technology to clarify whether Pan Yixin’s control over Sai Fu Huanxin constitutes actual control, and to improve the disclosure of the actual controller’s shareholding, restrictions on Sai Fu Huanxin’s shares, and related commitments.

Xinfu Technology stated that Pan Yixin does not participate in the management of Sai Fu Consulting, and in major decisions, Sai Fu Hong Kong (China Investment) Limited (“Sai Fu Hong Kong”) holds veto rights. Therefore, Pan Yixin cannot effectively control Sai Fu Consulting, and the control shares do not need adjustment.

However, in the reply to the first inquiry, Xinfu Technology did not provide cases of Sai Fu Hong Kong exercising veto rights. Is this mechanism genuinely effective or merely formal? The statement that Pan Yixin, as chairman of Sai Fu Consulting, “does not participate in management,” seems contradictory to the typical responsibilities of a chairman. Does this statement align with the usual role expectations?

Additionally, during the reporting period, Xinfu Technology purchased shares of Dalian Huanxin New Materials Technology Co., Ltd. (“Dalian Huanxin”) controlled by Pan Yixin, involving over 100 million yuan in related-party acquisitions. The necessity of such a large acquisition warrants scrutiny.

It is important to note that Xinfu Technology and Dalian Huanxin are both part of Pan Yixin’s “Huanxin system” enterprises. The public transfer prospectus of Anhui Huanxin Group Co., Ltd. (“Huanxin Group”) shows that in April 2020, the company obtained control of Xinfu Technology. Subsequently, Huanxin Group began planning for listing on the New Third Board but terminated the listing in July 2021 after five rounds of inquiries.

Later, Xinfu Technology became the listed entity of the “Huanxin system,” and acquiring Dalian Huanxin became a key part of its capital operations.

The prospectus shows that in March 2022, all shareholders of Xinfu Technology unanimously agreed to acquire 60% of Dalian Huanxin held by Huanxin Group for 67.8 million yuan; 25% held by Xin’an Commercial Co., Ltd. (“Xin’an Commercial”) for 28.25 million yuan; and 15% held by Dalian Yuantongda Trading Consulting Co., Ltd. for 16.95 million yuan, totaling 113 million yuan. Both Huanxin Group and Xin’an Commercial are controlled by Pan Yixin. After this transaction, the “Huanxin system” completed capital shifting.

In the first inquiry reply, Xinfu Technology stated that Dalian Huanxin can provide technical support, production, and service synergy for the company’s automotive thermal management system products, supply supporting materials, ensure supply chain security in key processes and parts, and maintain technological and supply foresight in fierce market competition.

However, Times Business Research Institute found that after Xinfu Technology acquired Dalian Huanxin, its net profit sharply halved.

The first inquiry reply shows that the valuation used the market comparison method, with a PE (price-to-earnings ratio) of 10.66 times. Based on this, Times Business Research Institute estimates Dalian Huanxin’s 2021 net profit at about 10.6 million yuan. However, according to Xinfu Technology’s New Third Board annual reports and prospectus, Dalian Huanxin’s net profits from 2022 to 2024 were 5.18 million, 1.55 million, and 5.53 million yuan respectively, with 2022 and 2023 profits nearly halving compared to 2021, indicating that expected synergy effects may not have been realized.

Related-party transactions continue to rise, with low procurement prices and high gross profit margins on sales

In addition to related acquisitions, Xinfu Technology’s related-party transaction amounts have been increasing, raising questions about the fairness of pricing.

The prospectus shows that during each period, Xinfu Technology’s recurring related-party procurement amounts were 11.07 million, 12.88 million, 38.24 million, and 16.87 million yuan; recurring related-party sales were 35.34 million, 39.19 million, 40.01 million, and 22.03 million yuan; occasional related-party procurement were 31.56 million, 35.35 million, 56.13 million, and 8.48 million yuan, all trending upward from 2022 to 2024.

Notably, during each period, Xinfu Technology purchased equipment from related party Anqing Andi Jiyi Precision Machinery Co., Ltd. (“Andi Precision”) for 15.78 million, 20.92 million, 43.37 million, and 7.23 million yuan respectively.

Are these large related-party procurement prices fair? The second inquiry reply states that since the equipment supplied by Andi Precision is custom-made for specific production needs, with significant customization, and there are no identical models sold simultaneously to Xinfu Technology and independent third parties, direct price comparison is not feasible.

External comparisons show that the prices Xinfu Technology paid to Andi Precision for mainly self-produced equipment were 2%–12% lower than external prices. Xinfu Technology claims that the transaction background is reasonable, the prices are fair, and there are no related-party arrangements such as cost prepayment or benefit transfer.

Furthermore, the prospectus shows that during each period, related party Anhui Dibo Gears Piston Ring Co., Ltd. (“Dibo Gears”) was among Xinfu Technology’s top five customers, with related sales of 30.35 million, 34.06 million, 33.91 million, and 18.31 million yuan, mainly for precision alloy wire products.

The first inquiry reply indicates that from 2022 to 2024, Xinfu Technology’s gross profit margins on piston ring wire sales to Dibo Gears were 41.22%, 36.77%, and 40.22%, respectively, while the overall wire material gross margins during the same period were 23.78%, 24.82%, and 25.42%, significantly lower than the margins on sales to Dibo Gears.

Xinfu Technology states that the piston ring wire products sold to Dibo Gears are currently only sold to this related party and not to other third-party customers. Therefore, direct comparison with third-party transaction prices is not possible. Comparing with similar products purchased by Dibo Gears from independent third parties shows significant differences, which Xinfu Technology attributes mainly to technical parameter differences, raw material prices, and transportation costs.

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