Produced by | Frontline of Entrepreneurship

Art Editor | Xing Jing

Reviewed by | Song Wen

Within the sprawling landscape of the new energy vehicle (NEV) industry chain, thermal management components like liquid cooling pipes, liquid cooling plates, and electronic control radiators may not command the same attention as power batteries or intelligent driving chips. Yet, they are crucial for ensuring electric vehicles (EVs) operate efficiently, safely, and sustainably over the long haul.

It is in this niche that Anhui Xinfu New Energy Technology Co., Ltd. (hereinafter referred to as "Xinfu Technology"), a nationally recognized specialized, refined, and innovative "Little Giant" enterprise, has carved out its niche. The company is currently navigating the registration phase for its Initial Public Offering (IPO) on the Beijing Stock Exchange.

Over the past three years, riding the wave of the new energy sector's growth, Xinfu Technology's revenue has soared from RMB 600 million to RMB 1.569 billion, with net profit attributable to the parent company surpassing RMB 110 million.

However, the registration draft of the prospectus also unveils that net profit is projected to decline by nearly 30% in the first three quarters of 2026, over 50% of revenue is dependent on a single client, and the company's capital chain remains under persistent pressure. These multifaceted challenges paint a more realistic and formidable picture of survival.

1. Liquid Cooling "Little Giant" Encounters Registration Hurdles, with Over 50% Revenue Tied to a Single Client

Founded in 2015 and controlled by Pan Yixin, Xinfu Technology specializes in thermal management components for NEVs, with a product portfolio encompassing battery liquid cooling pipes, battery liquid cooling plates, electronic control system radiators, and precision alloy wires.

From a revenue structure perspective, after 2024, the combined revenue from the company's core thermal management products for NEVs consistently exceeded 80%. Among these, battery liquid cooling pipes and battery liquid cooling plates are the mainstays. From 2023 to the first half of 2026, the revenue share of battery liquid cooling pipes ranged between 36% and 56%, while battery liquid cooling plates accounted for between 22% and 35%. The revenue share of electronic control system radiators rapidly increased from just 0.84% in 2023 to 18.35% in the first half of 2026.

It is evident that Xinfu Technology is not a broad-based, multi-category component manufacturer but rather a thermal management component supplier deeply focused on the liquid cooling segment for NEVs.

Xinfu Technology's revenue growth has been rapid, increasing from RMB 600 million in 2023 to RMB 1.569 billion in 2025, with a compound annual growth rate of 61.70%. In 2025, the company's net profit attributable to the parent company reached RMB 110 million, surpassing the RMB 100 million mark for the first time.

Behind Xinfu Technology's high-growth performance lies a highly concentrated customer base.

Based on calculations from the company's prospectus and responses to inquiries, Xinfu Technology's market share in battery liquid cooling pipes/plates was 8.34% in 2024, while its market share in electronic control system radiators was 1.89%. Despite these relatively low market shares, the company's revenue is highly dependent on a few major players.

From 2023 to the first half of 2026 (hereinafter referred to as the "reporting period"), sales to Xinfu Technology's top five customers accounted for 84.84%, 90.08%, 88.93%, and 87.11% of total revenue, respectively, never falling below 84%. Among these, the largest customer, referred to as "Company T" in the prospectus, is widely believed to be Tesla, based on information disclosed in response to inquiries regarding customer vehicle models and sales volumes.

During the reporting period, revenue contributed by Company T accounted for 59.71%, 58.74%, 56.45%, and 50.97% of Xinfu Technology's total revenue, respectively, still representing half of the total as of the first half of 2026.

As of October 31, 2025, out of Xinfu Technology's RMB 751 million in backlog orders, Company T alone accounted for RMB 665 million, representing a staggering 88.55%.

Xinfu Technology stated that it began collaborating with Company T shortly after its establishment, continuously expanding the range of products supplied. Starting from early battery liquid cooling pipes, the collaboration extended to electronic control system radiators and energy storage liquid cooling products, all of which are now supplied in bulk. To deepen cooperation and align with Company T's global deployment, Xinfu Technology established a Mexican subsidiary, primarily supplying products to Company T's North American factories.

Additionally, Xinfu Technology's other well-known customers include CATL, Sunwoda, BYD Auto, Leapmotor, NIO, and XPeng Motors.

Despite the operational crises faced by WM Motor, HiPhi, and Neta, their names still appear in the customer case studies on Xinfu Technology's official website.

(Image / Xinfu Technology's official website)

Xinfu Technology primarily supplies battery liquid cooling pipes, toll processing services, and electronic control system radiators to Company T, while supplying battery liquid cooling plates to CATL. In the first half of 2026, Company T and CATL jointly contributed 78.35% of Xinfu Technology's total sales revenue.

Deep integration with top-tier customers has driven revenue growth for the company in stages. However, under the high customer concentration model, the company's operational rhythm is deeply tied to its customers' product planning. According to the prospectus, fluctuations in the average selling price of Xinfu Technology's products are closely linked to structural adjustments in its core customers' product lineups.

While stable customer cooperation is an advantage, it also comes with corresponding constraints. Xinfu Technology must continuously address potential risks: if sales of core customers' vehicle models fall short of expectations, or if customers introduce alternative suppliers or adjust their procurement strategies, the company's operational foundation may come under pressure.

2. Performance Decline in the First Half of the Year, with RMB 400 Million Raised for Expansion Amid Digestion Risks

If customer concentration represents a long-term hidden risk, then the performance decline in 2026 marks a concentrated outbreak of short-term risks.

In the first half of 2026, Xinfu Technology achieved RMB 767 million in revenue, down 3.67% year-on-year; net profit attributable to the parent company was RMB 40.7762 million, a sharp decline of 37.44% year-on-year, with the profit decline significantly outpacing the revenue decline.

For the first nine months of 2026, the company expects net profit attributable to the parent company to decline by 25.92% to 28.18%, with revenue remaining largely flat.

In the short term, the impact stems from exchange rates. During the reporting period, the proportion of the company's overseas revenue was 57.94%, 59.27%, 52.79%, and 47.92%, respectively, falling below 50% in the first half of 2026. The United States was the largest overseas market, contributing over 90% of overseas revenue in 2025.

The performance pressure faced by Xinfu Technology in the first nine months of 2026 was influenced by the decline in the USD-CNY exchange rate: the converted value of foreign currency revenue decreased, eroding gross margins. Simultaneously, revaluation of foreign currency receivables and foreign exchange settlement resulted in a significant year-on-year increase in net foreign exchange losses.

In the long term, the impact stems from heavy asset expansion.

The new energy component industry is highly sensitive to balancing "yield" and "scale." In 2024, when developing a new liquid cooling plate product for a major customer, Xinfu Technology experienced a high defect rate during initial production, causing the gross margin to plummet to -14.01%.

In the first half of 2026, following the expansion of the electronic control system radiator production line, depreciation expenses rose while sales volume failed to increase proportionally. Combined with rising material costs, the gross margin for this business segment declined by 9.15 percentage points year-on-year to 9.32%, dragging down overall profitability.

Against this backdrop, Xinfu Technology still chose to raise funds for expansion. In the first half of 2026, the capacity utilization rate for one of the company's core businesses, liquid cooling pipes, had already declined to 85.44%. Affected by adjustments in major supply regions, the company still plans to raise RMB 409 million to add production capacity.

Compared to existing capacity in 2025, Xinfu Technology aims to increase battery liquid cooling pipe production by 2.64 million units/year (a 17.81% increase), battery liquid cooling plate production by 3.672 million units/year (a 46.28% increase, representing a more aggressive expansion), and electronic control system radiator production by 2.676 million units/year.

(Image / Xinfu Technology's official website)

Based on Xinfu Technology's first-half 2026 financial data, the company's capacity digestion shows significant structural differentiation: battery liquid cooling pipe revenue and gross margins declined simultaneously due to the discontinuation of certain vehicle models and model transition periods for Company T, leading to a drop in capacity utilization and revealing short-term digestion pressures. In contrast, battery liquid cooling plate demand remained robust, supported by CATL's requirements.

The digestion of the new capacity funded by Xinfu Technology's IPO is highly dependent on the product iteration schedules of its two major core customers. If the downstream model transition cycles lengthen or subsequent customer procurement volumes fall short of expectations, combined with the current landscape of diverging product line prospects, the new capacity may face underutilization risks.

Xinfu Technology also openly acknowledged in its risk disclosure section that capacity expansion places higher demands on the company's market development capabilities.

3. Why Has Liquidity Tightened Despite a Declining Debt Ratio?

The balance sheet also conceals one of Xinfu Technology's most delicate sets of data.

On the surface, the asset-liability ratio decreased from 81.29% at the end of 2023 to 74.97% at the end of June 2026, suggesting deleveraging.

However, Xinfu Technology's prospectus reveals that the decline in the debt ratio was primarily due to the company completing private placements and receiving equity financing in 2023 and 2024, as well as increasing long-term borrowing. From the end of 2023 to the end of 2025, the company's total liabilities increased from RMB 837 million to RMB 1.643 billion, further rising to RMB 1.762 billion by the end of June 2026. Equity expansion (driven by two private placements and retained earnings) was the main reason for the denominator's growth.

While Xinfu Technology's total debt has not decreased, its maturity profile has shortened: long-term borrowing fell to RMB 243 million by the end of June 2026, while short-term borrowing rose to RMB 520 million, and non-current liabilities due within one year increased to RMB 179 million. Short-term interest-bearing debt totaled RMB 699 million, accounting for 51.0% of current liabilities, up from 44.3% at the end of 2025.

In the first half of 2026, Xinfu Technology had RMB 375 million in available cash, covering only about 54% of its RMB 699 million in short-term debt. The shortfall would need to be filled by rolling over approximately RMB 710 million in bank credit lines.

As of the end of June 2026, the company's accounts receivable, inventory, and bills receivable balances had declined to RMB 318 million, RMB 239 million, and RMB 67 million, respectively, compared to the end of 2025. Bills receivable saw the largest decline of 33.45%, primarily due to increased endorsement payments and discounting.

However, Xinfu Technology's operational efficiency did not improve despite the decline in balances: the accounts receivable turnover ratio fell from 5.83 times in 2024 to 4.50 times in the first half of 2026, while the inventory turnover ratio dropped from 7.17 times in 2024 to 4.61 times in the first half of 2026, declining for two consecutive years. The company's liquidity pressure has shifted from operational accounts to debt maturity itself.

Xinfu Technology's operating cash flow has also been unstable, totaling -RMB 9.17 million for the full year of 2025. The company attributed this primarily to changes in settlement methods with certain customers, resulting in a higher proportion of receivables collected in the form of bills receivable, as well as a significant increase in unreceived value-added tax input credits and export tax rebates.

Although operating cash flow rebounded to RMB 188 million in the first half of 2026, the stability and sustainability of cash flow remain to be verified.

Additionally, Xinfu Technology's Mexican subsidiary incurred losses of RMB 5.4618 million in 2025 and RMB 1.8187 million in the first half of 2026. The company has provided joint liability guarantees for the subsidiary's borrowings, and the profitability of overseas projects remains uncertain.

The funds raised from Xinfu Technology's IPO will not improve its capital chain situation, as all proceeds will be used for expansion projects without supplementing working capital. The company had previously planned to raise RMB 54 million to replenish liquidity but canceled this plan following inquiries from the Beijing Stock Exchange.

Thus, for Xinfu Technology, successfully clearing the registration obstacle merely provides it with an “entry pass” to the capital market, but this is far from sufficient to obtain a “visa” that can mitigate its liquidity risks.

What the market genuinely needs to keep a close eye on is whether Xinfu Technology can discover a second growth trajectory by leveraging technological advancements, all while operating within the limitations set by industry behemoths. Additionally, the market is interested in when its Mexican factory will start generating profits and how its capacity to repay short-term debts will be enhanced.

The true test of resilience for this “Little Giant” will commence only when the listing gong is struck.

*Note: The prominent image featured in this article is sourced from the official website of Xinfu Technology. All other images without explicit attribution are from Shetuwang and are used in compliance with the VRF protocol.