Xinfu Technology: Removed After "Two Consecutive Questions" on Fundraising for Working Capital; Expansion Project Equipment Purchase Quantities Stage Information Disclosure Concerns

AI Soldering Process Recognized as Core by Industry Peers, Why Does Xinfu Technology Outsource?

“Jinzhengyan” Southern Capital Center Xiang Ning BR&*DL / Author Ying Wei / Risk Control

Looking back at history, Dalian Huanxin New Materials Technology Co., Ltd. (hereinafter “Dalian Huanxin”) was listed on the New Third Board from 2016 to 2019. After delisting, Dalian Huanxin’s then controlling shareholder, Anhui Huanxin Group Co., Ltd. (hereinafter “Huanxin Group”), planned to withdraw its application after listing on the New Third Board in 2021. The following year, Anhui Xinfu New Energy Technology Co., Ltd. (hereinafter “Xinfu Technology”) acquired Dalian Huanxin and became independent from Huanxin Group, then launched a bid to the Beijing Stock Exchange.

In this listing application, Xinfu Technology’s R&D investment ratio has decreased year by year, and more than ten key technology-related invention patent applications have been rejected for lack of inventiveness. The first round of inquiry responses disclosed that Xinfu Technology outsourced some non-core processes to external suppliers, yet also claimed that these suppliers mainly handled soldering, stamping, and other processes. Notably, Xinfu Technology’s core production processes include forming and welding, with soldering being a type of welding method, and industry peers recognize soldering as one of the core processes. When asked whether Xinfu Technology is outsourcing to evade environmental regulations, its environmental impact report disclosed that soldering produces hazardous waste and pollutants. Moreover, the fundraising “supplementary flow” project was removed after two rounds of questions, and some equipment planned for purchase in the expansion project may not align with environmental assessments or disclosures.

1. R&D Investment Ratio Declining Year by Year, Over Ten Key Technology Patent Applications Rejected for Lack of Inventiveness

As of September 8, 2025, over 90% of listed companies on the Beijing Stock Exchange are high-tech enterprises, and 80% are technology-based enterprises.

In this application to the Beijing Stock Exchange, Xinfu Technology’s R&D investment ratio has been declining annually, falling below industry peers by 2024. During the NEEQ listing process, Xinfu Technology disclosed 28 invention patents and applications related to its main technologies. As of March 18, 2026, 12 of these invention patent applications had been rejected for lack of inventiveness.

1.1 R&D Investment Ratio Decreased Annually from 2022 to 2024, Falling Below Industry Average by 2024

According to the prospectus signed by Xinfu Technology on January 26, 2026 (“January 26, 2026 Prospectus”), the R&D investment ratios for 2022-2024 and the first half of 2025 were 6.45%, 5.98%, 3.46%, and 3.39%, respectively.

Meanwhile, the average R&D investment ratios of comparable companies in the same industry were 4.88%, 5.12%, 4.49%, and 3.18% for the same periods.

It is evident that during 2022-2024 and the first half of 2025, Xinfu Technology’s R&D investment ratio declined annually, and in 2024, it was below the industry average.

Furthermore, the core technology patents related to Xinfu Technology’s main technologies have been rejected.

1.2 Of the 28 invention patents and applications disclosed during the NEEQ listing, 12 had been rejected for lack of inventiveness as of March 18, 2026

According to the January 26, 2026 Prospectus, as of January 26, 2026, Xinfu Technology had 17 core technology projects. The relationship between core technologies and patents shows that nine core technologies are protected by patents.

Additionally, as of January 16, 2023, Xinfu Technology disclosed in a public transfer document that it had 7 main technologies with patent protection, totaling 28 invention patents and patent applications.

It is worth noting that the seven main technologies disclosed in the January 16, 2023 document are all part of the core technologies disclosed in the January 26, 2026 Prospectus.

However, according to the State Intellectual Property Office, as of March 18, 2026, 12 of the 28 invention patents and applications related to the main technologies disclosed in the January 16, 2023 document have been rejected or invalidated for lack of inventiveness under Article 22, Paragraph 3 of the Patent Law.

This indicates that during the reporting period, Xinfu Technology’s R&D investment ratio has been decreasing annually, falling below industry averages by 2024. Meanwhile, 12 invention patent applications related to main technologies disclosed during the NEEQ listing have been rejected for lack of inventiveness.

2. Inquiry Response Reveals Outsourcing of Some Non-Core Processes, Yet Industry Peers Recognize Soldering as a Core Process

Soldering technology is widely used in home appliances, electronics, information, and energy industries. However, traditional solder materials contain toxic substances like lead, cadmium, and halogens, which can cause serious environmental pollution during manufacturing and use.

In the first round of inquiry responses, Xinfu Technology stated that it focuses on core technologies and processes, outsourcing some non-core processes. It also disclosed that its largest external supplier in 2022 handles soldering, which is one of the main processes outsourced. This is confusing because industry peers recognize soldering as a core process, and environmental impact reports show that soldering furnaces produce waste gases and hazardous solid waste.

2.1 Outsourcing Some Non-Core Processes Led to a Significant Increase in Outsourcing Fees from 2024

According to Xinfu Technology’s first round inquiry response dated September 8, 2025 (“September 8, 2025 Response”), the company was asked to explain the reasons for increased outsourcing costs for various production stages.

Xinfu Technology responded that to reduce production costs and focus on core technologies and processes, it outsources some non-core processes such as stamping, spraying, CNC machining, silver plating, cutting, bending, shot blasting, drawing, and straightening.

In its second response dated December 31, 2025 (“December 31, 2025 Response”), the company disclosed that from 2022 to the first half of 2025, outsourcing procurement amounts were 2.9628 million yuan, 2.2827 million yuan, 28.1002 million yuan, and 20.5067 million yuan, respectively, accounting for 0.86%, 0.51%, 2.43%, and 3.36% of main business costs.

It is clear that outsourcing costs decreased in 2023 but rose sharply in 2024. The total outsourcing procurement during 2022-2025 was approximately 53.85 million yuan.

Xinfu Technology explained that the decrease in 2023 was mainly due to the purchase of stamping equipment at the end of 2022, reducing outsourced stamping processes. The increase in 2024 was mainly due to a significant rise in overall business volume, especially in the electric control system radiator products, which require non-core processes like silver plating that need specialized licenses, leading to a substantial increase in surface silver plating outsourcing costs.

Note that the company’s manufacturing processes include welding.

2.2 Industry Peers Recognize Soldering as a Core Process, Yet Xinfu Technology Outsources Soldering and Stamping

According to the January 26, 2026 Prospectus, comparable companies include Zhejiang Sanhua Intelligent Controls Co., Ltd., Zhejiang Yinlun Machinery Co., Ltd., Shenzhen Kexin New Materials Co., Ltd., and Nabaichuan New Energy Co., Ltd. (“Nabaichuan”).

Based on the September 8, 2025 inquiry response, Nabaichuan is highly comparable to Xinfu Technology in terms of revenue scale and product structure.

According to the listing sponsor report issued by Zheshang Securities on December 22, 2025, soldering is the core process for Nabaichuan’s battery liquid-cooled plate products, and soldering furnace equipment is a key piece of production line equipment.

The January 26, 2026 Prospectus and the September 8, 2025 inquiry response show that Xinfu Technology’s main products include battery liquid-cooled tubes, liquid-cooled plates, electronic control system radiators, and alloy wires. Its core processes include forming, welding, surface treatment, and testing.

Soldering is a welding method where a filler metal below the melting point of the workpieces is heated until the filler melts, then fills the gap to connect metals.

In this context, Xinfu Technology may outsource the soldering process.

The September 8, 2025 inquiry response disclosed the basic situation of its top five external suppliers from 2022-2024. Among them, Anhui Xiangda Light Alloy Technology Co., Ltd. (“Xiangda Alloy”) was the largest supplier in 2022, with a procurement amount of 1.2313 million yuan, accounting for 41.56% of outsourced procurement, mainly for soldering and stamping.

Furthermore, in explaining whether its main suppliers include micro and small enterprises, Xinfu Technology stated that its outsourcing suppliers mainly handle processes such as soldering, stamping, spraying, machining, and surface treatment.

It is evident that Xinfu Technology claims to outsource some non-core processes but also states that its external suppliers mainly handle soldering, stamping, spraying, machining, and surface treatment. Notably, its core processes include forming and welding, with soldering being a type of welding. Industry peer Nabaichuan states that soldering is a core process for its battery liquid-cooled plates.

It is also worth noting that soldering may produce waste gases and pollutants.

2.3 Inquiry Asked Whether Outsourcing Is Used to Evade Environmental Regulations; Environmental Impact Report Discloses Soldering Produces Hazardous Waste and Pollutants

The September 8, 2025 inquiry response indicated that the Beijing Stock Exchange required Xinfu Technology to analyze whether existing pollution control facilities could handle the pollutants generated, and whether outsourcing was used to evade environmental regulations.

Xinfu Technology responded that it mainly produces products through self-operated facilities, outsourcing some processes that do not involve core technologies, such as surface treatment, stamping, and machining. It denied any attempt to evade environmental regulations through outsourcing.

According to the environmental impact report for Xinfu Technology’s new energy vehicle thermal management system and key component expansion project issued on April 14, 2025, the project aims to produce 2.64 million liquid-cooled tubes, 3.672 million liquid-cooled plates, and 267,670 electronic control system radiators.

The report states that the project’s main products are consistent with Xinfu Technology’s core products.

Regarding waste management, the report notes that the fluorine-containing gases from soldering furnaces are adsorbed using alumina, with spent fluorinated alumina balls mainly composed of aluminum fluoride, classified as hazardous waste. Soldering produces small amounts of slag, also hazardous waste, which is stored temporarily before being handed over to qualified disposal units.

Additionally, natural gas combustion gases from the drying sections of soldering furnaces are directly emitted through a 15-meter-high chimney.

In summary, the environmental impact report indicates that soldering processes may generate hazardous solid waste and waste gases.

Therefore, the outsourcing of production processes in this listing, which claims to outsource non-core processes, involves soldering—a process recognized by industry peers as core. The company also states that its external suppliers mainly handle soldering and stamping. Its core processes include forming and welding, with soldering being a welding method. The environmental impact report shows that soldering furnaces and processes may produce hazardous waste and emissions.

3. Fundraising “Supplementary Flow” Removed After Two Rounds of Questions; Expansion Project Equipment Purchase Plans May Not Match Environmental Reports or Disclosures

The “Opinions on Strictly Controlling the Entry of Issuance and Listing to Improve the Quality of Listed Companies from the Source (Trial)” emphasizes guiding healthy capital development and urges companies to determine fundraising purposes and scales based on actual needs.

Xinfu Technology initially planned to raise 54 million yuan for “blood replenishment,” but after two rounds of questions, this project was removed, leaving only an expansion project. The planned equipment purchase quantities for this expansion project may also be inconsistent with disclosures.

3.1 The initial plan to raise 54 million yuan for “blood replenishment” was questioned, leading to its removal

According to the prospectus signed on June 16, 2025 (“June 16, 2025 Prospectus”), Xinfu Technology planned to raise 463 million yuan, mainly for the “Expansion of core components for new energy vehicle thermal management systems” and “Supplementary working capital.”

It planned to invest 54 million yuan in working capital.

The September 8, 2025 inquiry response asked Xinfu Technology to explain the basis and reasonableness of using part of the raised funds for working capital, considering its cash and financial status.

Xinfu Technology responded that its calculation indicated a need for 54 million yuan in additional operating funds from 2024-2026, and that this use of funds was necessary and reasonable.

In the second inquiry, the company was again asked about the reasonableness of the use of raised funds.

The December 31, 2025 response disclosed that the company’s projected working capital gap for 2025-2027 was about 57 million yuan, and it planned to raise 54 million yuan for this purpose. As of December 31, 2024, the company held cash of about 258 million yuan. The Beijing Stock Exchange then asked Xinfu Technology to explain the reasonableness and necessity of using the raised funds for working capital, considering its cash, bank financial products, and calculated working capital gap.

Xinfu Technology stated that as its main business develops, a capital gap of about 109 million yuan exists, which needs to be supplemented through financing to support business expansion. The use of funds for working capital is thus reasonable and necessary.

Notably, the disclosure date of the second inquiry letter was November 28, 2025. The following month, Xinfu Technology announced an adjustment to its listing plan, removing the working capital project.

On December 16, 2025, Xinfu Technology announced that it would revise its initial public offering plan, reducing the total raised funds from 463 million yuan to 409 million yuan, and deleting the “working capital” component.

Subsequently, the disclosed prospectus as of January 26, 2026, shows only one project: “Expansion of core components for new energy vehicle thermal management systems.”

3.2 Under the same investment amount, the first-round inquiry response disclosed fewer ultrasonic testing machines than environmental reports

The January 26, 2026 prospectus and the September 8, 2025 inquiry response show that the “Expansion of core components for new energy vehicle thermal management systems” project has an investment of 409 million yuan, project code 2405-340860-04-01-497525, with environmental approval number/record number Ankai Xing Shen Han [2025]49.

The project’s new annual capacity includes 2.64 million battery liquid-cooled tubes, 3.672 million liquid-cooled plates, and 267,600 electronic control system radiators.

The environmental impact report for the project states that the equipment purchase includes a 63 million yuan investment to build ultrasonic testing lines for battery pack energy conversion system radiators, with four ultrasonic testing machines planned.

However, the environmental impact report indicates that the BMS cooling plates (part of the electronic control system radiators) are the main products, and the total number of ultrasonic testing machines planned for purchase for the BMS cooling plate production line is six.

This suggests that, with the same investment amount, the number of ultrasonic testing machines disclosed in the inquiry response (four units) is inconsistent with the environmental report (six units).

In summary, Xinfu Technology initially planned to raise 54 million yuan for “blood replenishment,” but after two rounds of questions, this project was removed. Its remaining expansion project is the “Expansion of core components for new energy vehicle thermal management systems.” The equipment purchase plans for this project may not align with environmental disclosures.

4. Conclusion

This listing shows that Xinfu Technology’s recent R&D investment ratio has been declining annually, below industry averages by 2024. Additionally, the main technologies disclosed during its NEEQ listing, which share names with core technologies in this application to the Beijing Stock Exchange, include over ten invention patent applications that were rejected for lack of inventiveness.

When questioned about outsourcing, Xinfu Technology stated it focuses on core technologies and outsources some non-core processes. Yet, it also disclosed that it outsources soldering, which industry peers recognize as a core process. Its core processes include forming and welding, with soldering being a welding method. The environmental impact report indicates that soldering furnaces and processes may produce hazardous waste and emissions. Xinfu Technology claims it does not evade environmental regulations through outsourcing. Moreover, the initial fundraising plan of 54 million yuan for “blood replenishment” was removed after two rounds of questions, leaving only an expansion project, with some equipment purchase plans possibly inconsistent with environmental disclosures.