Ligo New Energy's second IPO: performance growth and continuous "bleeding" of cash flow, fundraising amount increased by 1.2 billion yuan in two years

Source: Consumer Daily Finance

Consumer Daily News (Reporter Liu Jintao) On March 27, LiGao New Energy Technology Co., Ltd. (hereinafter referred to as “LiGao New Energy”)'s IPO application on the Growth Enterprise Market was accepted by the Shenzhen Stock Exchange. This is its second attempt after a year and a half.

In June 2023, LiGao New Energy’s initial application for a GEM IPO was accepted, but after two rounds of inquiry, it voluntarily withdrew the application in August 2024.

As a leading enterprise in China’s third-party BMS (Battery Management System) field, LiGao New Energy is returning with a “larger fundraising” scale. Compared to the 735 million yuan raised during its last IPO, this time it plans to raise 1.93B yuan, an increase of 1.2 billion yuan.

According to the prospectus, during the reporting period, LiGao New Energy achieved rapid growth in performance, but also faced high risks. Its operating cash flow remained negative, and its gross profit margin plummeted by 15 percentage points over two years; additionally, before submitting the application, the company used “floor prices” to incentivize executives, raising suspicions of利益输送 (benefit transfer).

1

Performance Soars, Cash Flow Continues to “Bleed”

The prospectus shows that LiGao New Energy is a domestic BMS industry leader, focusing long-term on independent R&D, production, sales, and service of BMS modules. Based on the BMS module business, it has gradually expanded into high-voltage power distribution modules and other new energy management control system products, as well as PCBA components, wiring harnesses, and electronic electrical integrated application solutions.

As the largest third-party BMS provider in China, LiGao New Energy’s industry position is relatively stable. According to NE Times statistics, by 2025, the company’s installed capacity in China’s new energy passenger vehicle BMS market will rank third, behind BYD and CATL, and first among third-party manufacturers, with a market share rising to 15.5%. Its products have entered the supply chains of leading companies such as Geely Auto, SAIC Motor, CATL, and Guoxuan High-tech.

The prospectus shows that from 2022 to the first three quarters of 2025 (within the reporting period), the company’s operating income surged from 559 million yuan to 1.92B yuan, with a compound annual growth rate of 70.85%. Meanwhile, the net profit attributable to the parent also increased from 90.68 million yuan in 2022 to 212 million yuan in the first three quarters of 2025.

However, in stark contrast to the rapid growth in revenue and net profit, LiGao New Energy’s net cash flow from operating activities remained negative, with the gap sharply widening in the first three quarters of 2025, showing a serious divergence between cash flow and performance.

The prospectus shows that during the reporting period, the company’s net cash flow from operating activities was -45.7552 million yuan, -82.6494 million yuan, -1.6712 million yuan, and -271 million yuan, respectively. This indicates that despite the company’s strong profitability on paper, its actual operating activities are continuously “bleeding.”

This abnormal phenomenon of “increased revenue but decreased cash” mainly stems from a significant rise in accounts receivable. At the end of each period, the company’s accounts receivable balance jumped from 363 million yuan in 2022 to 1.22B yuan by the end of September 2025, more than doubling over two years.

LiGao shares stated in risk warnings that if the credit or operational status of the company’s debtor customers changes in the future, there may be a risk that some receivables cannot be collected in a timely manner, which could affect the company’s operating cash inflows and have an adverse impact on operations.

It is worth noting that the proportion of accounts receivable to operating income has remained high at around 60%, reaching as high as 70.82% in 2023. Additionally, the accounts receivable turnover rate has decreased from 2.27 times in 2022 to 1.75 times in 2025, far below the industry average of 3.02 times. This means the company’s collection cycle is lengthening, and a large amount of capital is being occupied by customers. This high-growth model based on “book wealth” raises questions about the quality and sustainability of its profitability.

2

Gross Profit Margin Drops 15 Percentage Points in Two Years

If cash flow issues reflect operational quality, then the continuous decline in gross profit margin directly impacts the company’s core profitability.

The prospectus shows that LiGao New Energy’s main business gross profit margin declined from 44.89% in 2022 to 29.87% in the first nine months of 2025, a drop of over 15 percentage points in just over two years, representing a decline of more than one-third.

The gross profit margin of its core product, the BMS module, is similarly not optimistic, falling from 45.35% in 2022 to 39.99% in the first nine months of 2025. The year-over-year decline from 2023 to 2024 was 7.68 percentage points, showing an accelerating downward trend.

Moreover, LiGao New Energy’s rate of decline in gross profit margin far exceeds the industry average. During the same period, comparable companies’ average gross profit margin fell from 36.58% to 31.94%, a decrease of 4.64 percentage points, while LiGao New Energy’s decline was 5.98 percentage points higher than the industry average.

As an industry leader, LiGao New Energy should have stronger bargaining power and resilience, but the actual situation is quite the opposite. The company explains that the decline in gross profit margin is mainly due to the upstream transmission of price reductions in new energy vehicles, raw material price fluctuations, and product structure adjustments. However, such a rapid decline raises doubts about its core competitiveness and pricing power.

It is also noteworthy that the company’s gross profit margin and inventory turnover rate show an “abnormal combination.” In the first nine months of 2025, LiGao New Energy’s main gross profit margin was 29.87%, slightly above the industry average of 28.76%, but its inventory turnover rate was only 2.64 times, far below the industry average of 4.09 times; its accounts receivable turnover rate was only 1.75 times, less than 60% of the industry average of 3.02 times.

Industry insiders pointed out that generally, companies with higher gross profit margins tend to have stronger product competitiveness, and their inventory turnover and collection speeds should be better than industry averages. The “high gross profit, low turnover” pattern presented by LiGao New Energy suggests that its high gross profit may not stem from product competitiveness but more likely from accounting tricks or revenue recognition techniques, raising doubts about its authenticity.

Additionally, LiGao New Energy faces a high customer concentration issue. During the reporting period, sales to the top five customers consistently accounted for over 80% of revenue, with a dependence on a single customer, Guoxuan High-tech, reaching 46.53% in 2023, approaching the regulatory red line of 50%.

High dependence on a single customer ensures revenue stability but also significantly weakens the company’s bargaining power and risk resistance. If key customers encounter operational difficulties or switch suppliers, it could be a fatal blow to the company.

3

“Floor Price” Incentivizes Executives with Low-Price Stock Options

Half a year before submitting the IPO application, LiGao New Energy’s equity incentive operation triggered widespread suspicion. In September 2025, the company granted stock options to Vice Chairman and General Manager Liu Yong, who received 3 million shares at a price of 1 yuan per share, accounting for 0.82% of the company.

This price is vastly different from previous external financing prices. In December 2022, Wanhua Battery’s capital increase price was as high as 50.41 yuan per share; in October 2022, Sinopec Capital’s capital increase price was 44.26 yuan per share. In other words, in just over two years, the incentive price was only about one-fiftieth of the external financing price, raising questions about the fairness of the valuation.

This kind of low-price, pre-IPO stock incentive is widely regarded as a disguised form of利益输送 (benefit transfer). It not only dilutes existing shareholders’ equity but also exposes significant flaws in corporate governance.

Furthermore, several suppliers of LiGao New Energy show abnormal social security payment figures. The prospectus shows that in 2022, the company’s second-largest new supplier, Anya Semiconductor (Suzhou) Co., Ltd., had only one person paying social security, yet LiGao New Energy purchased goods from it worth 40.02 million yuan that year.

This supplier was established in November 2021 and began supplying LiGao New Energy in the following month. It quickly became the second-largest supplier the next year. Its related company, Suzhou Xingkaiheng, had zero social security payers in its founding year. Such a mismatch between supplier scale and purchase amount raises doubts about the authenticity of transactions and whether related parties are involved.

4

IPO Fundraising Grows by 1.2 Billion Yuan, but Capacity Declines

LiGao New Energy faces greater challenges from profound industry changes. As one of the core technologies of new energy vehicles, BMS is increasingly developed in-house by automakers and battery manufacturers to control costs and optimize hardware-software integration.

According to GGII data, the market share of third-party BMS manufacturers shrank rapidly from 31% in 2020 to 22% in 2022, showing a yearly decline. In 2022, among China’s top 10 lithium battery BMS companies, the top three—BYD, CATL, and Tesla—are all battery or vehicle manufacturers, with a combined market share of 52.3%.

In the context of intensified industry competition, LiGao New Energy’s capacity utilization rate has also faced bottlenecks. During the reporting period, the utilization rate of its BMS modules improved but remained relatively low, around 60% since 2023, and further dropped to 59.66% in the first nine months of 2025.

The prospectus shows that LiGao New Energy plans to raise 1.93B yuan in this IPO, with a significant portion allocated to capacity expansion. Given the capacity utilization rate below 60%, there are doubts about the company’s ability to absorb the new capacity, raising questions about the reasonableness of the fundraising projects.