Author | Yang Licheng

Editor | Pan Yan

Three years later, Suzhou Green Control Transmission Technology Co., Ltd. (abbreviated as: Green Control Transmission) has launched a second attempt to raise funds in the A-share market, this time aiming for the ChiNext board, with plans to raise RMB 1.58 billion.

After its setback on the Sci-Tech Innovation Board in 2022, Green Control Transmission managed to turn things around by leveraging its performance, but it faced a barrage of regulatory inquiries. Key concerns—including customer lock-in, cash flow, and capacity—still need to be addressed.

Entering the critical review stage

On December 16, 2025, Green Control Transmission submitted its IPO application to the Shenzhen Stock Exchange’s ChiNext board, planning to raise RMB 1.58 billion. This is an increase of nearly 50% compared with the RMB 1.072 billion it targeted during its 2022 attempt on the Sci-Tech Innovation Board. The sponsor remains CICC.

On January 1, 2026, Green Control Transmission entered the inquiry stage. On March 12, it disclosed its first round of responses to the inquiries, and on March 23 it updated its prospectus. The review has entered a critical stage.

Looking back, in December 2022 Green Control Transmission first attempted to get listed on the Sci-Tech Innovation Board. It withdrew its application on its own after only two months, when it was still loss-making.

This time, its comeback is mainly driven by its “glorious turnaround” in performance. In 2024, revenue increased year over year by 72.33% to RMB 1.328 billion, and the parent-attributable net profit surged year over year by 489.52% to RMB 48.0427 million. In 2025, it maintained its growth momentum: full-year revenue rose year over year by 152% to RMB 3.354 billion, and parent-attributable net profit increased year over year by 218.80% to RMB 153 million.

However, regulators’ follow-up at the IPO gate directly targets core pain points. The Shenzhen Stock Exchange raised questions across 12 categories, covering business models, historical development, related-party transactions, revenue growth, accounts receivable, inventory, cash flow, and more. It focused on concerns such as the arrangements of employee stock ownership platforms’ interests, the reasonableness of the sudden spike in revenue, abnormal gross margin, high customer concentration, the divergence between cash flow and profit, and whether the production capacity of the fund-raising projects can be absorbed.

As of March 23, Green Control Transmission is still waiting for review and approval, and the outcome remains uncertain.

Green Control Transmission’s performance growth looks impressive, but it is actually surrounded by controversy.

The company reduced the accrual ratio for quality assurance deposits from 6% to 4%. As a result, in 2024 and the first half of 2025, it increased net profit by RMB 20.0665 million and RMB 19.3374 million, respectively. The proportions of these increases relative to net profit for the period were as high as 41.77% and 28.31%. Although the company claims that the proportion of actual maintenance and warranty costs has continued to decline, the timing of the accounting policy change coincided with the IPO critical period, and regulators have questioned its reasonableness.

Historical losses have not yet been fully covered

A step-change in gross margin has also attracted attention. From 2022 to the first half of 2025, Green Control Transmission’s gross margin jumped from 7.13% to 19.38%. The gross margin of its electric-drive system rose from 4.82% to 18.98%, shifting from below the industry peers’ average to far ahead.

Green Control Transmission attributes this to lower raw material prices and scale effects. However, whether the difference can fully explain the gap in light of differences in business mix versus peers—specifically, the company is mainly focused on commercial vehicles, while comparable companies are mainly focused on passenger vehicles—still needs verification.

More importantly, the “quality” of profitability is insufficient.

Green Control Transmission’s operating cash flow has been negative for multiple periods. From 2022 to 2025, it was -RMB 297 million, -RMB 185 million, -RMB 175 million, and only in 2023 did it turn slightly positive.

Accounts receivable and inventory have continued to grow rapidly. By the end of June 2025, they reached RMB 833 million and RMB 613 million, respectively, indicating significant pressure from funds being tied up. By the end of 2025, undistributed profits remained negative at -RMB 118 million, meaning historical losses have not yet been fully covered.

As a leading enterprise in electric-drive systems for new-energy commercial vehicles, Green Control Transmission’s core value stands out. Technologically, the company has five core technologies. For its mass-produced products, the HTEDX22000 series’ rated power density reaches 0.72 kW/kg, with maximum efficiency exceeding 94.5%, achieving the targets of its technology roadmap in advance.

In terms of market position, from 2023 to 2025, its new-energy heavy-truck motors supporting market share ranked No. 1 for three consecutive years. In 2025, its installed volume was 44,000 units, with a market share of 19.2%, leading the industry.

The industry is currently in a phase of rapid development. Driven by the dual-carbon policy, the penetration rate of new-energy commercial vehicles is increasing rapidly. In 2024, sales reached 607.3 thousand vehicles, up 71.42% year over year, with a penetration rate of 19.45%.

Sales of new-energy heavy-duty trucks increased 140% year over year, with a penetration rate of 13.61%. The electrification of off-road mobile machinery has just begun, becoming a new growth blue ocean.

“Industry + Capital” synergy

Market opportunities are clearly visible. With industry tailwinds and sector dividends, Green Control Transmission can fully benefit from demand growth brought by rising penetration rates. Major customers are tightly bound, and the company has established deep cooperation with entities including Sany Group, Xugong Group, and Dongfeng Motor. Indirect equity holdings among customers form an “industry + capital” synergy, helping to ensure stable orders.

Capacity provides support. In the first half of 2025, capacity utilization rate was 120.2%, operating at full load. The fund-raising project adds 100,000 units of capacity, which can support future growth.

Despite the industry and performance looking bright, Green Control Transmission still faces multiple risks. Controversy around customers and related-party transactions is prominent. The revenue contribution from the top five customers has continued to exceed 59%. In 2024, the combined share of Sany and Xugong exceeded 40%, and they are indirect shareholders. After their investment, the company’s sales to them increased explosively. Regulators have questioned the related-party relationship and the fairness of the transactions. Although the company states it is not a related party and there is no transfer of benefits, outside skepticism remains.

The risk of capacity absorption cannot be ignored either. From 2022 to the first half of 2025, the company’s production-to-sales ratio fell from 98.17% to 84.5%. The proportion of revenue from the consignment model rose to 71.66%, and delayed revenue recognition led to a high increase in inventory. With a plan to expand capacity by RMB 1.38 billion and add 100,000 units of capacity, whether it can be smoothly absorbed remains in doubt.

Financial and funding pressure is also relatively large. As of the end of 2025, cash and cash equivalents were RMB 276 million, which is still insufficient to cover short-term borrowings of RMB 790 million, non-current liabilities due within one year of RMB 137 million, and long-term borrowings of RMB 50 million. The gap in short-term debt is evident.

Meanwhile, Green Control Transmission’s asset-liability ratio increased further to 79.78%, higher than the industry peers’ average. Combined with cash flow that continues to be negative, funding-chain pressure is substantial.

Research and compliance shortcomings also need attention. From 2022 to 2025, Green Control Transmission’s R&D expense ratio fell from 7.77% to 3.59%, below the industry peers’ average of 5.98%. The proportion of R&D personnel dropped from 30.38% to 14.82%, indicating weakening momentum for technological iteration.

In addition, historical issues such as retrospective adjustments to net assets from the shareholding reform, and employee stock ownership held by non-issuing employees through an employee stock ownership platform, also increase compliance risks.

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