Aisidi: Highly concentrated customer base, cash-strapped yet paying dividends, removes working capital replenishment project just before listing review | IPO Watch

On August 6, Aisidi Industrial Technology Co., Ltd. (hereinafter referred to as “Aisidi”) will undergo its Beijing Stock Exchange IPO listing review, offering no more than 17 million shares to the public.

The author notes that during the reporting period, Aisidi’s revenue and net profit continued to grow, but operating cash flow steadily declined, the cash conversion ratio of net profit decreased year after year, and gross margin kept falling. The company’s customer base is highly concentrated, with its top five customers accounting for nearly 80% of total revenue, and its largest customer, Great Wall Motor, contributing over 40% of revenue. From a financial perspective, the company’s cash and cash equivalents are insufficient to cover short-term borrowings, and both its current ratio and quick ratio fall below industry peers, indicating significant debt pressure. Despite this tight liquidity situation, the company has consistently paid large cash dividends. Initially, it planned to allocate RMB 30 million of the proceeds to replenish working capital, but removed this item at the final stage before the listing review, raising numerous market concerns about the necessity and reasonableness of its fundraising plans.

Aisidi primarily engages in the research and development, production, and sales of aluminum alloy components for automotive lightweighting. Its main products include key precision aluminum alloy components for electric drive systems, electronic control systems, powertrain systems, transmission systems, thermal management systems, body systems, and chassis systems used in both new energy vehicles (NEVs) and traditional internal combustion engine (ICE) vehicles. These products are widely applied across NEVs, ICE vehicles, off-road vehicles, and other industries.

During the reporting period (2023–2025), Aisidi generated revenues of RMB 5,668.32 million, RMB 7,392.85 million, and RMB 8,275.747 million, respectively, with net profits of RMB 435.56 million, RMB 554.008 million, and RMB 638.592 million, demonstrating sustained growth in performance.

The author notes that although Aisidi’s financial performance appears strong, its earnings quality has continued to deteriorate. During the reporting period, the company’s net cash flow from operating activities amounted to RMB 509.276 million, RMB 430.833 million, and RMB 249.869 million, respectively. When compared with net profit for the same periods, the resulting ratios were 1.17, 0.78, and 0.39—showing a consistent decline, with ratios falling below 1 in the past two years.

Meanwhile, the company’s product competitiveness has somewhat weakened. Gross margins during the reporting period were 22.16%, 19.18%, and 17.82%, respectively, reflecting a continuous downward trend. By 2025, the gross margin had declined by 4.34 percentage points compared to 2023.

In this regard, Aisidi stated that if significant changes occur in future market competition, raw material procurement prices, the company’s operational scale, product mix, or customer base—or if intensified industry competition leads to lower selling prices and higher costs—and if the company fails to meet expectations in new product development or cost optimization, its gross margin could face further declines.

Additionally, the author observes that Aisidi’s revenue is heavily reliant on its top five customers. During the reporting period, sales to these top five customers amounted to RMB 4,869.807 million, RMB 5,808.025 million, and RMB 6,463.508 million, representing 85.91%, 78.56%, and 78.10% of total operating revenue, respectively. Notably, sales to its largest customer, Great Wall Motor, reached RMB 2,020.24 million, RMB 2,641.799 million, and RMB 3,417.225 million, accounting for 35.64%, 35.73%, and 41.29% of total revenue, respectively. This indicates that Aisidi derives at least 70% of its annual revenue from its top five customers and over 30% specifically from Great Wall Motor, reflecting a highly concentrated customer structure.

Regarding this, Aisidi stated that if its major customers experience significant adverse changes in their own operations, if the company fails to continuously meet supplier evaluation criteria set by key customers, or if it cannot maintain its competitive advantages in quality or pricing—leading customers to switch suppliers or choose competing products—or if any other event negatively impacts cooperation with key customers, the company’s future revenue and performance would be materially and adversely affected.

Aisidi’s IPO application was accepted by the Beijing Stock Exchange in December 2025. At that time, the company intended to raise RMB 240 million, allocated toward expanding capacity for lightweight automotive components and upgrading intelligent manufacturing capabilities, as well as supplementing working capital, as detailed below:

Notably, the rationale for allocating RMB 30 million to supplement working capital warrants scrutiny. As of the end of 2023, 2024, and 2025, Aisidi’s cash and cash equivalents stood at RMB 355.649 million, RMB 331.757 million, and RMB 240.241 million, respectively, while short-term borrowings were RMB 0 million, RMB 200 million, and RMB 530 million. Currently, the company’s cash reserves are insufficient to cover its short-term debt obligations, indicating significant liquidity pressure.

In terms of debt, as of the end of each reporting period, Aisidi's current ratios were 1.64, 1.61, and 1.48, respectively, compared to peer average ratios of 2.49, 2.80, and 2.43. Its quick ratios were 1.14, 1.18, and 1.03, respectively, versus peer averages of 1.87, 2.19, and 1.81. Both the current and quick ratios for Aisidi were significantly below peer averages, indicating relatively weak short-term debt repayment capacity. Meanwhile, during the same periods, Aisidi’s asset-liability ratios stood at 43.32%, 42.37%, and 40.40%, respectively, all notably higher than the peer averages of 34.15%, 35.49%, and 35.60%, reflecting considerable debt pressure.

Despite significant pressure on its cash flow and debt obligations, Aisidi has continued to distribute cash dividends consistently. During the reporting periods, the company paid cash dividends of RMB 10.2 million each year, totaling RMB 30.6 million—sufficient to fully cover the RMB 30 million previously earmarked for supplemental working capital. Against a backdrop of tight liquidity and high debt burdens, Aisidi’s decision to maintain substantial cash dividend payouts—and then subsequently seek large-scale fundraising to replenish working capital—raises serious questions about the rationale and necessity of these actions, which the company urgently needs to clarify.

It should be noted that in Aisidi’s most recently disclosed submission draft for listing review, the company intends to raise RMB 210 million for a project focused on expanding capacity for lightweight automotive components and upgrading intelligent manufacturing capabilities. The previously proposed RMB 30 million working capital supplement has been removed, with details as follows:

On one hand, Aisidi faces evident cash flow strain and substantial debt pressure; on the other, it removed the RMB 30 million working capital supplement just before its listing review—a contradictory adjustment to its fundraising plan that has sparked market debate and demands further clarification from the company. (By Company Watch, Author: Deng Haotian, Editor: Cao Shengyuan)

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