Changzhou Longxin Intelligent Equipment Co., Ltd. (referred to as Longxin Intelligent or the issuer) is set to have its listing review on February 11.
Information shows that Longxin Intelligent is an enterprise focused on the research and development, production, sales, and service of high-end micro-nano composite material preparation equipment and automated production lines. The company is committed to providing material handling solutions for various scenarios and applications, ranging from low to high viscosity, micron to nano-level, and wet to dry processes. Its product portfolio includes grinding equipment, drying equipment, and automated material production lines, which are applied in sectors such as new energy (e.g., lithium iron phosphate cathode materials, silicon-carbon anode materials), photovoltaics (e.g., photovoltaic electronic pastes), and coatings and inks. Its clientele includes industry-known enterprises like CATL, Hunan Yuneng, Poly Materials, and Yangzijiang Printing Ink.
However, public information indicates that this company has several issues drawing attention, such as previously being involved in a case of falsified value-added tax (VAT) special invoices, discrepancies in patent count data, loss of a major client, and concerns regarding revenue recognition.
The issue of revenue recognition has been a key focus in two rounds of inquiries from the exchange.
According to application documents and inquiry responses: during each period of the reporting period, the issuer had instances where acceptance or signing documents were only signed, acceptance was confirmed via email, or clients failed to provide acceptance proof. The proportion of revenue with flawed acceptance documentation during the reporting periods was 6.02%, 8.47%, and 17.18%, respectively. For some of the issuer's projects, there was a significant gap between the completion of installation and debugging and the final acceptance date, and acceptance forms varied for different projects with the same client.
For one project, revenue was recognized in 2023. In 2024, a supplementary agreement was signed with the issuer based on the final project settlement audit figure, altering the contract value and correspondingly reducing revenue for 2024. In 2023 and 2024, clients repaid the issuer through financial leasing amounting to 114.0426 million yuan and 33.022 million yuan, respectively.
The issuer was requested to explain the reasons for the continuous increase in the amount and proportion of revenue with flawed acceptance documentation during the reporting period, whether revenue recognition was prudent given client rectification requirements, if this aligns with industry practices, whether related project acceptances were concentrated in December, and if there was any premature revenue recognition.
Considering the main content and influencing factors of contract implementation and trial production for various products, along with internal controls related to project execution and acceptance and their effectiveness, further explanation was required regarding why there were long, cross-period gaps between installation/debugging completion and acceptance for some major projects, and whether this indicated manipulation of revenue recognition timing.
The issuer was asked to explain why acceptance forms differed for the drying equipment project and the automated material production line project for CALB Materials Technology (Sichuan) Co., Ltd. in 2024, and whether there were other instances of differing acceptance or signing forms for different projects or years with other major clients, requiring explanation and justification.
An explanation was required for the reasons behind the revenue reduction in 2024 for projects related to Daban Technology (Changxing), and whether prior revenue recognition was accurate and compliant. The issuer needed to state if there were any instances of revenue recognition based on estimates during the reporting period and, if so, provide specific basis and indicate any significant differences from actual revenue.
Details were requested regarding clients paying through financial leasing business, including client names, transaction amounts per period, related business processes, reasons for settlement method adjustments (if any), whether the issuer provided guarantees, and the basis and compliance of the revenue recognition point. The formation time and aging of accounts receivable were to be disclosed, along with clarification on whether there were any relationships between the financial leasing company and the issuer or its affiliates/key personnel, and if there was any manipulation of account aging.
The prospectus shows that Hunan Yuneng, as the issuer's largest client in 2022-2023, saw procurement amounts exceed 100 million yuan at one point. However, the cooperation encountered problems, and it can be said that the issuer has almost lost this major client.
In response to the exchange's initial inquiry regarding "reasons for significant sales decline to some clients during the reporting period and whether they were replaced by competitors," Longxin Intelligent indirectly revealed the reason for the sharp drop in revenue from Hunan Yuneng. The products supplied to Hunan Yuneng were primarily for the drying stage. From 2022 to 2023, Hunan Yuneng procured large drying stage equipment from Longxin Intelligent, and its subsidiaries Yunnan Yuneng and Guizhou Yuneng also primarily sourced from Longxin Intelligent. However, in 2024, due to a failure to reach agreement on sales prices and calculation policies, Hunan Yuneng temporarily opted to cooperate with other drying equipment suppliers, resulting in relatively small transaction volume between the two parties in 2024.
Longxin Intelligent later stated that among its top five clients, Hunan Yuneng made repeat purchases based on past successful cooperation during the reporting period, and that its product and project execution capabilities were recognized by major clients, attempting to demonstrate stable and sustainable customer relationships. However, in the face of stark transaction data, the company's explanations appear weak and unconvincing.
In 2023, Longxin Intelligent's sales of drying equipment to Hunan Yuneng amounted to 103 million yuan, which plummeted to merely 520,400 yuan in 2024. This near-total collapse in revenue is inadequately described as a "setback." This is what Longxin Intelligent referred to as "relatively small transaction scale" and "repeat purchases." In the first half of 2025, Hunan Yuneng's procurement of drying equipment saw some recovery, but only to 690,300 yuan.
Regarding patent count, the prospectus indicates that as of the end of June 2025, the company possessed 86 authorized patents, including 18 invention patents, 66 utility model patents, and 2 design patents. However, data displayed on its official website claims the company holds over 100 patents, seemingly conflicting with the prospectus figures. The reason for this discrepancy might be an attempt by the issuer to better showcase its strength, but whether such "strength" can gain client recognition is likely challenging.
It is noteworthy that a criminal ruling document from the Wuxi Intermediate People's Court in Jiangsu Province in September 2020 showed the issuer was involved in a case of falsifying VAT special invoices.
Between December 2013 and February 2014, defendant Feng Mei, acting as the de facto responsible person for defendant entity Yuping Company, introduced by others and without any actual goods transactions, collected invoice fees to issue 10 falsified VAT special invoices for Changzhou Longxin Chemical Machinery Co., Ltd. (hereinafter referred to as Longxin Company, handled in a separate case), operated by Jin Guihua (handled in a separate case). The total amount including tax was 1,003,978.7 yuan, involving tax deductions of 145,877.24 yuan. These invoices had been recorded and used for tax credit.
The above facts were supported by evidence including Longxin Company's business registration materials, business license, VAT special invoices, tax reimbursement certificates, corporate account transaction details, bank card transaction details, witness statements from Zhang and Liu, and the confession record of involved person Jin Guihua.
A point of curiosity is whether, beyond this case, the issuer has been involved in other similar situations, which likely requires further disclosure by the issuer and additional verification by the sponsoring institution.