Summary of Key Points
Qianli Technology (formerly Powerfan Technology), under the leadership of Yin Qi, has transformed into an AI+automotive company and is preparing for an IPO on the Hong Kong Stock Exchange. However, a sudden resignation of an independent director at a critical stage has exposed three major concerns: reliance on government subsidies for profitability, excessive related-party transactions with Geely (raising doubts about independence), and aggressive goals for autonomous driving but facing significant challenges in funding and customer acquisition. The market questions whether Qianli Technology is a genuine AI company or merely a capital story supported by subsidies and related-party deals.
Detailed Analysis
1. Resignation of the Independent Director: An Alarm Signal During the IPO Process?
The resignation of an independent director is not uncommon, but the timing is particularly sensitive, as Qianli Technology is in the final stages of its IPO preparation for the Hong Kong Stock Exchange. The company's initial application was rejected in October last year and was resubmitted in April this year, with the prospectus being valid for only six months. The departure of the independent director for “personal reasons” may lead the market to wonder if there are governance issues within the company or if the director lacks confidence in the IPO's success. After all, the role of an independent director is to oversee the company's compliance, and their departure at this critical time could raise concerns among investors.
2. Dependence on Subsidies: Is the Book Profit Just “Puffy”?
Looking at the financial data, Qianli Technology's total revenue for 2025 is nearly 10 billion yuan (a 42% increase), with a net profit attributable to the parent company of 84 million yuan (a 111% increase). On the surface, the figures appear impressive, but there are significant issues:
- Continuous losses in non-recurring net profit for three years: The non-recurring net loss in 2025 amounted to 255 million yuan, a 2.7-fold increase from the previous year, and there were also losses of 135 million yuan and 68.04 million yuan in 2023 and 2024, respectively. The company's book profit is entirely supported by 399 million yuan in government subsidies; without these subsidies, it would incur losses in the hundreds of millions.
- Weak Profitability of the Main Business: The automotive business accounts for 64% of revenue, but the gross profit margin is only 6% due to the company mainly selling to ride-hailing services and B-end customers without a significant brand premium. The more profitable business is the motorcycle segment, with a gross profit margin of 12%. The much-anticipated autonomous driving business accounts for only 3.5% of revenue and is still in the loss-making phase.
In short, the company is relying on motorcycle profits and government subsidies to fuel its “AI dreams,” but these sources of revenue have not yet generated significant profits.
3. The Influence of Geely: Is There Enough Independence?
Qianli Technology's relationship with Geely is very close:
- High Proportion of Related-Party Transactions: In 2025, 29% of the top five customers and 30% of the top five suppliers were related parties of Geely (in 2023, half of the company's purchases came from Geely). Being both the largest customer and supplier creates a self-serving situation.
- Autonomous Driving Business Dependent on Geely: 70% of the autonomous driving installations come from Geely-related companies (such as Xpeng and Lynk & Co.). Although the company aims to reduce its dependence on Geely, the amount of related-party transactions is expected to increase (from 19.3 billion yuan in 2025 to 21.8 billion yuan in 2026). This level of integration raises questions for investors about whether Qianli Technology is merely a subsidiary of Geely and whether there is an exchange of benefits.
4. Aggressive Autonomous Driving Goals: Are 8 Million Vehicles a Feasible Target?
Zhao Ming (former CEO of Honor) set ambitious targets of installing 1-1.3 million autonomous driving systems by the end of 2026 and 8 million by 2028. However, the reality is more challenging:
- Short-Term Goals Unattainable: As of August 2026, only 530,000 systems have been installed. To reach the 1 million target by the end of the year, an additional 94,000 systems need to be installed each month, a significantly higher rate than the company's previous monthly growth.
- Long-Term Goals Even More Challenging: Achieving 8 million vehicles by 2028 would require a 700% increase in installations, which Geely alone (with annual sales in the millions) cannot handle. The company will need to attract a large number of external customers. Currently, besides Geely-related companies (including smart, a joint venture with Mercedes-Benz), no other external customers have adopted Qianli Technology's autonomous driving solutions.
- Funding Pressure: The research and development costs for autonomous driving account for 23.7%, and the traditional business (new energy vehicles) is experiencing a 85% decline in sales, reducing the company's ability to generate cash. The need for financing is urgent, as the company cannot afford to sustain its operations without additional funding.
5. Transformation Dilemmas: An AI Company or a Capital Story?
Qianli Technology aims to transform from a traditional automotive company into an AI company, but it faces three major hurdles:
- Lack of Autonomous Profitability: The company relies on subsidies and suffers losses from its main business.
- Insufficient Independence: Its close relationship with Geely hinders its ability to expand into external markets.
- Fierce Competition in Autonomous Driving: Competitors such as Huawei (25.5% market share) and Momenta are competing fiercely, and Robotaxi services are still trying to catch up with the leading players (Baidu and Pony.ai).
If these issues are not resolved, even a successful IPO may not convince investors, as no one is willing to invest in a company with a “puffy” financial profile that lacks solid profitability.
Conclusion
Qianli Technology's transformation story is promising, but to convince the market of its legitimacy as an AI company, it must address the issues of subsidy dependence, related-party transactions, and ambitious autonomous driving goals. Otherwise, its IPO efforts may fail again.
(End of the analysis.)