Challenges in NABU's IPO: Family-style management or concerns about control

From a structural perspective, new energy vehicles have added components such as battery liquid cooling panels, battery coolers, electronic expansion valves, PTC heaters or heat pumps compared to traditional fuel-powered vehicles. As the new energy vehicle industry has developed rapidly, some manufacturers that produce these additional components have also "risen with the tide" and are now applying for listing on the market.

Recently, NABU New Energy Co., Ltd. (hereinafter referred to as "NABU") submitted its listing application to the Shanghai Stock Exchange's Growth Enterprise Market (GEM) and Zhejiang Securities (601878) will be acting as NABU's sole sponsor.

This time, NABU plans to raise RMB 8.29 billion to fund its production project for battery liquid cooling panels (Phase I) and expansion projects at its Tai'an production base.

However, NABU still faces risks such as potential control not being exercised in a proper manner and bad debt risk.

NABU's performance has been impressive over the past few years.

In 2020-2022, NABU's revenue was approximately RMB 1.98 billion, RMB 5.20 billion, and RMB 10.31 billion, respectively, with net profit attributable to shareholders of approximately RMB 0.08 billion, RMB 0.48 billion, and RMB 1.13 billion, respectively.

In the first three months of 2023, NABU's revenue was approximately RMB 2.03 billion, with net profit attributable to shareholders of approximately RMB 0.13 billion.

However, NABU's accounts receivable have also been growing rapidly.

In 2020-2022, NABU's accounts receivable were approximately RMB 0.85 billion, RMB 2.48 billion, and RMB 3.23 billion, respectively, accounting for 23.27%, 30.31%, and 25.52% of total assets, respectively.

If the company's accounts receivable are not managed properly or if its major debtors experience financial difficulties, NABU may face bad debt risk, which could have a negative impact on its operating performance and cash flow.