Yihe Jie's application for an IPO on the Shenzhen Stock Exchange has been "terminated (withdrawn)". Please note the risk of slower-than-expected promotion in the fuel cell vehicle market.

On March 8, the initial public offer (IPO) of Yihetech Automotive Technology Co., Ltd. (referred to as Yihetech) on the ChiNext board of the Shenzhen Stock Exchange was terminated. This decision was made as Yihetech and the sponsor withdrew their application for listing, in accordance with the rules of the Shenzhen Stock Exchange for the review of stock issuance and listing. According to the prospectus, Yihetech's main products are turbochargers and cores, primarily targeting the overseas automotive aftermarket. There have been no significant changes in the main business during the reporting period. Benefiting from the continuous growth of the global automotive fleet over the past 10 years, rapid increase in turbocharger installation rates, and increase in vehicle age leading to a significant rise in turbocharger replacement rates, the company's operating income has shown a rapid growth trend. Furthermore, Yihetech is actively expanding the innovative application of turbocharging technology in the new energy vehicle and hydrogen energy fields. As hybrid power is an important technological route for new energy vehicles, the company has developed turbochargers specifically for use in new energy PHEV hybrid vehicles (including range-extended hybrids), actively cooperating with domestic new energy PHEV independent brand vehicle manufacturers and securing some project partnerships. Public information shows that the aftermarket for turbochargers has a wide variety of categories and models, with limited space in the market for single products, and repairs and replacements needing to be carried out in specialized car repair shops. Currently, the aftermarket for turbochargers is mainly composed of OEM brands and independent aftermarket brands. OEM brands include Garrett and BorgWarner, while independent aftermarket brands include Yihetech JRONE, Rotomaster, Master Power, Melett, among others. Rotomaster is a leading aftermarket brand in North America; Master Power in South America; and Melett is a British brand with high visibility in the European market. During the reporting period, Yihetech's total sales volume of turbocharger assemblies and cores were 785,600 units, 778,000 units, 873,900 units, and 510,800 units respectively, with a cumulative sales volume of 2.9483 million units, of which the cumulative sales volume of complete assemblies was 1.0245 million units, making it an important participant in the global turbocharger aftermarket. Financially, the company is expected to achieve operating income of approximately 499 million yuan, 543 million yuan, and 631 million yuan respectively in 2021, 2022, and 2023, with corresponding net profits of approximately 69.6131 million yuan, 80.8831 million yuan, and 111 million yuan during the same period. In the prospectus, Yihetech highlighted the risk of lower-than-expected promotion of the fuel cell vehicle (FCV) market. The company has made significant investments in the field of air compressors, which are key components of hydrogen fuel cells, in line with the company's strategic focus on innovative applications of turbocharging technology. During the reporting period, the total research and development expenses amounted to 28.0057 million yuan, with plans for continued increase in investment in the future. The company's raised funds will include the construction of a hydrogen fuel cell BOP system component industrialization project with an estimated investment of around 107 million yuan, to establish a new production line for hydrogen fuel cell BOP system components. Yihetech's investments in the aforementioned areas are mainly aimed at the fuel cell field, with business development primarily influenced by downstream overall market demand for hydrogen fuel cells. The promotion of fuel cells is currently subject to the impact of various factors such as policies and market conditions, which may lead to slower industry development than expected, resulting in insufficient market demand and risks of overcapacity and inability to digest, thereby affecting the company's investments in the air compressor field and the realization of expected returns from the industrialization of hydrogen fuel cell BOP system components.