Tengden Science and Technology IPO: Subsidiary's Investee Becomes Top Prepayment Recipient but Not Listed as Related Party

Sichuan Tengden Technology Co., Ltd. (hereinafter "Tengden Technology"), currently pursuing an IPO on the ChiNext board, exhibits multiple cross-relationships between its industrial investments, procurement activities, and prepayments.

Key Findings

Subsidiary Invests in Supplier, Yet Supplier Not Listed as Related Party

According to a review by National Business Daily (NBD) reporters, in April 2025, Tengden Technology's subsidiary, Sichuan Xingtu Linghang Commercial Aircraft Co., Ltd. (hereinafter "Sichuan Xingtu Linghang"), invested in Xibaike Technology (Suzhou) Co., Ltd. (hereinafter "Xibaike Technology"), acquiring a 1.62% stake. By the end of 2025, Xibaike Technology had become Tengden Technology's largest prepayment counterparty, with a balance of RMB 12.3781 million. However, Xibaike Technology does not appear on Tengden Technology's disclosed lists of related parties, related-party procurement, or related-party prepayments.

Additionally, Tengden Technology's second-largest prepayment counterparty, Fujian Julong Aviation Technology Co., Ltd. (hereinafter "Fujian Julong"), has historical ties to a now-dissolved aviation technology company, including shared shareholding, a registered address, personnel overlap, and patent transfers.

Tengden Technology's IPO is currently in the inquiry stage. The company plans to raise RMB 3.021 billion, with RMB 500 million allocated to supplement working capital. According to its prospectus (draft), Tengden Technology reported net profits attributable to parent of approximately -RMB 469 million, -RMB 364 million, and -RMB 426 million for 2023, 2024, and 2025, respectively.

Investee Xibaike Technology Becomes Top Prepayment Counterparty, Yet Excluded from Related Party List

According to the prospectus, Xibaike Technology appears on both Tengden Technology's "investee companies" and "prepayment counterparties" lists.

Xibaike Technology was established in August 2023 with a registered capital of RMB 2.4758 million. It is primarily engaged in the development and assembly of aviation metal and composite material parts and tooling, as well as the design and process development of composite material airframe structures for new aircraft. Sichuan Xingtu Linghang holds a 1.62% stake in the company.

Tianyancha business registration change records show that Sichuan Xingtu Linghang entered Xibaike Technology's shareholder list on April 24, 2025, with a capital contribution of RMB 40,000.

Less than a year after the investment, Xibaike Technology became Tengden Technology's largest prepayment counterparty. As of the end of 2025, the prepayment balance to Xibaike Technology stood at RMB 12.3781 million, accounting for 17.06% of total prepayments.

In its accounting treatment, Tengden Technology did not classify Xibaike Technology as a long-term equity investment but instead listed it under other non-current financial assets.

In contrast, Tengden Technology listed Leidun Electronics, Jiangxi Shengshi Huadun, Haofu Technology, Jiangxi Tengyu, and Dazhou Low-Altitude Economy as associates and related parties. In 2025, Tengden Technology's purchases of goods and services from Leidun Electronics, Haofu Technology, and Jiangxi Shengshi Huadun amounted to RMB 1.7045 million, RMB 1.9248 million, and RMB 19.2899 million, respectively, all disclosed as related-party procurement. The company stated that recurring related-party transactions "mainly consist of related-party procurement from investee companies and related-party leases." In terms of shareholding, Tengden Technology's stakes in these companies range from 3% to 30%. For instance, its direct stake in Haofu Technology is 3.01%, but one of Haofu Technology's directors, Wang Qi, is also the legal representative of a Tengden Technology subsidiary. As for whether Xibaike Technology's board includes representatives with Tengden Technology ties, this cannot be determined from publicly available business registration data.

Notably, Xibaike Technology, listed under "other investee companies," does not appear on Tengden Technology's related-party or related-party procurement lists. The company's disclosed related-party prepayments as of the end of 2025 only include RMB 230,500 to Chengdu Huazhi Lihang Industrial Co., Ltd.

Legal Analysis

Wang Huaitao, a lawyer at Shanghai New Ancient Law Firm, analyzed the situation for NBD: "Under capital market regulatory rules, an investee is not automatically deemed a related party simply because an issuer's subsidiary holds a stake. Shareholding percentage is only one factor. A subsidiary holding only 1.62% of the target company does not meet the relevant threshold based on that percentage alone. However, related-party determination should not mechanically apply percentage thresholds. It requires a comprehensive assessment of whether the issuer can exert significant influence over the investee, including substantive factors such as board representation, business agreements, personnel cross-appointments, and key management interests. Even with a nominally low shareholding, if significant influence can be exerted through business cooperation, personnel, or other arrangements, the investee should be included in the related-party disclosure scope."

Wang further noted: "For IPO companies, when prepayment amounts are high and transaction values are large, even if the counterparty does not constitute a statutory related party, the company should fully disclose the transaction background and commercial rationale, explain whether there is any risk of benefit transfer, and ensure the completeness of information disclosure."

Large Prepayments Continue; Supplier Fujian Julong Simultaneously Acquires Patents from Another Company

Fujian Julong has ranked among Tengden Technology's top five prepayment counterparties for two consecutive years. As of the end of 2024 and 2025, the prepayment balances to Fujian Julong were RMB 10 million and RMB 11.43 million, respectively, accounting for 10.85% and 15.75% of total prepayments.

According to the prospectus, Tengden Technology signed a RMB 20.193 million technical service contract with Fujian Julong's predecessor, Fujian Kebit Aviation Technology Co., Ltd. (hereinafter "Fujian Kebit"), in October 2024. As of the end of 2025, the contract was still being performed.

Fujian Julong's business registration records also point to the now-dissolved Fujian Xingkuang Zhuangju Aviation Technology Co., Ltd. (hereinafter "Fujian Xingkuang Zhuangju").

Fujian Julong was established in April 2023, originally named Fujian Kebit. In June of the same year, Sanming Xingkuang Zhuangju Trading Co., Ltd. was established, with Fujian Kebit holding 30% and Huang Shunbing holding 70%.

In November 2023, Fujian Kebit withdrew, and Sanming Xingkuang Zhuangju Trading Co., Ltd. simultaneously underwent a name change, capital increase, and business transformation: the company was renamed Fujian Xingkuang Zhuangju, its registered capital increased from RMB 10 million to RMB 50 million, and its business scope shifted from trading in general merchandise and building materials to drone manufacturing, navigation surveying and mapping instrument manufacturing, and aviation equipment sales. Zheng Xijun, Huang Shunbing, Yang Daoshui, Luo Huihuang, and He Shiwen became new shareholders of Fujian Xingkuang Zhuangju.

These same shareholders of Fujian Xingkuang Zhuangju also appear concentrated in Fujian Julong. Zheng Xijun holds 90% of Fujian Julong and serves as its chairman; Huang Shunbing serves as a director; Yang Daoshui serves as general manager; and Luo Huihuang serves as a director. Additionally, both Fujian Xingkuang Zhuangju and Fujian Julong share the same financial officer, Liu Guiping.

NBD reporters noted that Fujian Xingkuang Zhuangju and Fujian Julong were also registered at the same address: Building 11, Sanming Zhongguancun Science Park. Fujian Julong did not move out until its name change in November 2024.

On July 17, 2025, at least five patents held by Fujian Xingkuang Zhuangju were transferred to Fujian Julong, covering areas such as firefighting drones, drone fire-extinguishing devices, emergency supply drone delivery mechanisms, and drone landing gear. On October 28 of the same year, Fujian Xingkuang Zhuangju resolved to dissolve and was subsequently deregistered.

Looking at the timeline, the patent transfer and dissolution of Fujian Xingkuang Zhuangju both occurred during the performance period of the technical service contract between Tengden Technology and Fujian Julong. On September 21, NBD reporters attempted to contact Zheng Xijun by phone, but the call was disconnected upon connection. Subsequent attempts resulted in a "busy" signal.

On September 21 and 22, NBD reporters repeatedly contacted Tengden Technology regarding the company's investments in prepayment counterparties and related issues, but the company did not provide substantive responses.

(Source: National Business Daily)