Produced by | Frontline of Entrepreneurship

Author | Xipo

Editor | Wang Yajing

Art Designer | Xing Jing

Reviewer | Song Wen

Recently, Hubei Longchen Technology Co., Ltd. from Huanggang, Hubei (hereinafter referred to as “Longchen Technology”)** submitted its registration to the Beijing Stock Exchange.**

Longchen Technology first submitted its prospectus in December 2022, initiating the IPO process on the Beijing Stock Exchange. Subsequently, on April 25, 2023, the company’s first review meeting was temporarily suspended, and the second review was directly rejected.

Behind two consecutive failures at the review, one of the key concerns of the listing committee has always been the reasonableness of transactions between Longchen Technology and natural person Quan Yongjian and his related parties.

Amid external doubts, Longchen Technology acquired Quan Yongjian’s remaining 48% stake in Jiangsu Shuangkai, but the authenticity of this transaction remains questioned by the Beijing Stock Exchange.

In addition, Longchen Technology faces multiple issues such as the addition of new concerted parties just before the review, heavy reliance on a single supplier, frequent administrative penalties, and weak debt repayment ability, raising concerns about operational compliance and stability.

1. Original actual controller “withdraws and departs,” new concerted parties added before review

In 2003, Longchen Technology’s predecessor, Longchen Electronics, was established with Foshan Shengxiang and Nuoxun Company jointly investing $1.05 million, focusing on the research, development, and production of polypropylene film for capacitors.

In 2004, benefiting from policies like “home appliance rural subsidy,” Longchen Electronics’ business began to grow. From 2008 to 2010, Longchen Electronics transitioned from a Sino-foreign joint venture to a domestic enterprise. Among them, foreign shareholder Nuoxun transferred its 28% stake to Huang Zhiren, who then, along with Foshan Shengxiang, transferred all shares to Pan Xuxiang, Lin Weiliang, and Pan Yujun.

(Photo / Longchen Technology’s public transfer prospectus on the New Third Board)

In 2011, Longchen Electronics was restructured into a joint-stock company; in 2015, it was listed on the New Third Board, officially entering the capital market. At that time, Longchen Technology was still controlled by the Pan family, with Pan Xuxiang holding 76.21%, serving as the controlling shareholder and actual controller.

(Photo / Longchen Technology’s public transfer prospectus on the New Third Board)

The turning point occurred in May 2017.

At that time, Pan Xuxiang and Lin Meiyun divided their property due to divorce. Unlike many divorce splits in A-share listed companies, Pan Xuxiang transferred all his shares in the company to Lin Meiyun, effectively “cleaning out” of Longchen Technology, entrusting her with the business empire he had managed for years.

Since then, Lin Meiyun’s shareholding increased to 78.41%, becoming the controlling shareholder and actual controller, while Pan Xuxiang exited the shareholder list and disappeared from the management team.

(Photo / Longchen Technology’s 2017 annual report)

Public information shows that Lin Meiyun was born in August 1969, with a technical college education, engaged in business activities early in her career. From April 1998 to May 2017, she served as General Manager of Huhang Electronics in Wenling City; since May 2017, she has been with Longchen Technology, currently serving as Chairwoman and General Manager.

As of the signing date of the prospectus, Lin Meiyun directly held 52.61% of Longchen Technology’s shares and controlled 1.47% through serving as the executive partner of Ze Ming Xin Chen, totaling 54.08% of the company’s equity.

(Photo / Longchen Technology’s prospectus)

Notably, just before the review meeting, Longchen Technology suddenly added a concerted party.

In the second round of inquiry letters, the Beijing Stock Exchange pointed out that the company’s fourth-largest shareholder, Lin Weiliang (holding 3.48%), is both Lin Meiyun’s younger brother and an employee of the company, requiring Longchen Technology to clarify whether Lin Weiliang is a concerted party of Lin Meiyun.

In the reply to the second inquiry letter disclosed on January 28, 2026, Longchen Technology argued that Lin Meiyun has a high degree of control over the company and that there is no concerted action arrangement between the two, asserting that it is reasonable not to recognize Lin Weiliang as a concerted party of Lin Meiyun.

However, the prospectus (registration draft) disclosed that Lin Meiyun and Lin Weiliang signed a “Concerted Action Agreement” on February 12, 2026, and subsequently recognized Lin Weiliang as a concerted party of Lin Meiyun. It appears that the previous statement by Longchen Technology may lack consistency and rigor.

(Photo / Longchen Technology’s prospectus)

2. 70% of procurement depends on a single supplier, financial pressure mounting

The prospectus discloses that Longchen Technology’s main business involves the research, development, production, and sales of BOPP film materials related to film capacitors, mainly divided into base film and metallized film.

Film materials are made from polypropylene resin through a biaxial stretching process, serving as an insulating dielectric material with high insulation impedance, uniform thickness, low dielectric loss, and high dielectric strength. They are one of the core raw materials for film capacitors, with downstream applications covering power grids, household appliances, new energy vehicles, and more.

From 2023 to 2025 (hereinafter referred to as the “Reporting Period”), Longchen Technology achieved operating revenues of 371 million yuan, 604 million yuan, and 642 million yuan; net profits attributable to the parent company were 43.48 million yuan, 69.31 million yuan, and 85.55 million yuan, respectively.

(Photo / Longchen Technology’s prospectus)

In the first quarter of 2026, Longchen Technology expects to achieve operating income of 170 million to 186 million yuan, a change of 5.67% to 15.62%; net profit attributable to the parent is projected at 25 million to 27 million yuan, a change of -1.27% to 6.63%.

(Photo / Longchen Technology’s prospectus)

Among them, the company’s core product, base film, achieved revenues of 232 million yuan, 426 million yuan, and 491 million yuan, accounting for 63.28%, 72.69%, and 77.30% of the main business income, respectively.

(Photo / Longchen Technology’s prospectus)

The sales volume of high-temperature base film during the reporting period was 5,347.96 tons, 10.4k tons, and 12.7k tons, respectively. In 2024, the sales volume of high-temperature base film increased by 93.87% year-on-year, driving revenue growth during that period.

(Photo / Longchen Technology’s prospectus)

“Frontline of Entrepreneurship” notes that Longchen Technology has a dependency on suppliers.

The prospectus shows that during the reporting period, procurement from the top five suppliers amounted to 172 million yuan, 235 million yuan, and 284 million yuan, accounting for 89.02%, 87.13%, and 89.71% of total procurement, respectively.

(Photo / Longchen Technology’s prospectus)

Among them, the company’s procurement of polypropylene resin is especially dependent on DaHanh Oil Chemical.

During the reporting period, the company directly purchased polypropylene resin from DaHanh Oil Chemical for 73.52 million yuan, 102 million yuan, and 147 million yuan, respectively. Purchases from the trading company Shanghai Sailite Plastic Co., Ltd. and its related companies amounted to 32.23 million yuan, 76.10 million yuan, and 89.12 million yuan, respectively, accounting for 54.72%, 66.14%, and 74.62% of total procurement. This indicates a reliance on DaHanh Oil Chemical.

In response, Longchen Technology stated in the prospectus that if DaHanh Oil Chemical is affected by trade policies or other factors and cannot supply the relevant raw materials in a timely and full manner, and if the company cannot seek alternative raw materials in the short term, it would adversely affect the company’s production and operations.

In fact, Longchen Technology’s current operations already face certain capital pressures.

During the reporting period, the company’s asset-liability ratio (consolidated) was 46.18%, 46.63%, and 42.12%, far higher than the industry average of 17.82%, 13.47%, and 23.27%.

(Photo / Longchen Technology’s prospectus)

The high asset-liability ratio indicates that the company also faces certain capital pressures. As of the end of 2025, Longchen Technology’s short-term loans reached 358 million yuan, while its monetary funds were only 24.47 million yuan, making it difficult to cover short-term debts, thus increasing short-term repayment pressure and liquidity risk.

(Photo / Longchen Technology’s prospectus)

Moreover, during the reporting period, the company’s net operating cash flow was -52.20 million yuan, 3.96 million yuan, and -26.73 million yuan, indicating a state of “blood loss.”

Overall, Longchen Technology faces significant short-term debt repayment pressure, cash flow strain, and with a notably high asset-liability ratio compared to peers, its capital chain and financial structure are under considerable challenge.

3. Acquisition of assets to expand scale, repeated inquiries over Quan Yongjian transaction

In fact, the growth in Longchen Technology’s performance is also attributable to two acquisitions.

In July 2021 and January 2022, Longchen Technology acquired 100% equity of Jiangsu Zhonglifan Industrial Co., Ltd. (“Zhonglifan”) and 52% equity of Jiangsu Shuangkai Electronics Co., Ltd. (“Jiangsu Shuangkai”), respectively.

Zhonglifan mainly engages in the research, production, and sales of capacitor films and related products, while Jiangsu Shuangkai focuses on electronic special materials and components.

It is these two acquisitions that rapidly expanded Longchen Technology’s scale. For example, in 2025, only Zhonglifan and Jiangsu Shuangkai among its subsidiaries achieved significant profits, with a combined net profit of 58.62 million yuan.

Notably, behind these acquisitions is a key figure—Quan Yongjian.

Data shows that Quan Yongjian previously worked at Korea Samyung Electronics Industrial Co., Ltd., responsible for capacitor film sales. After returning to China, Quan and his wife established Dalian Kailida and Zhejiang Kailida, engaged in BOPP film trading. In 2020, they contracted Zhonglifan’s BOPP film production line, producing and selling to downstream customers.

At that time, Zhonglifan was wholly owned by Chen Yinping and others. Although Quan Yongjian did not hold equity in Zhonglifan, he effectively controlled the operation of the production line and downstream customer resources.

In July 2021, Longchen Technology acquired 100% of Zhonglifan at a valuation less than half of its equity value, for 10 million yuan. Soon after, Longchen Technology increased its investment in Zhonglifan by 30 million yuan to repay maturing debts.

Half a year later (March 2022), Longchen Technology transferred 30% of Zhonglifan’s equity to Chen Yinping for 12 million yuan.

The key issue is that even after acquiring Zhonglifan’s equity, the products produced are still largely sold to Zhejiang Kailida controlled by Quan Yongjian. It is reported that in 2021 and 2022, Zhejiang Kailida and its related parties were Longchen Technology’s top customers, contributing 12.85% and 19.30% of revenue, respectively.

(Photo / Longchen Technology’s prospectus)

Furthermore, driven by the desire to produce BOPP film independently, in July 2021, Quan Yongjian established Jiangsu Shuangkai and ordered a production line from France Maysan worth 8.48 million euros.

In 2022, facing pressures from factory construction and equipment payments, Quan Yongjian transferred 52% of Jiangsu Shuangkai’s equity to Longchen Technology for free, while he himself procured from Jiangsu Shuangkai through Taizhou Kailida for external sales.

This arrangement deepened the利益 entanglement between Longchen Technology and Quan Yongjian. During the initial review, the Beijing Stock Exchange required the company to explain why its trading customers were only Kailida and its related companies, whether recognizing Kailida as a related party was compliant, and other issues.

Amid external doubts, in August 2024, Longchen Technology acquired the remaining 48% of Jiangsu Shuangkai for 45 million yuan, achieving 100% control.

However, the inquiry letter from the exchange questioned the reasons and commercial rationality behind Quan Yongjian’s exit from Jiangsu Shuangkai, and doubts about the relationship between the parties remain unresolved.

It is noteworthy that Longchen Technology and related personnel have been penalized five times for failing to disclose the 8.52 million euro procurement of production lines, the use of funds by the actual controller Lin Meiyun, and changes in annual auditors without shareholder approval.

(Photo / Longchen Technology’s prospectus)

Given Longchen Technology’s previous internal control issues, the Beijing Stock Exchange is especially attentive to this “non-related party” process.

Looking back, concerns about reliance on a single supplier, transactions with Quan Yongjian, cash flow pressures, and related issues continue to attract attention. Whether these will hinder the company’s listing remains to be seen, and “Frontline of Entrepreneurship” will keep monitoring.

Note: The header image is from Longchen Technology’s official website.