Pricing Analysis of Related Party Transactions Between Etok and Chery Auto

Based on the public information I have collected, here is a detailed analysis of the pricing of related party transactions between Etok and Chery:

(Wuhu E-Tech Automotive Electronics Co., Ltd.) is an automotive electronics intelligent solution provider that is applying for listing on the Main Board of the Shanghai Stock Exchange [1][2].

:

Shareholder	Shareholding Ratio
Chery Automobile Co., Ltd.	14.99%
Xiaomi Yangtze River Fund	8.19%
Hainan Jimu	4.32%
Xiaomi Intelligent Manufacturing	1.56%
Total Xiaomi Affiliates	14.07%

The actual controller, CHEN ZEJIAN, can exercise voting rights over 34.36% of the company’s shares [1].

Based on the data in the prospectus, the related party transactions between Etok and Chery are as follows [2]:

Year	Amount of Related Party Transactions (10,000 RMB)	Proportion of Operating Revenue
2022	60,019.29	27.60%
2023	106,250.07	35.36%
2024	186,899.72	53.89%

, mainly due to:

• The affiliated party Chery Auto has continued to increase its whole vehicle sales
• The intelligentization level of the sold vehicle models has continuously improved, driving the rapid growth of the company’s product sales revenue [2]

According to publicly disclosed information, Etok’s statement on the pricing of related party transactions is as follows [2]:

“The related party transactions between the company and Chery Auto are part of the company’s normal production and business activities. The transaction prices are fair and do not harm the interests of the company and its shareholders.”

:

1. Reference the market price of similar products
2. Negotiate pricing by comprehensively considering factors such as production costs
3. Conduct annual price reduction adjustments with reference to automotive industry practices

The sales pricing in the automotive industry usually adopts a “high first, then low” model, meaning sales prices decrease year by year [1]. The sales prices of the company’s main products have indeed shown a continuous downward trend:

• From 2022 to 2024, the average prices of the company’s body domain electronic products and powertrain domain electronic products showed a downward trend
• The prices slightly recovered in the first half of 2025, but still did not reach the 2022 level

During the reporting period, the gross profit margin of the company’s main business was as follows [2]:

• 2022: 14.85%
• 2023: 16.25%
• 2024: 17.12%

The gross profit margin has shown a steady upward trend, indicating that the pricing of related party transactions has not significantly harmed the company’s interests.

The proportion of sales revenue from the top five customers of the company was as follows [1][2]:

• 2022: 73.16%
• 2023: 80.92%
• 2024: 84.38%

Among them, the dependence on Chery Auto is the highest, reaching 53.89% in 2024.

According to the focus of IPO review, the fairness of pricing for related party transactions is a key review item:

1. Transparency of Pricing Basis
   : It is necessary to explain whether the pricing for transactions with non-related parties is consistent
2. Gross Profit Margin Comparison
   : The gross profit margin of related party transactions should be basically the same as that of non-related transactions
3. Decision-Making Procedures
   : Whether necessary decision-making procedures have been followed for related party transactions
4. Information Disclosure
   : Whether the necessity of related party transactions and pricing policies have been fully disclosed

1. Risk of High Customer Dependence
   : If Chery Auto’s operating conditions or procurement strategies change significantly, it may have a major adverse impact on the company’s business
2. Continuous Increase in the Proportion of Related Party Transactions
   : May lead to questions about the company’s ability to independently face the market
3. Risk of Annual Price Reduction
   : Product sales prices and gross profit margins may decline due to annual price reductions [1]

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The pricing of related party transactions between Etok and Chery follows market-oriented principles, referring to market prices and considering factors such as production costs. From the perspective of gross profit margin, the pricing of related party transactions is reasonable and conforms to the market pricing mechanism. However, investors still need to pay attention to the corporate governance risks and customer concentration risks that may be brought by the excessively high proportion of related party transactions.

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[1] Etok IPO: Deeply Bound with Chery, Risks of Annual Price Reduction Emerge, Still Raising Funds to Expand Production Amid Declining Capacity Utilization - NetEase Finance, January 14, 2026

[2] Prospectus (Submission Draft) of Wuhu E-Tech Automotive Electronics Co., Ltd. - Shanghai Stock Exchange, June 20, 2025

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