Xihua Technology's Shanghai Stock Exchange IPO passed the listing committee meeting to provide a small number of domestic enterprises that can provide full-process services for special components for wind power gearboxes

The Zhitong Finance App learned that on September 5, Jiangsu Xihua New Energy Technology Co., Ltd. (abbreviation: Xihua Technology) passed the Shanghai Stock Exchange Listing Committee meeting. The sponsor of this IPO is Cathay Pacific Haitong Securities, which plans to raise 1,498 billion yuan.

According to the prospectus, Xihua Technology is mainly engaged in R&D, manufacturing and sales of special components for large-scale high-end equipment. The product structure is mainly specialized components for wind power gearboxes, supplemented by thick special parts for injection molding machines. It is a large-scale high-end equipment component manufacturer with leading global industry, reliable quality and excellent technology. The company's products are mainly used in the field of large-scale wind power equipment and injection molding machines. The company is one of the few domestic enterprises that can provide full-process services for special components for wind power gearboxes. It is committed to becoming the world's top large-scale manufacturer of high-end equipment special components in the field of new energy wind power, helping the country accelerate the development of new quality productivity in the field of new energy sources.

The company closely follows the market trend of large-scale wind power equipment, continuously upgrades the manufacturing technology of special components for wind power gearboxes, and keeps pace with the highest power products in the market. It has developed products widely used in 1MW to 20MW onshore and offshore wind turbine equipment. The wind turbine power range it covers is in a leading position in the industry, and is one of the important forces in the wind power industry to develop new quality productivity. In 2022 and 2023, the company had a global market share of about 20% in the casting segment for special components for wind power gearboxes, and had a leading market position.

On the financial side, in 2021, 2022, 2023, and January-June 2024, Xihua Technology achieved operating income of approximately 888 million yuan, 942 million yuan, 908 million yuan, and 425 million yuan. In the same period, the company achieved net profit of approximately RMB 216 million, RMB 184 million, RMB 177 million, and RMB 620.677 million, respectively.

It is worth noting that Xihua Technology mentioned in its prospectus that the company has a high concentration of customers and the risk of being dependent on a single customer. During the reporting period, the company's revenue from the top five customers accounted for 99.03%, 99.17%, 97.44% and 97.83% of the main business revenue, respectively, and revenue from Nangao Gear Group, a leading global wind power gearbox manufacturer, accounted for 34.83%, 48.91%, 59.53% and 59.30% of the main business revenue, respectively. The company's customer concentration was high, and there was a single customer dependency on Nangao Gear Group. The company's performance was greatly affected by changes in downstream customer performance.

In the future, if major adverse changes occur in the cooperative relationship between the two parties due to product and service quality not meeting the requirements of major customers, or a decrease in procurement volume due to a decline in the market share of major customers, it will adversely affect the company's business performance.