WOLONG ELECTRIC(SH:600580) Ge Long Hui·2025-08-19 09:52Core Viewpoint - Several A-share companies have announced plans to list in Hong Kong, indicating a strong trend towards dual listings in the market [1][2]. Group 1: Company Overview - Wolong Electric Drive Group Co., Ltd. (Wolong Drive) submitted its prospectus to the Hong Kong Stock Exchange on August 13, seeking a dual listing [1]. - The company has experienced significant stock price increases, with a 40% rise over five trading days following its application [1]. - As of August 19, Wolong Drive's A-share market capitalization was approximately 53 billion RMB [1]. Group 2: Business Background - Wolong Drive's business dates back to 1984, initially focusing on electric motor solutions [5][6]. - The company was established as Zhejiang Wolong in 1995 and went public on the Shanghai Stock Exchange in 2002 [6]. - The controlling shareholders, including founder Chen Jiancheng and his daughter Chen Yanni, hold approximately 38.84% of the company's issued share capital [6]. Group 3: Financial Performance - Wolong Drive's revenue for 2022, 2023, 2024, and the first half of 2025 was 14.27 billion RMB, 15.57 billion RMB, 16.25 billion RMB, and 8.03 billion RMB, respectively [11]. - The net profit figures for the same periods were 839 million RMB, 553 million RMB, 832 million RMB, and 548 million RMB, with a gross margin of 23.9%, 23.9%, 23.2%, and 24.6% [11][12]. - The company faced a significant drop in net profit in 2023 due to losses from investments and asset impairments totaling 269 million RMB [12]. Group 4: Business Segments - Wolong Drive operates in five main business segments: explosion-proof electric drive systems, industrial electric drive systems, HVAC electric drive systems, new energy transportation electric drive systems, and robotics components [10][14]. - The revenue distribution for the first half of 2025 was 30.6% from explosion-proof systems, 26.4% from industrial systems, and 32.1% from HVAC systems, while new energy and robotics accounted for 2.6% and 2.7%, respectively [14]. Group 5: Market Position and Competition - Wolong Drive ranks first in the global explosion-proof electric drive systems market with a market share of approximately 4.5% [29]. - The company is fourth in the global industrial electric drive systems market (2.8% market share) and fifth in the HVAC segment (2.0% market share) [29]. - Major competitors include domestic firms like Dayang Electric and international players such as Siemens and ABB [29]. Group 6: Research and Development - The company has invested in R&D, with expenditures of 817 million RMB, 858 million RMB, 872 million RMB, and 426 million RMB over the respective periods, representing around 5.7% to 5.3% of total revenue [16]. - Wolong Drive employs over 1,800 R&D personnel globally and generated 40.2% of its revenue from international markets in the first half of 2025 [16].