POWER HF(SH:605100) Mei Ri Jing Ji Xin Wen·2025-12-17 12:38Core Viewpoint - The traditional component supplier Huafeng Co., Ltd. has decided to terminate its "New Lightweight Engine Core Component Intelligent Manufacturing Project" due to disappointing market conditions and internal capacity utilization issues, reflecting a strategic shift in response to the rapid penetration of new energy heavy trucks in the market [2][6][9] Group 1: Project Termination - Huafeng Co., Ltd. announced the termination of the second phase of its "New Lightweight Engine Core Component Intelligent Manufacturing Project," which was initially planned as a key expansion initiative with a total investment of 750 million yuan, of which 349 million yuan was to be raised [4][5] - The decision to halt the project was made during the fifth board meeting held on December 16, 2025, indicating a shift in the company's investment strategy [4] - The remaining balance of approximately 139 million yuan from the raised funds will be kept in a dedicated account for future investment opportunities [5] Group 2: Market and Internal Challenges - The heavy truck market has been experiencing a downturn, with a 51.84% year-on-year decline in sales in 2022, and while there is some recovery expected from 2023 to 2025, growth rates remain below initial project expectations [6][8] - Internal improvements in technology and processes have led to an increase in production capacity from the planned 50,000 sets to 80,000 sets for the first phase of the project, making further investment in the second phase unnecessary [7] - The rapid growth of new energy heavy trucks, which accounted for 25.95% of the market share by late 2025, has further pressured traditional heavy truck components, indicating a significant shift in market demand [7][8] Group 3: Financial Performance - For the first three quarters of 2025, Huafeng Co., Ltd. reported a revenue of 558 million yuan, a decrease of 23.36% year-on-year, and a net profit of 12.7682 million yuan, down 75.67% year-on-year [8] - The decline in performance is attributed to fluctuations in market demand and changes in customer product structures, leading to reduced orders for components and lower capacity utilization [8][9] - The board concluded that continuing investment in a project with uncertain returns and potential technological risks would not align with shareholder interests, thus supporting the decision to terminate the project [9]