Jiangsu Huachen(SH:603097) NORTHEAST SECURITIES·2025-06-23 00:43Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The target price of Huachen Convertible Bonds on the first day of listing is expected to be between 123 - 128 yuan, and investors are advised to actively subscribe. The expected conversion premium rate on the first - day of listing is in the range of 22% - 27% [3][17]. - The expected first - day new - bond subscription winning rate is around 0.0013% - 0.002% [4][18]. Summary According to the Directory 1. Huachen Convertible Bonds New - Bond Analysis and Investment Recommendations 1.1 Convertible Bond Basic Terms Analysis - The issuance methods of Huachen Convertible Bonds are priority placement and online issuance. The bond and issuer ratings are A+. The issuance scale is 460 million yuan, the initial conversion price is 23.53 yuan, and the convertible bond parity on June 19, 2025, is 100.89 yuan. The calculated pure bond value is 84.22 yuan. The game terms are normal. Overall, the bond issuance scale is low, liquidity is poor, the rating is weak, and the bond floor protection is acceptable. It is difficult for institutions to include it in their portfolios, but there is no objection to primary participation [2][13]. 1.2 New - Bond Initial Listing Price Analysis - The company's main business is the R & D, production, and sales of power transmission and control equipment such as energy - saving transformers, box - type substations, and intelligent electrical complete equipment. The funds raised from this issuance are mainly used for the "New Energy Power Equipment Intelligent Manufacturing Industrial Base Construction Project (Phase I)" and the "New Energy Power Equipment Digital Factory Construction Project", which can enhance the company's market competitiveness and optimize its capital structure [3][16]. - The target price of Huachen Convertible Bonds on the first day of listing is 123 - 128 yuan, and investors are advised to actively subscribe. Considering the current market environment and parity level, the conversion premium rate on the first - day of listing is expected to be in the range of 22% - 27% [3][17]. 1.3 Convertible Bond New - Bond Subscription Winning Rate Analysis - As of December 31, 2024, the top two shareholders held 62.5% of the company's shares, and the top ten shareholders held 75.75% in total. Assuming the old - shareholder placement ratio is 63% - 76%, the scale of Huachen Convertible Bonds available to the market is 110 million - 170 million yuan. Assuming the online effective subscription number is 8360000 households, the winning rate is around 0.0013% - 0.002% [4][18]. 2. Analysis of the Underlying Stock's Fundamental Situation 2.1 Company's Main Business and the Upstream and Downstream of the Industry - The company's main business is the R & D, production, and sales of power transmission and control equipment. Its main products include dry - type transformers, oil - immersed transformers, etc. [19]. - The company's upstream industries are steel, non - ferrous metals, etc. The downstream industries are traditional power grids, new energy, etc. The upstream affects the industry through raw material price fluctuations, and the downstream affects it through market demand [19][20]. 2.2 Company's Operating Conditions - From 2022 to Q1 2025, the company's operating income showed an overall upward trend, with year - on - year growth rates of 17.62%, 47.4%, 4.69%, and 15.28% respectively. The growth was driven by the increasing demand for power transmission products in the new energy field [21]. - The company's comprehensive gross profit margin first increased and then decreased, being 21.24%, 22.82%, 21%, and 20.33% from 2022 to Q1 2025. The net profit margins were 8.91%, 8.04%, 5.76%, and 7.13% respectively. The gross profit margin was affected by raw material prices and product sales structure [23]. - The company's annual period expenses generally increased, and the R & D expenses gradually rose. The accounts receivable showed small fluctuations, and the accounts receivable turnover rate generally declined [28][29][31]. 2.3 Company's Equity Structure and Major Subsidiaries - As of December 31, 2024, the company's equity structure was relatively concentrated. The top two shareholders held 62.5% of the shares, and the top ten shareholders held 75.75% in total. The company's controlling shareholder and actual controller is Zhang Xiaojin. The company has 3 wholly - owned or holding subsidiaries [35][38]. 2.4 Company's Business Characteristics and Advantages - The company has brand and customer advantages, R & D and technology advantages, marketing and after - sales service advantages, talent and management advantages, and intelligent manufacturing advantages [41][42][43]. 2.5 Allocation of the Funds Raised from This Issuance - The company plans to issue convertible bonds to raise no more than 460 million yuan. Among them, 269 million yuan is planned to be invested in the "New Energy Power Equipment Intelligent Manufacturing Industrial Base Construction Project (Phase I)", and 101 million yuan is for the "New Energy Power Equipment Digital Factory Construction Project". The remaining 90 million yuan is for working capital [11][45].