Group 1 - The company produces transformers, including dry transformers and oil-immersed transformers for applications up to 35KV [2] - The company has already applied its transformer products in overseas projects [2] - The company plans to continue exploring domestic market demand while actively expanding into overseas markets [2]

Core Viewpoint - Jiangsu Huachen has received approval from the China Securities Regulatory Commission for a convertible bond issuance aimed at expanding its box-type substation production capacity, which is expected to double after the investment project is completed [1] Group 1: Company Overview - Jiangsu Huachen Transformer Co., Ltd. specializes in the research, production, and sales of power distribution and control equipment, with its main products being dry-type transformers, box-type substations, and oil-immersed transformers [1] - In 2024, the revenue contributions from these three products were 41.28%, 33.38%, and 20.82%, respectively, accounting for over 95% of total revenue [1] Group 2: Financial Situation - As of the end of 2024, Jiangsu Huachen had cash reserves of only 138 million yuan, while short-term borrowings amounted to 241 million yuan, indicating a significant cash shortfall [1] - From 2022 to 2024, the net cash flow from investment activities was negative, totaling over 500 million yuan, while the operating cash flow was also negative for two of those years, only turning positive in 2024 [7] Group 3: Production Capacity and Utilization - The company's box-type substation production capacity increased from 600 units in 2021 to 2,411 units in 2023, representing a fourfold increase, although the capacity utilization rate dropped from 99.17% to 60.64% during the same period [3][4] - The expected production capacity after the new investment project is completed will be 5,771 units, effectively doubling the current capacity [6] Group 4: Market Conditions and Risks - The box-type substation market has experienced a growth rate of 6%-10% from 2020 to 2023, but this is expected to slow down to 2.9%, 4.6%, and 5% from 2024 to 2026 due to the release of existing demand [7] - The photovoltaic industry, which significantly drives demand for box-type substations, is facing severe price competition, with many companies reporting declining profits and a substantial portion facing losses [8]