Investment Rating - The investment rating for the company is positioned at a score of 2.34, placing it in the 31.8% percentile of the non-technology innovation system AHP model [4][7]. Core Insights - The company, Xihua Technology, specializes in high-quality wind power gear castings and has been closely tied to leading clients for over 20 years. It is one of the few companies in China that can provide full-process services for wind power gearbox components, with a global market share of approximately 20% in this segment from 2022 to 2024 [4][8][9]. - The company is focusing on high-power products, with a significant portion of its revenue coming from products rated at 10MW and above, which is expected to reach 27% by the first half of 2025. The company is also developing ultra-large capacity wind power gearboxes in the 22-28MW range [12][13]. - The company has established strong partnerships with major clients such as Nankai Gear and has expanded its customer base to include companies like CRRC in the past year [9][10]. Summary by Sections AHP Score and Expected Allocation Ratio - The AHP score for Xihua Technology, after excluding liquidity premium factors, is 2.34, which is in the 31.8% percentile. The expected allocation ratios for offline investors A and B are 0.0170% and 0.0147%, respectively, under a neutral scenario [7][8]. Company Fundamentals and Highlights - Xihua Technology has been deeply involved in the wind power gearbox casting sector since its establishment in 2001. The company has a leading position in both the manufacturing of raw castings and the mechanical processing of components [8][9]. - The company has a strong focus on high-value-added products, with finished product revenue accounting for 60.68% in 2023, while pre-processed and raw castings have seen a decline [8][9]. Financial Comparison with Peers - The company’s revenue and net profit for 2022-2024 are projected to show a compound annual growth rate (CAGR) of 0.69% and -12.04%, respectively. However, in the first three quarters of 2025, the company expects a revenue growth of 35.35% and a net profit growth of 55.22% [16][17]. - The average price-to-earnings (P/E) ratio for comparable companies is 43.46X, while Xihua Technology's industry P/E ratio is 43.33X [15]. Product Structure and Profitability - The company’s sales gross margin and net margin for 2022-2024 are 29.32%, 30.28%, 25.86%, and 27.85% for gross margin, and 19.59%, 19.46%, 14.87%, and 16.36% for net margin, respectively. The company’s focus on high-tech components contributes to its higher profitability compared to peers [21][22]. Cash Flow and Debt Levels - The company’s cash collection ratio has been declining, with figures of 0.75, 0.90, 0.85, and 0.70 for the years 2022-2025H1. The debt-to-asset ratio has increased to 37.34% in the first half of 2025, primarily due to expanded production capacity and increased borrowings [24][25]. R&D Investment - The company’s R&D expenditure as a percentage of revenue is slightly lower than that of comparable companies, with rates of 3.77%, 3.68%, 4.92%, and 4.16% for 2022-2025H1. However, there is an upward trend in R&D spending as new product development intensifies [26][27]. Fundraising Projects and Development Vision - The company plans to raise up to 1.498 billion yuan through the issuance of new shares, which will be allocated to projects such as the industrialization of core wind power equipment and the establishment of a research and development center [28][30][31].