Sihua Technology's IPO on the Shanghai Stock Exchange was approved at the listing committee meeting, making it one of the few companies in China that can provide full-process services for wind turbine gearbox components.

On September 5th, Jiangsu Xihua New Energy Technology Co., Ltd. (referred to as Xihua Technology) passed the listing committee meeting of the Shanghai Stock Exchange. The sponsor of this IPO is Guotai Haitong, with a planned fundraising amount of 1.498 billion yuan. According to the prospectus, Xihua Technology is mainly engaged in the research and development, manufacturing, and sales of large-scale high-end equipment special parts, with a product structure mainly focused on wind power gearbox special parts and supplemented by injection molding machine thick special parts. The company is a leading global manufacturer of large-scale high-end equipment special parts with reliable quality and excellent technology. The company's products are mainly used in the fields of large-scale wind power equipment and injection molding machines. The company is one of the few enterprises in China that can provide full-process services for wind power gearbox special parts. It is committed to becoming a global top manufacturer of large-scale high-end equipment special parts in the field of new energy wind power, and promoting the rapid development of new productive forces in the national new energy field. The company closely follows the market trend of large-scale wind power equipment and continuously upgrades the manufacturing technology of wind power gearbox special parts. The research and development progress has always been synchronized with the market's highest power products. It has developed products widely used in wind turbine equipment with a power range of 1MW to 20MW, covering a leading position in the industry. In 2022 and 2023, the company's global market share in the casting segment of wind power gearbox special parts is around 20%, holding a relatively leading market position. Financially, for the fiscal years 2021, 2022, 2023, and January to June 2024, Xihua Technology realized operating income of approximately 878 million yuan, 942 million yuan, 908 million yuan, and 425 million yuan respectively. During the same period, the company achieved net profits of approximately 216 million yuan, 184 million yuan, 177 million yuan, and 62.0677 million yuan respectively. It is worth noting that Xihua Technology mentioned in the prospectus that the company faces risks due to high customer concentration and dependence on single customers. During the reporting period, the revenue from the top five customers accounted for 99.03%, 99.17%, 97.44%, and 97.83% of the main business income respectively, while the revenue from the global wind power gearbox manufacturing leader, Nanhaochi Group, accounted for 34.83%, 48.91%, 59.53%, and 59.30% of the main business income. The company's customer concentration is high and it is heavily dependent on Nanhaochi Group, thus the company's performance is greatly affected by changes in the performance of downstream customers. In the future, if there are significant unfavorable changes in the cooperation relationship due to the products and services not meeting the requirements of key customers, or if there is a decrease in market share of key customers leading to a reduction in their procurement volume, it will have a negative impact on the company's operating performance.