Wolong Electric Group Co.,Ltd. reported a slight decline in revenue for 2025 but a significant 42% increase in net profit, a divergence that may reflect capital maneuvers within the Wolong group. Ahead of its planned Hong Kong listing, the company transferred its photovoltaic and energy storage assets to affiliate Wolong New Energy, a move that achieved three objectives: optimizing its own financial statements, helping the affiliate avoid delisting while transitioning its business, and enabling the indirect listing of the transferred assets. Notably, emerging businesses such as robotics and the low-altitude economy, which have attracted market attention, contributed only about 6% of total revenue, with some segments posting a gross margin of just 6%. Given the quality of these operations, questions arise as to whether the company’s soaring stock price is overvalued.
Wolong Electric recently released its 2025 annual report, showing a mismatch between revenue and net profit. The company’s main business revenue reached 15.454 billion yuan, down 4.88% year-on-year, while net profit attributable to shareholders rose 42.04% to 1.126 billion yuan. After excluding non-recurring gains and losses, net profit increased 29.58% to 823 million yuan. These figures indicate a substantial profit growth despite a decline in revenue.
The discrepancy was more pronounced in the fourth quarter of 2025. Quarterly main business revenue fell 13.97% to 3.486 billion yuan, yet net profit attributable to shareholders surged 98.93% to 308 million yuan. Adjusted net profit rose 64.76% to 105 million yuan.
Wolong Electric’s core activities include R&D, production, sales, and services related to motors and control systems. Its main business covers explosion-proof electric drive systems, industrial electric drive systems, HVAC electric drive systems, new energy transportation electric drive systems, and robotics components. By revenue, HVAC electric drive solutions contributed approximately 4.958 billion yuan, accounting for about 30% of total revenue. Explosion-proof and industrial electric drive solutions contributed roughly 4.633 billion yuan and 4.095 billion yuan, respectively. These three segments formed the company’s core business, representing around 90% of total revenue.
In terms of growth, the explosion-proof and industrial electric drive segments showed limited expansion, while the HVAC electric drive segment grew only 7.95%.
Since the "924" market rally, Wolong Electric’s stock price has surged more than threefold. This rise has been driven partly by its involvement in robotics—through a joint investment with Tencent in Zhiyuan Robotics, drawing market attention to its presence in embodied intelligence—and partly by its role as a key supplier of electric propulsion systems for aviation, benefiting from continued policy support for the low-altitude economy.
It is worth noting that Wolong Electric emphasized its new energy transportation electric drive systems (including low-altitude applications) and robotics electric drive systems both in its 2025 annual report and its Hong Kong listing prospectus. The company has strategically positioned bionic robots and electric aviation as new growth drivers. However, the actual contribution of these businesses remains modest.
In 2025, robotics components and system applications, along with new energy transportation electric drive solutions, generated revenues of approximately 500 million yuan and 400 million yuan, respectively. Combined, they accounted for only about 6% of total revenue. Moreover, the gross margin for new energy transportation electric drive solutions was just 6.06%, raising questions about the segment’s competitiveness.
Growth in Wolong Electric’s new energy transportation electric drive solutions reached 11.09%, lagging behind industry expansion. According to the China Passenger Car Association, global sales of new energy vehicles exceeded 22.89 million units in 2025, up 27% year-on-year, with global penetration nearing 25%. China remained the world’s largest market, with sales of 16.49 million units and a penetration rate of 47.9%.
The robotics components and system applications segment grew 14.13%, underperforming compared to the explosive growth seen in the humanoid robotics sector. IDC data show that global humanoid robot shipments approached 18,000 units in 2025, a year-on-year increase of about 508%, with sales totaling approximately $440 million. According to Frost & Sullivan, the global embodied intelligence cluster market grew from $12.5 billion in 2020 to $34.3 billion in 2024, a compound annual growth rate of 28.7%. The market is projected to reach $200.2 billion by 2030, with a CAGR of 34.2% from 2024 to 2030.
In fact, Wolong Electric has shown a recurring mismatch between revenue and net profit over multiple fiscal years. In contrast to 2025, the company reported revenue growth but sharp profit declines in 2022 and 2023. Revenue increased 4.15% and 9.12% in those years, while net profit attributable to shareholders fell 19.06% and 33.73%, respectively.
Notably, Wolong Electric divested its photovoltaic and energy storage businesses before applying for a Hong Kong listing. In early 2025, the company announced that its subsidiary Zhejiang Longneng Power Technology Co., Ltd. would delist from the New Third Board and abandon its planned listing on the Beijing Stock Exchange. Wolong Electric also agreed to transfer its 43.21% stake in Longneng Power, along with 80% of Zhejiang Wolong Energy Storage System Co., Ltd., 51% of Wolong Inade (Zhejiang) Hydrogen Energy Technology Co., Ltd., and 70% of Shaoxing Shangyu Shunfeng Electric Power Co., Ltd., to affiliate Wolong Real Estate (later renamed Wolong New Energy) for 720 million yuan. After the transaction, Wolong Electric no longer held controlling stakes in these four companies.
This intra-group transfer served three purposes. First, given overcapacity and intense price competition in the photovoltaic and energy storage sectors, non-leading companies face significant cash flow pressure from high R&D and capacity investment. Divesting these assets helped optimize Wolong Electric’s balance sheet. In 2025, the company’s non-recurring gains reached 303 million yuan, accounting for nearly 30% of net profit and nearly doubling from the previous year.
Second, the move helped Wolong Real Estate address delisting risks, while Longneng Power achieved an indirect listing. Wolong Electric had long sought to list its new energy platform Longneng Power, but the process faced repeated setbacks. As early as 2021, the company planned to list the photovoltaic power station operation business on the Shenzhen Main Board to create an independent new energy platform. In 2023, the spin-off plan was formally announced to enhance financing and competitiveness. However, in April 2024, Wolong Electric terminated the Shenzhen Main Board listing plan and instead pursued a listing on the Beijing Stock Exchange, which was also abandoned in 2025.
For Wolong Real Estate, which relied on a "property + mining" dual-core model, 2024 performance plummeted due to a downturn in the real estate sector and industry cycles, raising concerns about sustainable operations. The company’s 2024 annual report showed revenue of 3.611 billion yuan, down 24.08% year-on-year, and net profit attributable to shareholders of 41 million yuan, down 75.15%. Adjusted net profit fell 68.37% to 51.596 million yuan.
In March 2025, Wolong Real Estate acquired 44.90% of Longneng Power, 80% of Wolong Energy Storage, 51% of Wolong Hydrogen Energy, and 70% of Shunfeng Electric, integrating these four new energy companies into its consolidated statements as part of a strategic shift into photovoltaic, wind power, and hydrogen energy storage businesses. The company was subsequently renamed Wolong New Energy.
Meanwhile, Wolong Electric initiated a secondary listing in Hong Kong in June 2025. On June 19, 2025, the company announced its plan to issue H-shares and list on the Main Board of the Hong Kong Stock Exchange, aiming to deepen its global strategy and establish a dual financing platform with A-shares and H-shares. It submitted its listing application to the Hong Kong Exchange on August 13, 2025. The initial application lapsed after six months on February 13, but the company refiled an updated application just 14 days later on February 27.
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