HAIWEI ELEC (09609), which carries the title of China's second-largest capacitor film manufacturer, has encountered significant setbacks in the capital markets. The company successfully listed on the Hong Kong stock exchange on November 28, 2025, with an offer price of HK$14.28 per share. However, by April 24, its share price had fallen to HK$6.61. This represents a decline of over 50% from the IPO price within just five months, effectively halving the company's market capitalization.
The anchor investor, Huixing Lihai, which was a crucial supporter during the IPO, has suffered substantial losses. Amid this depressed share price environment, HAIWEI ELEC is approaching a new market challenge. It has been learned that the 15.129 million shares held by anchor investor Huixing Lihai will be released from their lock-up period on May 28. These shares constitute a significant portion, approximately 42.67%, of the total shares offered in the global offering. If Huixing Lihai chooses to sell its holdings after the lock-up expires, such a large sell-off could subject HAIWEI ELEC to a significant liquidity stress test, given the current relatively low market liquidity, potentially exerting further downward pressure on the share price.
The weak post-listing performance of HAIWEI ELEC contrasts sharply with the "hot" demand seen during its public offering. The company utilized a "Mechanism B" issuance model for its IPO. It originally planned to issue 30.8314 million shares, representing 19.95% of its total share capital, with 90% allocated to the international placement and 10% to the public offering. Furthermore, HAIWEI ELEC established an "over-allotment option," allowing for the issuance of up to an additional 4.6246 million shares at the offer price if market demand was strong, representing about 15% of the original offering size.
After the exercise of this option, the total number of shares offered increased to 35.456 million, representing about 22.28% of the company's total share capital, while the ratio between the international placement and public offering remained at 9:1. The purpose of this option is that, since the "Mechanism B" model does not allow adjustment of the public offering ratio, it can be exercised in cases of strong demand to increase the total issuance size directly, without a clawback, proportionally increasing shares in both the international and public offering tranches.
HAIWEI ELEC's public offering was oversubscribed by 5,426.27 times, leading to the exercise of the over-allotment option, bringing the total shares offered to 35.456 million. However, the international placement performance was less impressive compared to the heated public offering. The international placement was approximately 6.11 times oversubscribed. A key factor behind this figure is that 15.129 million shares within the international placement, representing about 47.41% of the tranche, were pre-allocated to the sole anchor investor, Huixing Lihai. Consequently, excluding the anchor investment portion, the actual subscription multiple for the remaining international placement shares would be significantly lower. This suggests that genuine demand from market-driven institutional investors may have been far weaker than the headline number indicated.
Notably, anchor investor Huixing Lihai has a particular background. It was incorporated in Hong Kong in August 2025, leading to market speculation that it might have been established specifically for HAIWEI ELEC's IPO. Huixing Lihai is wholly owned by a Shanghai-based partnership enterprise, whose funds primarily originate from a state-owned investment platform controlled by the Changxing County Finance Bureau. Therefore, this anchor investment carries a local state-owned background.
The managing entity of this Shanghai partnership is ultimately wholly owned by the Hong Kong company "Huizhi Group Holdings." Huizhi International Financial Holdings Limited was one of the underwriters for HAIWEI ELEC's IPO. This means that anchor investor Huixing Lihai and underwriter Huizhi International are under common ultimate control, constituting connected parties. Although such an arrangement involving a connected party as an anchor investor was approved by the Hong Kong Stock Exchange and complies with listing rules, this structure often attracts market scrutiny. Investors might infer that the issuer lacked confidence in market-driven subscription demand, relying instead on a connected party to provide a high proportion of anchor investment to support the listing.
HAIWEI ELEC's post-listing share price performance has confirmed market concerns. The stock fell below its issue price on its first trading day, closing down 22.97%, and continued a volatile downward trend thereafter. Although it experienced a brief rebound early this year, the share price resumed its decline after the rebound ended, continuing a pattern of gradual decreases. By April 24, the share price had fallen to HK$6.61, accumulating a decline of 53.71% from the IPO price.
While the anchor investor has seen its investment halved, Series B investors have faced even more severe losses. HAIWEI ELEC completed its Series A, Series A+, and Series B funding rounds consecutively within 2023. Notably, the valuation in the Series B round surged by nearly 130% compared to the Series A and A+ rounds, which were only a few months apart. Based on the closing price of HK$6.61 on April 24, all investors from the Series A round onwards are currently sitting on paper losses. Series A and Series A+ investors are facing paper losses of nearly 30%, while Series B investors are facing direct paper losses of approximately 70%.
HAIWEI ELEC's shareholder base is diverse, including top investment bank-affiliated capital like CICC Pucheng (a wholly-owned subsidiary of CICC), industrial investors such as Sungrow Power Supply and BYD, as well as multiple investment platforms with local government or state-owned backgrounds, including Yibin Green Energy, Hebei Zhanxin, Yichang Fund, Chutian Changxing, and Anhui Fund. However, all these shareholders are currently experiencing significant paper losses.
Even early-stage Series A investors are facing paper losses, reflecting a clear valuation bubble for HAIWEI ELEC in the primary market, which may be closely related to its initial plan for an A-share listing. It was observed that HAIWEI ELEC signed a辅导 agreement with its A-share listing sponsor, CICC, as early as March 2023, initiating the process for an A-share listing. However, as A-share IPO policies continued to tighten, the company ultimately pivoted to the Hong Kong market. This shift directly led to a valuation adjustment during the listing process, contributing to the "break-issue-price followed by deep decline" scenario.
For all shareholders currently facing deep paper losses, the core concern is whether they can recover their investment and potentially achieve profits. This ultimately depends on whether HAIWEI ELEC's fundamental performance can sustain improvement in the future and, through the release of long-term value, drive the share price back above the IPO level.
Founded in 2006, HAIWEI ELEC is a capacitor film manufacturer, primarily producing capacitor base film and metalized film, which are key components of film capacitors. According to Frost & Sullivan data, in 2024, based on sales volume of capacitor base film, HAIWEI ELEC ranked second in the Chinese capacitor film market with a 14.2% share.
In terms of financial performance, HAIWEI ELEC's fundamentals show a trend of marginal weakening. From 2022 to 2025, the company's operating revenue was RMB 327 million, RMB 330 million, RMB 422 million, and RMB 334 million, respectively. The previously consecutive growth trend was interrupted in 2025, turning to a year-on-year decrease of 20.79%. During the same period, net profit was RMB 102 million, RMB 69.826 million, RMB 86.418 million, and RMB 40.008 million, respectively, showing significant volatility, with a sharp year-on-year decline of 46.59% in 2025.
In detail, the revenue decline in 2025 was primarily due to market supply exceeding demand, leading to decreases in both sales volume and selling prices across the company's entire product range, thereby dragging down overall revenue. This, combined with a decline in gross profit margin, impairment losses, other losses, and a significant increase in administrative expenses, exacerbated the net profit decline.
HAIWEI ELEC's revenue decline also reflects that the capacitor base film industry is undergoing a significant capacity expansion cycle. According to statistics, as of August 2025, there were 20 producers in the domestic BOPP capacitor film industry, operating 63 production lines with a total capacity of approximately 163,000 tons. Just from January to August 2025, the industry added 7 new production lines, with 4 more lines planned for commissioning within the year. It is estimated that over 20 additional lines will be commissioned before 2027, pushing total industry capacity beyond 200,000 tons, indicating significant supply-side growth.
HAIWEI ELEC itself is also actively pursuing capacity expansion. According to its prospectus, the company plans to commission four new capacitor base film production lines between 2026 and 2027, adding a total capacity of 16,000 tons. Compared to the company's actual output of 11,904 tons in 2024, this implies a doubling of its capacity within the next two years, also indicating the strong overall industry expansion trend.
Undoubtedly, the competitive landscape of the capacitor film industry is undergoing significant differentiation due to rapid capacity release. On one hand, for film types with relatively mature technology and lower entry barriers, increased competition from new entrants and faster supply growth have significantly intensified market competition, continuously pressuring product prices and profit margins. On the other hand, for the most technologically advanced products, such as films with specifications of 1.5-2µm and below, and high-temperature resistant grades, due to extreme requirements for process, equipment, and technology, only a few leading companies possess stable mass-production capabilities. Consequently, supply remains tight, prices stay firm, and gross margins are significantly higher than those for mainstream products.
According to the prospectus, HAIWEI ELEC's product revenue structure in 2024 was characterized by a clear dominance of thicker films: mid-to-thick base film products (4-14.9µm) accounted for a high proportion of nearly 66% of revenue, while ultra-thin base film (2-3.9µm), which has higher technical barriers and greater value-added, accounted for only 6.4%. This structure indicates that HAIWEI ELEC's current revenue still heavily relies on mid-to-thick film products. Against the backdrop of concentrated industry capacity release and increasingly fierce competition, the price pressure on its mainstream products is likely to intensify, potentially putting further strain on overall profit margins.
During this capacity expansion cycle, a company's competitiveness and profitability will depend not on the scale of capacity itself, but on its ability to continuously break through advanced technological barriers like ultra-thinness and high-temperature resistance, and achieve stable mass production of high-end products. HAIWEI ELEC previously stated on its website that its self-developed ultra-thin capacitor film has a thickness of only 1.5µm, equivalent to one-fortieth the diameter of a human hair, and possesses high-temperature resistance characteristics, surpassing the sub-3µm film thickness of Germany's Treofan GmbH and reaching international advanced levels.
The technological breakthrough of the 1.5µm product demonstrates HAIWEI ELEC's R&D capabilities and long-term growth potential, providing crucial support for its transition towards high-end products. However, at the current stage, where the company's product structure is still dominated by mid-to-thick films and high-end ultra-thin products have not yet contributed significantly to revenue scale, it will continue to face substantial fundamental pressure in the fiercely competitive market. The key turning point for HAIWEI ELEC's share price reversal in an environment of overall industry capacity expansion and price pressure will hinge on its ability to rapidly scale up production of advanced products like the 1.5µm film and drive a significant optimization of its revenue structure.
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