Eaglerise Electric & Electronic (China) Co., Ltd. (002922.SZ) submitted an application for an H-share listing at the end of January, with Guotai Junan Financing Limited appointed as the sole sponsor.
The company's core products focus on transformer equipment, which can be applied in downstream sectors such as new energy, data centers, and power distribution. These products are described as the "power hub" for AI computing centers.
In terms of performance, there are both positive and challenging aspects. Revenue has shown consistent growth, increasing from 2.8 billion yuan in 2022 to nearly 4 billion yuan in the first three quarters of 2025, reflecting strong industry demand. However, profitability has faced pressure, with gross margins declining from 22.34% in 2023 to 20.35% in 2024 and further to 18.49% in the first three quarters of 2025. This led to a situation where revenue grew by 17.32% year-over-year in the first three quarters of 2025, but net profit decreased by 15.14% compared to the same period last year.
Notably, the net profit margin fell below 5% by the end of the third quarter, raising questions about the company's value-added competitiveness.
Shortly after the IPO application was filed, on February 4, multiple senior executives announced plans to collectively reduce their shareholdings. Those involved include General Manager Zhao Nannan, Board Secretary Liang Lunshang, Financial Director Chen Lijun, and Vice Presidents Liu Jingyuan and Huang Huijie. The five key executives plan to sell over 1.47 million shares in total, which would amount to approximately 60 million yuan based on the share price at that time.
While the company aims to attract investors through its Hong Kong listing, the decision by internal key figures to sell their shares in advance creates a notable contrast that may not be viewed favorably.
Despite Eaglerise's relatively stable performance, it has fallen short of securities firms' expectations. For instance, analyst Zhang Han from Huaxin Securities initially predicted in a March 2025 report that the company's revenue would reach 5.793 billion yuan in 2025 and 7.204 billion yuan in 2026, with net profits attributable to shareholders of 375 million yuan and 486 million yuan, respectively.
However, the release of the third-quarter results, which showed a 15.14% year-over-year decline in net profit—amounting to only about half of the previously forecasted net profit for 2025—made Zhang's earlier predictions appear unrealistic. Consequently, in December, Zhang issued a revised report, slightly raising the revenue forecasts to 5.795 billion yuan for 2025 and 7.209 billion yuan for 2026, but significantly lowering the net profit estimates to 272 million yuan for 2025 and 434 million yuan for 2026.
A comparison reveals that while Huaxin Securities' revenue projections for Eaglerise remained relatively stable, the unexpected decline in gross margins and profitability led to a downward revision of approximately one-quarter in the 2025 net profit target and a reduction of over 50 million yuan in the 2026 net profit forecast.
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