Dajin Heavy Industry Co.,Ltd., a leading domestic supplier of offshore wind power foundation equipment, has officially launched its global offering for a Hong Kong stock listing, with trading expected to commence on June 5th. The company's impressive performance in the European market has driven significant profit growth, supported by recent large shipbuilding contracts and a strong lineup of cornerstone investors, attracting substantial market attention. However, concerns such as declining overseas gross margins, tepid cash flow growth, and a relatively small IPO discount compared to recent A-to-H listings introduce some uncertainty for this offering.
As the first wind power tower and pile manufacturer to list on the A-share market, Dajin Heavy Industry has nearly two decades of experience in the sector and is a key global player. According to Frost & Sullivan data, based on monopile sales value in the first half of 2025, the company ranked first in the European market for offshore wind foundation equipment, increasing its market share from 18.5% in 2024 to 29.1%. It is also the sole supplier in the Asia-Pacific region to have achieved batch deliveries of monopiles to Europe.
The successful execution of its overseas expansion strategy has propelled the company's financial performance to new heights. Financial data shows that in 2025, the company achieved operating revenue of 6.17 billion yuan, a substantial year-on-year increase of 63.3%. Net profit attributable to shareholders reached 1.10 billion yuan, surging 132.8% year-on-year, with both revenue and profit effectively doubling. In the first quarter of 2026, performance hit another record high, with quarterly revenue of 1.91 billion yuan (up 67.2% year-on-year) and net profit of 430 million yuan (up 88.2% year-on-year), maintaining high profitability.
Performance Volatility and Margin Pressure
However, the company's results exhibit noticeable volatility influenced by project delivery cycles. In the fourth quarter of 2025, performance declined sequentially, with revenue of 1.58 billion yuan and profit of 220 million yuan, down 10.0% and 36.6% respectively from the third quarter. Although first-quarter 2026 results rebounded, the risk of earnings fluctuations due to delivery cycles remains a factor to watch.
It is noteworthy that while markets outside mainland China have become the core engine for growth, the profitability of this segment has shown a declining trend. In 2025, the gross profit margin for this business fell to 33.9% from 38.5% in 2024. This was primarily due to intensified global competition in offshore wind power, raw material price fluctuations, currency exchange rate movements, and rising project delivery costs. Although its market share in the crucial European market rose to 29.1% in the first half of 2025, fierce industry competition has pressured its pricing power. Combined with cost pressures from global supply chain volatility, the margin decline in non-mainland business introduces some uncertainty for future profit growth.
Strong Order Book but Cash Flow Concerns
Furthermore, the company has secured substantial international orders, further solidifying its earnings base. According to the prospectus, it has signed shipbuilding contracts with clients in Norway, Greece, and the Netherlands to construct ten 211,000 DWT bulk carriers and two 25,000 DWT heavy-lift vessels, with a total contract value of approximately 6.17 billion yuan. The vessels are scheduled for delivery between 2028 and 2029, marking international recognition of its shipbuilding capabilities by leading shipowners.
Despite the strong growth in revenue and profit, the company's cash flow performance has been relatively subdued. For the full year 2025, net cash flow from operating activities was 1.23 billion yuan, an increase from 1.08 billion yuan in 2024, but the growth rate was significantly lower than that of revenue and profit, indicating a degree of "revenue growth without corresponding cash flow growth."
On a quarterly basis, there was a net operating cash outflow of 280 million yuan in Q4 2025, mainly due to increased inventory for orders on hand and concentrated settlement of payables at year-end. In Q1 2026, net operating cash inflow recovered to 440 million yuan. However, due to business expansion needs, capital expenditures for wind farm construction, shipbuilding, and production base expansion remained high, leading to a net cash outflow from investing activities of 930 million yuan. Coupled with a net cash outflow from financing activities of 680 million yuan, the total net cash outflow for the quarter reached 1.19 billion yuan.
Additionally, inventory and receivables management require ongoing attention. As of the end of 2025, inventory stood at 2.17 billion yuan. The inventory turnover days improved from 250 days in 2024 to 183 days but remain at an elevated level. The turnover days for trade receivables and notes significantly decreased from 161 days in 2024 to 83 days, showing marked improvement in collection efficiency. However, given the high concentration of clients among major European offshore wind developers, the pace of collections still carries some uncertainty.
Robust Cornerstone Support and Valuation Considerations
The cornerstone investor lineup for this IPO is notably strong, comprising 13 cornerstone investors (on a consolidated basis) with total subscription commitments of $360 million, covering 48.5% of the base offering size and providing solid market endorsement. GIC Private Limited leads as the largest single cornerstone investor with an $80 million commitment. Hillhouse Capital and Yuanfeng Capital followed with commitments of $50 million and $39.99 million respectively, forming the core tier. UBS Global Asset Management, Pinpoint Asset Management, and Taikang Life Insurance each committed $30 million, while Marshall Wace, Millennium Management, and ICBC Wealth Management each committed $20 million. Other participants include Eastspring Investments, China Post & Capital Wealth Management, and Fullgoal Fund, covering a full spectrum of institutional investors from sovereign wealth funds and foreign long-term asset managers to top domestic private equity firms, global hedge funds, insurance capital, and bank wealth management. In the current Hong Kong IPO market, where the diversity and brand strength of cornerstone investors are increasingly valued, this prestigious lineup provides a solid anchor for the offering and reflects strong institutional confidence in the company's long-term value.
Calculated at the upper limit of the offer price of HK$66.40 per share, the Hong Kong listing price represents a discount of only about 20.8% compared to the A-share closing price of 72.90 yuan (approximately HK$78.1) on the pricing date. This discount is significantly lower than the typical 30%-45% range seen for most A-to-H listings this year, potentially limiting the scope for secondary market investors to capture substantial arbitrage gains.
Valuation Outlook and Growth Drivers
In terms of valuation, the company's price-to-earnings (P/E) ratio for 2025 stands at 45.9x, placing it in the mid-to-high range compared to peers like Longyuan Power Group Corp., Ltd., Jiangsu Haili Wind Power Equipment Technology Co., Ltd., and TSP Wind Energy Co., Ltd.. Based on projected 2026 earnings, its forward P/E ratio is 27.8x. This logic of rapid valuation digestion from a high to a lower level essentially implies a market consensus on the certainty of the company's future high growth.
On one hand, the company's total order backlog exceeds 14.5 billion yuan, comprising 8.33 billion yuan in overseas wind power equipment orders and 6.17 billion yuan in new shipbuilding orders. This substantial backlog provides solid support for earnings growth over the next 2-3 years. On the other hand, with the increasing proportion of high-margin overseas wind projects and the strong revenue and profit growth momentum seen in Q1 2026, the market generally expects the company's net profit growth in 2026 to be significantly above the industry average. This dynamic earnings growth is anticipated to rapidly dilute the initially high static valuation, aligning it more closely with the wind power sector's typical valuation range of 25-30x P/E, thereby enhancing valuation rationality.
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