Sieyuan Electric Co.,Ltd., a leading private domestic power transmission and distribution equipment manufacturer, has officially submitted an application for an H-share listing on the Hong Kong Stock Exchange in mid-February.
Since 2025, driven by traditional grid upgrades and demand for AI infrastructure, the power industry has entered a period of rapid growth. As a key private enterprise in the power equipment sector, Sieyuan Electric's stock price has surged approximately 200% since 2025, with its market capitalization exceeding 160 billion yuan.
This stock surge is accompanied by consistently growing performance and ample cash reserves. The question arises as to why Sieyuan Electric, which is not short of funds, is initiating a Hong Kong IPO at this juncture.
Behind the high growth lies the company's alignment with favorable market trends, although its energy storage and supercapacitor businesses are still in the development phase.
Prior to submitting the Hong Kong listing application, Sieyuan Electric disclosed its full-year 2025 results. The company reported revenue of 21.205 billion yuan, a year-on-year increase of 37.18%, and a net profit attributable to shareholders of 3.163 billion yuan, up 54.35% year-on-year. Estimates indicate that the net profit growth in the fourth quarter reached 74%. Furthermore, the company's actual revenue of 21.2 billion yuan exceeded its annual target of 18.5 billion yuan.
Operating data from recent years shows that the overseas market has been a significant engine for Sieyuan Electric's performance growth.
From 2023 to the first three quarters of 2025, Sieyuan Electric's revenue from overseas markets was 2.158 billion yuan, 3.123 billion yuan, and 4.189 billion yuan, respectively, accounting for 17.3%, 20.2%, and 30.3% of total revenue.
Currently, the global upgrade of aging power grids and the energy transition are creating synergistic effects. Regions with developed power systems, such as Europe and North America, have extensive, aging transmission and distribution equipment requiring significant upgrades. Meanwhile, areas like Southeast Asia, the Middle East, and Africa have underdeveloped power infrastructure, creating demand for new construction. Sieyuan Electric's competitive advantage in overseas markets continues to grow, leveraging its product cost-effectiveness, delivery speed, and comprehensive product portfolio.
Notably, overseas operations boast higher gross margins. In 2024, the gross margin for overseas business was 37.06%, exceeding the domestic margin. Part of the funds raised from the Hong Kong IPO are intended for global strategic investments and service network expansion, aiming to further increase the company's overseas market share.
Concurrently, in the domestic market, the company is steadily expanding its product categories and increasing its share in the grid market. Statistics show that the total value of State Grid's power transmission and transformation equipment tenders in the first three batches of 2025 reached 54.064 billion yuan, a year-on-year increase of 24.8%. Sieyuan Electric's total winning bid value across these batches was 3.925 billion yuan, representing a 79.9% year-on-year growth.
It is important to note that the rapid growth of global renewable energy installations and the explosion in AI computing demand are continuously expanding the market potential in energy storage and AIDC sectors, opening new avenues for power equipment companies.
Regarding its energy storage business, in 2024, Sieyuan Electric invested a total of 1 billion yuan to establish a new energy storage and power electronics project. Market-wise, station-level and large-scale commercial and industrial energy storage products are primarily targeted at the domestic market, while residential solar-storage products are focused on overseas markets.
In the AI power business, power supply and distribution systems are core to AIDC. As intelligent computing centers evolve towards gigawatt-scale, ultra-high efficiency, and high density, power systems are transitioning from AC 400V uninterruptible power supplies and DC 240V to high-voltage direct current. The importance of backup battery units and lithium-ion supercapacitors is increasing accordingly.
Sieyuan Electric has entered the supercapacitor market through its subsidiary Xianjing Carbon Energy. Supercapacitors have broad application potential in automotive electronics, new power systems, AI, and data centers. According to public information, supercapacitor applications in data centers entered the pilot phase in 2025 and are expected to see规模化推广 in 2026.
However, the current gross margin of the energy storage business is lower than that of other products, and the supercapacitor business remains in the pilot phase. Whether these new ventures can achieve significant success requires further validation over time.
The critical question is whether the massive capital investment will ultimately translate into tangible performance.
Judging by its cash reserves, Sieyuan Electric is not short of funds. As of the end of the third quarter of 2025, the company held 3.564 billion yuan in cash and cash equivalents and 2.79 billion yuan in financial assets at fair value through profit or loss, totaling 6.354 billion yuan. Total short-term and long-term interest-bearing debt amounted to 365 million yuan, indicating manageable repayment pressure.
However, its notes payable and accounts payable reached 7.361 billion yuan, while accounts receivable and notes receivable stood at 8.083 billion yuan. The overall asset-liability ratio has been climbing steadily and currently sits at approximately 46%.
Sieyuan Electric's performance growth is highly dependent on capital expenditure. From 2023 to the first three quarters of 2025, the company's cumulative capital expenditure reached 2.3 billion yuan, primarily directed towards energy storage capacity, expansion of high-end equipment production lines, and technological research and development. This continuous heavy asset investment has been a key driver of the company's performance.
Typically, the power equipment industry is characterized by long project cycles and complex acceptance procedures. Both grid projects and energy storage businesses require advance funding for raw material procurement and production organization. Sieyuan Electric's primary downstream clients are large state-owned enterprises like State Grid and China Southern Power Grid, which possess strong bargaining power, while its upstream suppliers are mostly component manufacturers.
Under this operational model, significant accounts payable and receivable have accumulated, and inventory levels have also risen substantially. By the end of the third quarter of 2025, Sieyuan Electric's inventory reached 5.027 billion yuan, a 44.58% increase from the beginning of the year. Impairment losses have correspondingly increased, with asset impairment losses amounting to 152 million yuan and credit impairment losses reaching 122 million yuan in 2024.
Moreover, as business scale and inventory levels grow, Sieyuan Electric's cash flow has come under pressure. In the first three quarters of 2025, cash flow from operating activities plummeted by 45% to 432 million yuan.
This cash flow pressure may be a significant reason behind the company's push for a Hong Kong IPO. According to the announcement, the proceeds from the offering will be entirely allocated to capacity building, core technology R&D, overseas market expansion, digital transformation, and supplementing working capital.
However, it is noteworthy that Sieyuan Electric faces intense competition in both domestic and international markets. Its energy storage and AIDC businesses are still in their early stages and do not yet contribute significantly to revenue. Whether the large-scale capital investment can ultimately translate into actual production capacity and orders, and whether the new businesses can be successfully implemented, requires ongoing observation.
On another front, as the proportion of overseas revenue increases, risks related to the security of overseas investments, geopolitical factors, and exchange rate fluctuations also warrant attention.
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