Why is the leading company with a market value of 175.1 billion rushing to Hong Kong to "raise funds"?

Star Island Reporter Qi Xin reports from Shanghai

It is no longer unusual for A-share companies to choose to expand into the Hong Kong stock market. According to the Hong Kong Stock Exchange official website, Shenzhen-listed company Siyuan Electric (002028.SZ) has submitted its application to the HKEX on February 11, with CITIC Securities as the sole sponsor.

Siyuan Electric is a global manufacturer of power transmission and distribution equipment and a provider of comprehensive energy solutions. The company focuses on the research, design, manufacturing, and sales of transmission and distribution equipment and their core components, as well as offering related engineering contracting and full lifecycle services. According to Frost & Sullivan, based on revenue in China’s transmission and distribution and control equipment market in 2024, the company ranks eighth among international firms, fifth among domestic companies, and third among private domestic enterprises, with a market share of 3.5%.

However, a review of the prospectus reveals that this domestic private enterprise, ranked third in transmission and distribution equipment, also faces certain challenges. Whether it can successfully list on the Hong Kong stock market will be a test for Siyuan Electric.

Performance growth and expanding overseas revenue

Founded in December 1993, Siyuan Electric is one of the few companies in the industry capable of integrated R&D and manufacturing of primary and secondary power system equipment and energy storage devices.

The company has built a supply chain covering six core business lines: switchgear, transformers, protection and automation, power electronics, energy storage systems and components, and EPC. It has formed a business ecosystem of “products + solutions + services” and a rich product matrix, widely applied in power grids, new energy (solar and wind), metallurgy, petrochemicals, transportation, data centers, and other diverse industry scenarios.

▲ Siyuan Electric Prospectus Screenshot

In terms of performance, the company has seen continuous growth in recent years. In 2023 and 2024, revenue reached 12.46 billion yuan and 15.458 billion yuan, respectively, with net profits of 1.609 billion yuan and 2.085 billion yuan. In the first three quarters of 2025, revenue hit 13.827 billion yuan, a year-on-year increase of 32.86%; net profit was 2.271 billion yuan, up 49.46% year-on-year.

On the business side, switchgear contributed the majority of revenue, accounting for 46.8%, 44.7%, and 41.5% of total revenue in the first three quarters of 2023-2025, respectively. Additionally, transformer business revenue is also growing rapidly, representing 18.1%, 21.7%, and 23.8% of total revenue during the same periods.

▲ Siyuan Electric Prospectus Screenshot

Meanwhile, overseas revenue continues to expand, reaching 2.158 billion yuan, 3.122 billion yuan, and 4.189 billion yuan in the first three quarters of 2023-2025, accounting for 17.3%, 20.2%, and 30.3% of total revenue, respectively. “Benefiting from accelerated global grid investments and shortages of overseas power equipment supply, our overseas orders are maintaining rapid growth and have become one of the core drivers of our performance growth,” Siyuan Electric stated.

Accounts receivable challenges

It is important to note that Siyuan Electric faces high customer concentration risks. According to the prospectus, the company’s main clients include large national grid companies, five major power generation groups and their subsidiaries, regional power companies, as well as clients in rail transit, oil, and industrial sectors. In the first three quarters of 2023-2025, revenue from the top five customers accounted for 51.3%, 50.1%, and 42.4% of total revenue, respectively, with the largest customer contributing 33.9%, 31.6%, and 28.6%.

“We typically establish framework agreements or long-term supply arrangements with major clients. The long-term nature of these relationships helps us generate stable revenue and cash flow. However, because our revenue and trade receivables and notes are relatively concentrated, the financial health and procurement policies of major clients can significantly impact our financial condition and operating performance,” Siyuan Electric explained.

The company’s prospectus highlights the increasing trade receivable turnover days, which reached 126, 129, and 138 days in the first three quarters of 2023-2025. At the same time, the expanding trade receivables and notes are also notable, growing from 5.321 billion yuan in 2023 to 8.085 billion yuan in the first three quarters of 2025, and further increasing to 8.97 billion yuan at the end of January this year.

However, Siyuan Electric states that as of January 31, 2026, 47.9% (3.724 billion yuan) of the trade receivables as of September 30, 2025, have been subsequently settled.

▲ Siyuan Electric Prospectus Screenshot

Additionally, the amount of endorsed but unpaid notes that have not been fully recognized increased from 387 million yuan at the end of 2024 to 514 million yuan at the end of the third quarter of 2025, mainly due to sales growth. As of the end of January this year, only 37.8% (1.095 billion yuan) of the contractual liabilities had been recognized as revenue.

Founded in December 1993 as Shanghai Siyuan Electric Co., Ltd., the company was restructured into a joint-stock company in 2000 and listed on the Shenzhen Main Board in August 2004. As of the close on February 25, 2026, its market capitalization reached 175.103 billion yuan, making it a “five-year ten-bagger.”

For this Hong Kong listing attempt, Siyuan Electric plans to use the raised funds to expand production capacity, enhance manufacturing capabilities, strengthen R&D and testing, build a global service network, develop markets, improve brand influence worldwide, advance digital and intelligent transformation, and pursue global strategic investments, acquisitions, and operational funding.

Editor | Yang Zhou

First Draft | Zhong Kai

Final Review | Su Nan