On September 10, 2021, Xinte Electric’s IPO application was approved by the municipal Party Committee on the gem. On February 22, 2022, the CSRC agreed to Xinte Electric’s IPO registration application. If no major events occur, Xinte Electric will successfully land in the A-share market.
deep cultivation of high-end differentiated track
Public information shows that Xinte Electric is a leading manufacturer of domestic brand frequency conversion transformers. Its main business is the R & D, production and sales of various special transformers and reactors with frequency conversion transformers as the core and the sales of supporting products. The GEM Listing fund-raising, the company plans to issue no more than 61.92 million shares, and plans to raise 516 million yuan to invest in the company’s special transformer production base and R & D center construction projects and supplement working capital.
Market analysts pointed out that the successful IPO of Xinte Electric has benefited from the company’s fine cultivation of professional segments, so it has established a more prominent competitive advantage in the industry.
It is understood that China’s Transformer Market for frequency conversion can be subdivided into general high-voltage frequency converter supporting market and high-performance high-voltage frequency converter supporting market. The supporting market of high-performance high-voltage frequency converter is mainly occupied by foreign manufacturers such as Siemens and abb, and the supporting market of general high-voltage frequency converter is mainly occupied by domestic brand manufacturers.
Xinte Electric is currently a major participant in China’s general high-voltage inverter supporting market. According to the statistics of China Electrical Appliance Industry Association, in 2020, Xinte electric achieved a revenue of 341 million yuan, with a market share of more than 25%. In the market share ranking of domestic brand frequency conversion transformer manufacturers, Xinte Electric has surpassed its current main competitor Hainan Jinpan Smart Technology Co.Ltd(688676) (A-share listed company) and enterprises such as Shanghai North substation and CLP electric, becoming one of the leading companies in subdivided industries.
Xinte Electric said that the company is one of the earliest manufacturers of frequency conversion transformers supporting high-voltage frequency converters in China. As early as 1997, Xinte electric began to customize and produce a small number of frequency conversion transformers according to the requirements of major international brand users such as Siemens and abb. As early as 2004, the company successfully developed high insulation grade (H-grade) frequency conversion transformer, breaking the monopoly of similar foreign products.
As a pioneer in the frequency conversion transformer industry, since its establishment, Xinte Electric has been committed to the R & D, production and market-oriented application of frequency conversion transformers. With more than 20 years of experience, the company has strong technical leading advantages in the automation and efficiency of frequency conversion transformer design, refinement and intelligence of product manufacturing, and the technical advantages have been transformed into the performance, quality and Cost and other comprehensive advantages.
According to the company’s development strategy, during the reporting period, Xinte electric closely understood the needs of customers, followed the development trend of the industry, and continued to provide customers with high-quality products and services. Now it has leading technical advantages, deep technical reserves, efficient design ability, leading production technology, strict quality control system, excellent product performance, high-quality and responsive technical support and after-sales service, The product performance and quality have been recognized by our customers and established a good market reputation.
As of January 2022, Xinte Electric has 68 patents (including 28 Chinese invention patents, 3 foreign invention patents and 37 Chinese utility model patents), and the number of patents in subdivided industries is in the top camp of Companies in the same industry. At the same time, the company also has a number of non patented core technologies, covering the whole product design, structure and manufacturing process, including new heat dissipation technology, impedance balance technology, intelligent design and production related technology, core related manufacturing technology, coil manufacturing technology and new structure and design technology.
Since 2008, the company has been a high-tech enterprise in China’s manufacturing industry, and has participated in the drafting of China’s frequency conversion transformer industry standards and the revision of a number of national standards related to products. While its rapid development, the company has actively promoted the progress of the industry and led the technological innovation of the industry.
The advantages of core technological achievements have become an important basis for the company to have the ability of high-capacity product design and manufacturing. As of January 2022, the maximum product capacity delivered by Xinte Electric is 48850kva, which is higher than that of its main competitors.
profitability is better than the average level of the industry
Deep ploughing frequency conversion transformer subdivision track, Xinte Electric has won the long-term favor of many international and Chinese brands with its core technology and other advantages.
During the reporting period, international well-known frequency converter manufacturers including Schneider, abb, Siemens, Fuji Electric, Hitachi and Rockwell, as well as Wolong Electric Group Co.Ltd(600580) , Shenzhen Invt Electric Co.Ltd(002334) , Windsun Science Technology Co.Ltd(688663) , Shenzhen Inovance Technology Co.Ltd(300124) and other large frequency converter manufacturers in China have long become stable customers of Xinte electric gas, ensuring the rapid growth of the company’s performance.
According to the prospectus, during the reporting period from 2018 to the first half of 2021, the revenue of Xinte electric in each period reached 247 million yuan, 271 million yuan, 341 million yuan and 163 million yuan respectively, and the net profit in each period was 568741 million yuan, 679947 million yuan, 829943 million yuan and 312063 million yuan respectively. From 2018 to 2020, the company’s annual compound growth rate of revenue was 17.52%, and the compound growth rate of net profit was 20.80%, which was better than the average performance growth rate of Listed Companies in the same industry.
As a highly customized special transformer product for precision frequency transformer, Xinte Electric’s product design and production process are at a high level, which has established high industrial technical barriers, greatly improved the technical added value of the product and ensured the high gross profit of the company’s business. Over the years, based on the comprehensive advantages of independent innovation, product performance, customers and brands, Xinte Electric has also led the segment market of frequency conversion transformers for a long time. During the reporting period, the gross profit margin of the company’s main business reached 39.51%, 43.74%, 41.22% and 34.96% respectively, which was better than the average level of 23.11%, 21.87%, 20.45% and 20.73% of comparable companies in the industry.
Thanks to the substantial growth of revenue and profit, Xinte Electric has insisted on returning to the shareholders of the company for many years. Since 2014, the company has paid large dividends for many times. According to statistics, from 2014 to 2020, Xinte electric successively carried out five large dividends, with a cumulative dividend amount of up to 214 million yuan. In particular, in May 2016, Xinte electric was successfully listed on the new third board. Since its listing, it has accumulated nearly 200 million yuan, becoming a rare high-quality performance stock in the new third board market.
At present, Xinte Electric is only the last step away from landing in the A-share market. According to the performance growth trend predicted by the company, after the successful issuance and listing, Xinte Electric is expected to become a high-quality high dividend company in the A-share market again.
Xinte electric believes that frequency conversion equipment is a national key high-tech product and one of the key areas supported by the national “863” plan. With its excellent speed regulation performance, perfect protection function, remarkable energy-saving effect and easy interface with automatic control system to realize automatic regulation, frequency conversion speed regulation technology has become an effective way for enterprise technical transformation and equipment energy conservation and consumption reduction in the field of industry and manufacturing. The company’s core product frequency conversion transformer is an important component of the frequency converter. It provides multiple functions such as voltage conversion, isolation and phase shift for the frequency converter. It forms a frequency conversion electrical system together with other power electronic unit components of the frequency converter. It has a good application prospect in improving the process and improving the control accuracy.
At present, the frequency conversion electrical system has been widely used in the fields of power, metallurgy, petrochemical, building materials, municipal and mechanical supporting industries and infrastructure construction. With the implementation of the national energy conservation and consumption reduction policy, the improvement of industrial automation control and the expansion of the application industry market, the frequency conversion transformer will have a wider growth space. Therefore, in this fund-raising, Xinte electric plans to significantly expand its existing production capacity and realize the steady improvement of the company’s performance again.
