New Stock Preview | "Ning Wang" supports the waist and cannot stop the decline in performance. How can Wuxi Lead Intelligent Equipment (300450.SZ) with fading growth still lead?

Wuxi Lead Intelligent Equipment, the world's largest provider of intelligent equipment and solutions for new energy, seems to be preparing to list on the A+H markets. Recently, Wuxi Lead Intelligent Equipment officially submitted its listing application to the Hong Kong Stock Exchange. As a witness to the rise of the industry with Shanxi Guoxin Energy Corporation, after more than twenty years of development, Wuxi Lead Intelligent Equipment has grown into a world-class leader in lithium battery equipment and has formed a platform-based company with diversified business development. However, outstanding "status" cannot guarantee long-term performance. According to the performance forecast for 2024 disclosed by Wuxi Lead Intelligent Equipment last month, the company's net profit attributable to shareholders last year was only about 2.1-3.1 billion yuan, with a year-on-year decrease of 82.53%-88.17% in the same caliber; and non-net profit was only about 3-4 billion yuan, with a year-on-year decrease of approximately 76.8%-82.6%. Wuxi Lead Intelligent Equipment attributed the significant negative growth in performance to a slowdown in downstream market demand and asset impairment losses. The performance was affected by internal and external factors, but this does not seem to have slowed down Wuxi Lead Intelligent Equipment's plans to list on the Hong Kong Stock Exchange. Moreover, it is worth mentioning that Wuxi Lead Intelligent Equipment is not the first A-share lithium battery company to target listing in Hong Kong. For example, earlier this month, Contemporary Amperex Technology (300750.SZ) had already submitted its application to the Hong Kong Stock Exchange. Top players in the lithium battery industry chain are rushing to list in Hong Kong for a second time. What is the intention behind this? For Wuxi Lead Intelligent Equipment, the company's peak performance seems to be a thing of the past. Even if the company achieves its dream of listing on the Hong Kong Stock Exchange this year, what will it bring to investors in the Hong Kong stock market? Peak performance a thing of the past? Wuxi Lead Intelligent Equipment was founded in 2002 and officially entered the lithium battery equipment business in 2008. After years of development, Wuxi Lead Intelligent Equipment has established an absolute leading market position in the field of new energy. According to data from Frost & Sullivan, based on the value of orders in 2024, Wuxi Lead Intelligent Equipment is the world's largest provider of intelligent equipment and solutions for new energy, occupying 9.1% of the global market share; during the same period, Wuxi Lead Intelligent Equipment had a global market share of 22.4% and 23.8% in intelligent lithium battery equipment and lithium battery intelligent logistics equipment, respectively. In the process of expanding and strengthening Wuxi Lead Intelligent Equipment, "Ning Wang" played a vital role. Going back to 2020, Wuxi Lead Intelligent Equipment signed a "Strategic Cooperation Agreement" with Contemporary Amperex Technology in September of that year; almost at the same time, Wuxi Lead Intelligent Equipment also released a plan for private placement, intending to introduce Strategic investors Contemporary Amperex Technology, who would hold 7.29% of the company after the issue was completed. As of the end of the third quarter of 2024, Contemporary Amperex Technology still holds 7.14% of Wuxi Lead Intelligent Equipment's shares and remains the second-largest shareholder. The reason why Contemporary Amperex Technology has bet heavily on Wuxi Lead Intelligent Equipment may be related to the frequent business exchanges between the two parties earlier. According to publicly available information, Wuxi Lead Intelligent Equipment has been providing high-end lithium battery equipment to Contemporary Amperex Technology since 2013, effectively supporting the rapid growth of Contemporary Amperex Technology's lithium battery shipments. From 2022 to the end of September 2024, the proportion of order income from Contemporary Amperex Technology to Wuxi Lead Intelligent Equipment's total income was 40.1%, 15.4%, and 8.9%, respectively, although the proportion continued to decline, Contemporary Amperex Technology still consistently ranks among the top five customers of Wuxi Lead Intelligent Equipment. Just as the proportion of income from Contemporary Amperex Technology has been declining year by year, Wuxi Lead Intelligent Equipment also seems to have gradually weaned off its "reliance on major customers."From 2022 to September 2024, the revenue from the top five customers of Wuxi Lead Intelligent Equipment accounted for 73.8%, 57%, and 50.2% respectively. However, it is regrettable that the company's performance has not been able to continuously improve. During the same period, Wuxi Lead Intelligent Equipment's revenue was 13.836 billion yuan, 16.483 billion yuan, and 9.038 billion yuan, with net profits of 2.318 billion yuan, 1.771 billion yuan, and 587 million yuan respectively. In September 2024, the company's revenue and net profit decreased by 30.8% and 74.5% respectively compared to the same period last year. Comparing the data from previous years, the highest revenue point for Wuxi Lead Intelligent Equipment was in 2023, while the highest profit point was in 2022.When looking at the business structure breakdown, the revenue of Wuxi Lead Intelligent Equipment consists of lithium battery intelligent equipment, photovoltaic intelligent equipment, 3C intelligent equipment, intelligent logistics systems, and other businesses. During the reporting period, lithium battery intelligent equipment has always been the company's largest business, with revenue accounting for fluctuating between 69.5% and 78.4%. The intelligent logistics system is the company's second largest business segment, contributing approximately 16.6% of revenue by September 2024. During the same period, the revenue from the remaining business segments of Wuxi Lead Intelligent Equipment each accounted for less than 10%. It is worth noting that in recent years, the proportion of revenue from overseas sources for Wuxi Lead Intelligent Equipment has continued to rise. From 2022 to September 2024, the company's overseas revenue was 11.95 billion yuan, 22.42 billion yuan, and 22 billion yuan, accounting for 8.6%, 13.6%, and 24.3% respectively, achieving a "double jump." However, in comparison, by September 2024, Wuxi Lead Intelligent Equipment's revenue from the domestic market was only 6.839 billion yuan, showing a significant decline from the 11.505 billion yuan recorded in the same period last year, indicating possible lack of follow-up strength. The trough of the cycle has passed, will overseas contributions increase? From a global industry perspective, GMTEight believes that Wuxi Lead Intelligent Equipment's performance has experienced a downturn in the past two years, which can be considered expected. Taking the lithium battery intelligent equipment industry as an example, in 2023 and 2024, the entire industry market shrank due to changes in end-market demand and a slowdown in the construction of new projects by downstream electric vehicle battery and energy storage battery companies. Data shows that by order value, the global lithium battery intelligent equipment market size was 119.8 billion yuan in 2022, but by 2024, this number had dropped to 59.3 billion yuan, a significant decrease. In China alone, the domestic lithium battery intelligent equipment market size decreased from 72.2 billion yuan in 2022 to 20.2 billion yuan in 2024, a decline greater than the global market. However, with Contemporary Amperex Technology, BYD Company Limited, and other leading lithium battery companies announcing plans to resume production expansion in the second half of 2024, downstream demand is beginning to recover, driving the revival of the lithium battery intelligent equipment market. According to forecasts, the compound annual growth rate of the global lithium battery intelligent equipment market is expected to rise to 31.8% from 2024 to 2029. The curse of the cycle is expected to be broken. Another highlight of Wuxi Lead Intelligent Equipment is its focus on going global. According to the company, in 2025, Wuxi Lead Intelligent Equipment will further deepen its global strategy and expand into overseas markets. According to the prospectus, Wuxi Lead Intelligent Equipment plans to first develop key overseas market regions to establish a global capability of "global sales, global delivery, global service." In pursuit of this goal, the company will expand its business networks in Europe, the Asia-Pacific, and North America regions. At the same time, Wuxi Lead Intelligent Equipment will closely follow the global layout plans of key customers and expand its share of overseas orders. It is worth mentioning that at the end of last year, Wuxi Lead Intelligent Equipment once again signed a "Strategic Cooperation Agreement" with Contemporary Amperex Technology. Compared to previous agreements, the latest document further expands the scope of equipment procurement, and the two parties will actively expand cooperation in areas such as "module PACK." It can be speculated that although the proportion of Wuxi Lead Intelligent Equipment's revenue from Contemporary Amperex Technology has been decreasing in recent years, the strong willingness of both parties to cooperate continues. Ultimately, the capital market is a place where real strength is tested. Regardless of deep ties with industry giants, whether the cycle reverses or the story of going global sounds appealing, the decisive factor that ultimately affects the stock price is still the company's fundamentals and growth potential. For Wuxi Lead Intelligent Equipment, it seems that the "highlights" of the company's performance have faded away, and after undergoing pressure testing, the company may now need to prove itself to the market more than ever before. Being listed on the Hong Kong Stock Exchange is a rare opportunity for Wuxi Lead Intelligent Equipment, eager to expand its business and raise ammunition for development. Whether the company can meet growth expectations again will probably only be answered by time.