Intrinsic Value Jiangsu Haili Wind Power Equipment Technology Co., Ltd. (301155.SZ)

• Previous Close: $87.18
• Intrinsic Value: $23.01
• Upside potential: -74%

Stock Valuation Context

Business Model And Market Position

Jiangsu Haili Wind Power Equipment Technology operates as a specialized manufacturer in China's renewable energy infrastructure sector, focusing on the production of wind turbine towers and offshore wind turbine jacket platforms. The company serves the rapidly expanding wind power industry, providing critical structural components that form the foundation for both onshore and offshore wind farms. Its core revenue model is built on manufacturing and selling these large-scale steel structures to wind turbine OEMs and project developers, with business tied to China's substantial investments in clean energy infrastructure and the global transition toward renewable sources. Positioned within the industrial machinery segment, Haili leverages its technical expertise in heavy steel fabrication to meet the demanding specifications required for wind energy applications, particularly in challenging offshore environments where structural integrity is paramount. The company's market position benefits from China's dominant role in wind power installation growth, though it operates in a competitive landscape with several established players. Its specialization in jacket platforms for offshore projects represents a strategic focus on higher-value segments of the wind supply chain as the industry increasingly moves toward deep-water installations.

Revenue Profitability And Efficiency

For FY 2024, the company reported revenue of CNY 1.35 billion with net income of CNY 66.1 million, reflecting a net margin of approximately 4.9%. Operating cash flow was positive at CNY 80.7 million, though significant capital expenditures of CNY 789.9 million indicate substantial investment in production capacity. The disparity between operating cash flow and capital spending suggests an aggressive expansion phase or capacity buildup, which is characteristic of companies positioning for growth in capital-intensive industrial sectors.

Earnings Power And Capital Efficiency

The company generated diluted EPS of CNY 0.30, demonstrating modest earnings power relative to its market capitalization. The substantial capital expenditure program, which significantly exceeded operating cash flow, indicates heavy investment in fixed assets that may enhance future production capabilities. This investment pattern suggests the company is prioritizing capacity expansion over immediate capital returns, which is typical for industrial manufacturers in growth phases within emerging renewable energy markets.

Balance Sheet And Financial Health

Haili maintains a solid liquidity position with cash and equivalents of CNY 922.8 million against total debt of CNY 1.10 billion, indicating manageable leverage. The healthy cash balance provides operational flexibility and buffers against the cyclical nature of wind power equipment demand. The balance sheet structure appears appropriate for an industrial manufacturer undergoing capacity expansion, with sufficient liquidity to support ongoing operations while managing debt obligations.

Growth Trends And Dividend Policy

The company maintained a dividend payment of CNY 0.09 per share, reflecting a commitment to shareholder returns despite its growth investments. The significant capital expenditure program suggests management is betting on future demand growth in China's wind power sector. The balance between dividend distributions and reinvestment indicates a strategy focused on sustainable growth while acknowledging shareholder expectations for returns.

Valuation And Market Expectations

With a market capitalization of approximately CNY 14.45 billion, the company trades at a significant premium to its current earnings, suggesting market expectations for substantial future growth. The low beta of 0.259 indicates lower volatility relative to the broader market, possibly reflecting investor perception of stable long-term demand fundamentals in renewable energy infrastructure. The valuation appears to incorporate expectations for successful execution of the company's expansion strategy.

Strategic Advantages And Outlook

Haili's strategic position within China's renewable energy supply chain provides exposure to national policy support for wind power development. Its specialization in offshore wind jacket platforms represents a focus on higher technical barriers and potentially higher-margin products. The outlook is tied to China's continued investment in offshore wind capacity and the company's ability to effectively utilize its expanded production capabilities to capture market share in this growing segment.

Sources

Company financial statementsShenzhen Stock Exchange disclosures