| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 30.11 | 0 |
| Intrinsic value (DCF) | 14.46 | -52 |
| Graham-Dodd Method | 4.50 | -85 |
| Graham Formula | n/a |
Zhejiang HangKe Technology Incorporated Company (688006.SS) is a leading Chinese manufacturer specializing in lithium battery test equipment with a remarkable history dating back to 1948. Headquartered in Hangzhou, this industrial equipment company operates in the critical Electrical Equipment & Parts sector, providing essential testing solutions for the rapidly expanding lithium battery industry. HangKe's comprehensive product portfolio includes consumption-type Li-battery formation test equipment, power Li-battery formation and test systems, high-end traction battery post-processing solutions, and column-type Li-battery test equipment. As China dominates global battery production, HangKe occupies a strategic position in the supply chain, serving battery manufacturers with sophisticated testing technology that ensures product quality, safety, and performance. The company's expertise in research and development, manufacturing, and marketing positions it as a key enabler of the electric vehicle revolution and energy storage transformation. With the global shift toward electrification and renewable energy, HangKe's specialized equipment plays a vital role in supporting the quality control and efficiency demands of battery producers worldwide, making it an integral component of the clean technology ecosystem.
HangKe Technology presents a specialized play on the booming lithium battery supply chain with a market capitalization of approximately CN¥23 billion. The company demonstrates solid financial performance with CN¥2.98 billion in revenue and CN¥326 million net income, translating to a diluted EPS of CN¥0.54. While the company maintains a strong cash position of CN¥3.07 billion against CN¥900 million in debt, investors should note the relatively modest operating cash flow of CN¥169 million and negative capital expenditures. The dividend yield appears reasonable at CN¥0.226 per share. The primary investment thesis revolves around HangKe's positioning within the rapidly growing battery equipment market, though competition is intensifying as global players expand their presence. The beta of 0.713 suggests lower volatility than the broader market, which may appeal to risk-conscious investors seeking exposure to China's industrial technology sector. Key risks include technological disruption, customer concentration, and potential margin pressure from increasing competition.
HangKe Technology operates in a highly specialized niche within the battery manufacturing equipment sector, where technical expertise and reliability are critical competitive factors. The company's competitive advantage stems from its deep domain knowledge accumulated since 1948 and its positioning within China's dominant battery production ecosystem. As a domestic supplier, HangKe benefits from proximity to the world's largest battery manufacturers, enabling responsive service, customization capabilities, and cost advantages over international competitors. The company's comprehensive product range covering formation, testing, and post-processing equipment provides customers with integrated solutions rather than piecemeal offerings. However, HangKe faces intensifying competition from both domestic Chinese equipment makers and established international players with broader technological portfolios. The company's relatively modest R&D spending compared to global leaders could challenge its ability to keep pace with next-generation battery technologies. While HangKe's strong cash position provides financial stability, its competitive positioning depends heavily on maintaining technological relevance as battery chemistries and manufacturing processes evolve. The company's success will hinge on its ability to deepen relationships with leading battery producers while continuously advancing its equipment capabilities to match industry requirements for higher precision, automation, and data integration.