Communication power supplies are a critical infrastructure element of the entire communication network, yet they represent a relatively small proportion of the overall communication industry. Telecom operators primarily procure power supplies for annual equipment maintenance and system equipment, with maintenance typically accounting for a larger share of their purchases. Telecom operators spend relatively little annually on power system construction; they only increase their power supply procurement volume when the telecommunications system requires large-scale upgrades or expansions.
The communication power supply system is the heart of a communication system. A stable and reliable power supply system is crucial for ensuring the safe and reliable operation of the communication system. If a power supply system failure causes a power outage to the communication equipment, the equipment will be unable to operate, leading to communication circuit interruptions and system paralysis, resulting in significant economic and social losses. Therefore, the communication power supply system occupies a vital position in the communication system. For communication power supplies, buyers are not limited to telecom operators, but also include the vast market of telecom equipment manufacturers. Power is indispensable for both telecom service providers and manufacturers engaged in equipment research and development, processing, and assembly. China is a world-renowned manufacturing base, which objectively creates a strong market support for power supply products, undoubtedly helping the communication power supply industry weather market downturns. Mobile phone batteries are an important component of communication power supplies, and with the mobile phone market booming in recent years, communication power supplies companies may be able to gain further success in the mobile phone battery sector if they can adjust their strategies accordingly.
If the power supply system fails to output the specified current, the voltage exceeds the allowable fluctuation range, or the noise voltage exceeds the allowable value for more than 10 seconds, it is considered a system fault. In the original AC system, voltage, frequency, or waveform distortion exceeding the specified range for more than 60 seconds is also considered a fault. Therefore, to ensure the reliability of the communication power supply system, communication departments with the resources should, as far as possible, introduce two mains power inputs from two different locations and install two automatic mains power switching devices. The equipment used should be high-reliability high-frequency switching rectifiers, employing modular, hot-swappable structures for easy replacement, and reasonably configured with backup equipment. No new technology or equipment should be introduced into the power supply system before sufficient verification and trial operation. The power supply method should vigorously promote distributed power supply, using two or more independent power supply systems for communication equipment using the same DC voltage. This is also a new requirement for the continuous expansion of communication network capacity and scale, and the introduction of various new industries. To minimize the mean time between failures (MTBF) of equipment, operating parameters should be analyzed frequently to predict the timing of faults and eliminate them promptly. Furthermore, technical maintenance levels should be improved, employing centralized maintenance, remote signaling, and telemetry maintenance.
Centralized monitoring and management is an inevitable trend in network technology development, a requirement of modern communication networks, and an effective measure for enterprises to reduce manpower and increase efficiency. All power supply equipment must be intelligent, standardized, and compliant with open communication protocols. During implementation, the setup of remote monitoring points (remote control, remote telemetry, and remote remote sensing) must be reasonable; more is not necessarily better. Reliability and practicality should be the basic principles, and simplicity should be prioritized. In this regard, our station has achieved unattended operation of the power supply system by automatically sending paging messages to maintenance personnel when a power system failure occurs, through its remote signaling, telemetry, and centralized remote maintenance functions.
Power supply technology is a fundamental technology supporting the operation of various electronic devices, and its development level directly affects the speed and quality of development of the entire electronics and information industry. With the rapid development of next-generation communication technologies, new energy vehicles, and industrial automation, the demand for power supply technology is also increasing. Innovation and application of power supply technology will bring higher efficiency, lower costs, and better user experience to these fields.
Against this market environment and backdrop, Shenzhen Heda Zhongyuantong Power Technology Co., Ltd. (hereinafter referred to as "Zhongyuantong") launched its IPO on the Shenzhen Stock Exchange's ChiNext board on November 15. Following this IPO, Zhongyuantong will continue to invest in the research and development and innovation of power technology, providing customers with power products featuring high efficiency, high power density, high reliability, low noise, and low electromagnetic interference to meet the power needs of various fields.
Diversified business provides performance assurance
As a technology innovation-driven enterprise focusing on the research, development, production and sales of communication power supplies, new energy power supplies and industrial control power supplies, Zhongyuantong has a diversified business layout and provides customized power supply product solutions for customers in the fields of communication, new energy vehicles and industrial automation control.
Communication power supplies are a core business of Zhongyuantong, primarily encompassing products such as communication base station power supplies, communication equipment room power supplies, and communication-related power supplies. These products are widely used in mobile communications, enterprise private networks, railway communications, and satellite communications. Zhongyuantong is a leading enterprise in the domestic communication power supply field, possessing internationally leading power supply technology and having formed a relatively complete core technology system. It is committed to providing high-efficiency, high-power-density, and simplified power supply architectures and solutions. Zhongyuantong's communication power supply products are highly recognized by major domestic and international communication equipment manufacturers, and it has established long-term and stable cooperative relationships with internationally renowned companies such as Huawei, ZTE, Ericsson, and Nokia. With the rapid development of next-generation communication technology base station construction and the increasing demand for enterprise private network construction, Zhongyuantong's communication power supply business will usher in greater market space and development opportunities.
New energy power supply is a key development area for Zhongyuantong, primarily encompassing products such as new energy vehicle power supplies, energy storage power supplies, and photovoltaic power supplies. These products are widely used in new energy vehicles, energy storage systems, and photovoltaic power generation. Zhongyuantong is a leading enterprise in China's new energy power supply field, possessing a rich product line and solutions, providing efficient, safe, and intelligent power products for charging, battery swapping, and energy storage in new energy vehicles. Zhongyuantong's new energy power supply products are highly recognized by well-known domestic new energy vehicle integrators and OEMs, and the company has established strong long-term partnerships with leading domestic companies such as Inovance Technology, Invt, Blue Ocean Technology, Geely, and BYD. With the recovery of the new energy vehicle market and policy support, Zhongyuantong's new energy power supply business is poised for a strong rebound and growth.
Customer advantages and R&D innovation go hand in hand
As a technology innovation-driven enterprise, COSCO has significant customer advantages and R&D innovation capabilities in the market, which provides strong support for COSCO's performance growth and market competitiveness.
COSCO Shipping's clients cover multiple fields, including communications, new energy vehicles, and industrial automation control, and include many well-known large enterprises both domestically and internationally. According to the prospectus, during the reporting period (2020-June 2023), the company's top five customers accounted for RMB 547.5386 million, RMB 1,033.4921 million, RMB 1,065.9542 million, and RMB 490.1537 million, respectively, representing 55.62%, 72.32%, 74.07%, and 76.45% of the company's total revenue for the respective periods.
Zhongyuantong has established solid cooperative relationships with numerous well-known domestic and international companies. In the field of communication power supplies, Zhongyuantong's clients include Huawei, ZTE, Ericsson, and Nokia; in the field of new energy power supplies, clients include Inovance Technology, Invt, Blue Ocean Power, Geely, and BYD; and in the field of industrial control power supplies, clients include Weidmuller, ABB, and Siemens. These clients are all leaders or key players in their respective fields, and they have extremely high requirements for the quality, performance, and stability of power supply products. Zhongyuantong's ability to maintain long-term cooperation with them fully demonstrates its product advantages and service level.
The power supply industry in which the company operates is a technology-intensive industry, requiring continuous technological innovation and product upgrades to adapt to market changes and customer needs. The company highly values research and development, continuously increasing its R&D investment, and has formed a relatively complete core technology system, providing strong technical support for the company's product development and market expansion.
According to the prospectus, the company's R&D expenses were RMB 77.9243 million, RMB 84.6365 million, RMB 102.1331 million, and RMB 48.7043 million during the reporting period, respectively, accounting for 7.92%, 5.92%, 7.10%, and 7.60% of the operating revenue for the corresponding periods. As of June 30, 2023, the company had 424 R&D personnel, accounting for 25.47% of the total number of employees, which reflects the company's emphasis on R&D and innovation.
In terms of technological innovation, the company has mastered the latest generation of power supply technology and formed a relatively complete core technology system. It is committed to providing high-efficiency, high-power-density, and simplified power supply architectures and solutions. The design focuses on circuit topology normalization and software platformization. Through research on software algorithms and significant investment in digital design, the company streamlines hardware circuits, achieving high power supply reliability while reducing costs, improving efficiency, and minimizing size. As of June 30, 2023, the company and its wholly-owned subsidiaries held 26 invention patents (one of which also obtained a PCT international invention patent), 64 utility model patents, 5 design patents, and 123 computer software copyrights. The company has outstanding technological R&D and innovation capabilities. It is a nationally recognized high-tech enterprise, has been recognized as a Guangdong Provincial Engineering Technology Research Center for New Energy Vehicle DC-DC Converters and Charging Systems and a Shenzhen Municipal Research and Development Center (Technology Center), and received the honors of Guangdong Provincial Excellent Independent Brand in 2014 and one of the Top 100 Independent Innovation SMEs in Shenzhen in the 5th session.
In terms of product innovation, the company is customer-demand oriented, providing customized power supply solutions based on application scenarios in different fields. The company's main products include communication power supplies, new energy power supplies, and industrial control power supplies. These serve as key modules and core components in communication system equipment and servers, new energy vehicles and charging infrastructure, and industrial automation control equipment, converting electrical energy and providing stable power supply according to their specific needs. They are essential components of these devices. The company's products are characterized by high efficiency, high reliability, high power density, low noise, and low electromagnetic interference, meeting diverse customer needs and earning their trust and recognition.
Seize industry opportunities to enhance market competitiveness
As a leading power supply supplier in China, COSCO's three key product lines—communication power supplies, new energy power supplies, and industrial control power supplies—are continuously expanding their market share thanks to their superior technology and wide range of applications.
With the commercialization and promotion of next-generation communication technologies, the construction and upgrading of communication base stations will increase significantly, leading to a corresponding increase in demand for communication power supplies. According to the Ministry of Industry and Information Technology's report on the economic operation of the communications industry in the first eight months of this year, as of the end of August, the total number of next-generation communication base stations reached 3.138 million, accounting for 27.5% of the total number of mobile base stations. This percentage indicates significant room for future growth. Zhongyuantong, a leading domestic supplier of communication power supplies, has established solid partnerships with well-known domestic and international communication equipment manufacturers such as H3C, Huawei, ZTE, Ericsson, and Nokia. With a rich product line and solutions, it can meet the high efficiency, high power density, and high reliability requirements of next-generation communication power supplies, and is expected to occupy a significant share of the next-generation communication power supply market.
Similarly, with strong government support for new energy vehicles and increased consumer acceptance, sales and ownership of new energy vehicles are experiencing rapid growth. The development of new energy vehicles has also spurred the construction of charging infrastructure, providing the company with a broader market.
The company raised 230 million yuan in this offering, of which 130 million yuan will be used for the upgrading and renovation of its R&D center, 32.48 million yuan for the enterprise information technology integration and transformation project, and 68.1 million yuan for the production technology transformation project of its manufacturing center. The R&D center's main research areas are: next-generation communication power supplies, new energy power supplies, laser power supplies, battery energy storage systems, and special power supplies. These research areas will help the company better seize industry opportunities. With both leading technological development and effective capacity expansion, COSCO's fundraising plan aligns with national strategic directions and industrial policies, and is also a scientifically sound decision made by the company itself. Related analysis suggests that the market demand for the projects and products funded by the fundraising is rapidly growing and has broad prospects. The company is expected to further enhance its technological strength and product competitiveness, seize industry opportunities, and create greater room for performance growth.
