Hong Kong Stock IPO Subscription: Wolong Electric Group Subscription Analysis
Wolong Electric is a globally leading manufacturer of electronic materials and communication cables, specializing in high-speed data communication and power transmission. The company's main products include high-speed copper cables, heat-shrinkable materials (such as heat-shrink tubes, dual-wall tubes, etc.), and power transmission products for new energy vehicles and power grids (such as charging guns, high-voltage cable accessories, etc.), widely used in computing centers, AI servers, new energy vehicles, rail transit, aerospace, and other fields.
Based on 2024 revenue, the company ranks third globally and first in China in the covered high-speed copper cable communication cable market, second in the global high-speed copper cable overall market, and first in both the global and Chinese heat-shrinkable materials markets. The company possesses strong R&D capabilities (holding 547 invention patents as of September 2025), manufacturing bases across China and Southeast Asia, and a diversified global customer network, with financial performance showing sustained and steady growth.
The net proceeds from this offering are HK$2.734 billion, with approximately 45% to be used for product diversification and upgrades to expand business scope, increase market share, and penetration; about 27% for expanding the global business footprint; about 18% for potential strategic investments and acquisitions; and about 10% for working capital and general corporate purposes.
IPO Information:
Global offering of 139.9888 million shares, board lot size of 200 shares, offer price of HK$20.09, minimum subscription fee of HK$4,058.53, issued under Mechanism B. As of writing, the margin financing multiple is 8.18x, with an estimated 60,000 to 100,000 applicants. The one-lot winning rate is around 10%, and applying for 150 lots secures one lot.
Financials: 2022 revenue 5.337 billion, 2023 revenue 5.719 billion, 2024 revenue 6.920 billion, with a CAGR of 13.90%; Q3 2025 revenue 6.077 billion, compared to 4.816 billion in the same period last year, a year-on-year increase of 26.20%;
2022 gross profit 1.612 billion, 2023 gross profit 1.789 billion, 2024 gross profit 2.110 billion, Q3 2025 gross profit 1.878 billion, compared to 1.495 billion in the same period last year, a year-on-year increase of 25.42%;
2022 net profit 660 million, 2023 net profit 758 million, 2024 net profit 921 million, Q3 2025 net profit 883 million, compared to 709 million in the same period last year, a year-on-year increase of 24.54%.
Wolong Electric's main revenue composition: 1. Electronic communication business, covering communication cable products and electronic material products, with combined revenue of 4.302 billion in 2024, accounting for 62.2%; 2. Power transmission product business, covering new energy vehicle power transmission products and cable accessory products, with combined revenue of 2.308 billion in 2024, accounting for 33.4%; 3. Other businesses, including wind power generation and others, with revenue of 310 million in 2024, accounting for 4.4%.
Industry-wise, based on 2024 revenue, the company ranks third among the top five global covered high-speed copper cable communication cable manufacturers, with a market share of 12.7%; concurrently, it ranks first among the top five Chinese covered high-speed copper cable communication cable manufacturers, with a market share of 18.8%; based on 2024 revenue, it ranks first among the top five global and Chinese heat-shrinkable material manufacturers, with market shares of 20.6% and 58.5%, respectively. It is an absolute leader in this industry. Looking at the capital side, this offering introduced 16 cornerstone investors, with subscription funds of $124 million, accounting for 34.45%, and a lock-up period of 6 months. The cornerstone lineup is decent, including well-known domestic and foreign investment institutions such as Hillhouse, Jinglin, Gaoshi, Wusong, etc. The sponsors are jointly led by China Securities and China Merchants Securities. Wolong Electric's theme is quite good, being an industry leader and repeatedly speculated on in the A-share market, with its stock price quintupling in the past two years. This stock is suitable for swing trading. I participated in ultra-short-term trading twice before, catching limit-up gains, but its stock character is just average for ultra-short-term play. This dual listing on A/H shares has an H/A premium rate of -34.58%, which can only be described as average. However, Wolong Electric also employed the tactic of not setting a greenshoe option for quick inclusion in the Stock Connect. In the past, Jihong's H/A premium rate ranged from -44% to -20.79%, currently at -29.57%; Guoen's H/A premium rate ranged from -43.63% to -30.36%, currently at -27.87%. Let's see the performance of A-shares next week. If it can maintain this premium without further decline, then participating in the subscription is fine.
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